SCM - Service Process

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McGraw-Hill/Irwin Copyright 2011 The McGraw-Hill Companies, AllCopyright 2011 The McGraw-Hill Companies, All

Chapter 7

Service Processes


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Learning Objectives

1. Understand the characteristics of

service processes and know how they

differ from manufacturing processes.

2. Construct a service blueprint.

3. emonstrate how services are

classified.

!. "#plain the involvement of the

customer in services.


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The Nature of Services

$he customer is the focal point of all

decisions and actions

$he organi%ation e#ists to serve the

customer

&perations is responsible for service

systems

'lso responsible for managing the work

of the service workforce

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The Service Triangle

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Service Package

1. Supporting facility) $he physical resources that must be in place

before a service can be offered

2. *acilitating goods) $he material purchased by the buyer or the items

provided to the customer

3. +nformation) ata provided by the customer

!. "#plicit services) ,enefits that are observable by the senses

-. +mplicit services) Psychological benefits the customer may sense

only vaguely

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An Operational Classification ofServices

Customer contact the physical

presence of the customer in the system

) Extent of contact the percentage of time

the customer must be in the systemrelative to service time

) Services with a high degree of customer

contact are more difficult to control

Creation of the service the work

process involved in providing the

service itself

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ajor !ifferences bet"een #igh an$Lo"%Contact S&stems in a 'ank

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!esigning Service Organi(ations

Cannot inventory services) /ust meet demand as it arises

Service capacity is a dominant issue) 0hat capacity should + aim for

/arketing can ad4ust demand

Cannot separate the operations

management function from marketing inservices

aiting lines can also help with capacity

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#o" Service !esign is !ifferentfrom Pro$uct !esign

1. $he process and the product must bedeveloped simultaneously

) $he process is the product

2. ' service operation lacks the legal protectioncommonly available to products

3. $he service package constitutes the ma4oroutput of the development process

!. /any parts of the service package aredefined by the training individuals receive

-. /any service organi%ations can change theirservice offerings virtually overnight

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Structuring the Service Encounter)Service%S&stem !esign atrix

Service encounters can be configured in anumber of different ways

1. /ail contact

2. +nternet and on5site technology

3. Phone contact

!. *ace5to5face tight specs

-. *ace5to5face loose specs

6. *ace5to5face total customi%ation

Production efficiency decreases with morecustomer contact

(ow contact allows the system to work moreefficiently

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Service%S&stem !esign atrix

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Characteristics *elative to the !egree ofCustomer+Service Contact

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Strategic ,ses of the atrix

1. "nabling systematic integration of

operations and marketing strategy

2. Clarifying e#actly which combination

of service delivery the firm is providing

3. Permitting comparison of how other

firms deliver specific services

!. +ndicating life cycle changes as thefirm grows

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-irtual Service) The Ne" *ole ofthe Customer

Customers no longer 4ust interact with the

business

Pure virtual customer contact customers

interact in an open environment) e,ay

) Second(ife

ixe$ virtual an$ actual customer contact

customers interact with one another in aserver5moderated environment

) 7ou$ube

) ikipedia

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Service 'lueprinting an$ .ail%Safing

$he standard tool for service process

design is the flowchart

) /ay be called a service blueprint

' uni8ue feature is the distinction

between high customer contact aspects

of the service and those activities the

customer does not see) /ade by a 0line of visibility

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Example) 'lueprint of a T&picalAutomobile Service Operations

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Service .ail%Safing Poka%/okes 0AProactive Approach1

Poka5yokes procedures that block amistake from becoming a service defect

) Common in factories

/any applications in services) arning methods) Physical or visual contact methods

) $hree $9s

1. $ask to be done

2. $reatment accorded to the customer3. $angible features of the service

/ust often fail5safe actions of the customeras well as the service workers

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Three Contrasting Service !esigns

1. $he production line approach:/conald9s;

) Service delivery is treated much like

manufacturing2. $he self5service approach :'$/

machines;) Customer takes a greater role in the

production of the service

3. $he personal attention approach:


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Seven Characteristics of a 2ell%!esigne$ Service S&stem

1. "ach element of the service system isconsistent with the operating focus of the firm

2. +t is user5friendly

3. +t is robust

!. +t is structured so that consistent performanceby its people and systems is easilymaintained

-. +t provides effective links between the back

office and the front office6. +t manages evidence of service 8uality so that

customers see the value of service provided

>. +t is cost5effective

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anaging Customer%3ntro$uce$-ariabilit&

=ow should services accommodate the

variation introduced by the customer

Standard approach is to treat this as a

tradeoff between cost and 8uality

) /ore accommodation ? more cost

) (ess accommodation ? less satisfaction

Standard approach may overlook waysto accommodate customer

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.ive T&pes of -ariabilit&

1. 'rrival variability) Customers arrive at times when there are not

enough service providers

2.


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Strategies for anaging Customer%3ntro$uce$ -ariabilit&

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Appl&ing 'ehavioral Science toService Encounters

1. $he front5end and back5end of theencounter are not created e8ual

2. Segment the pleasure@ combine the

pain3. (et the customer control the process

!. Pay attention to norms and rituals

-. People are easier to blame thansystems

6. (et the punishment fit the crime inservice recovery

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Service 4uarantees as !esign!rivers

1. 'ny guarantee is better than noguarantee

2. +nvolve the customer as well as

employees in the design3. 'void comple#ity or legalistic

language

!. o not 8uibble or wriggle when acustomer invokes a guarantee

-. /ake it clear that you are happy forcustomers to invoke the guarantee

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SCM - Service Process