Service_Operations [EDocFind.com]

8/7/2019 Service_Operations [EDocFind.com]

1/28

Service Operations


2/28

Services are EverywhereService Industries(communications, health care, transportation)

R&D

Design

Supporting

Services

(legal)

Manufacturing

Distribution

Repair

Government Support Services

(roads, education, public safety)

Interme-

diary

Private business

supporting services

Commer-

cial

Consu-mer


3/28

Products Are Bundles ofGoods and Services

100%

Goods

100%

Services% goods

% services

consultin

g

autos

hotels

groceries

retail


4/28

Product-Service Bundle

Core

Product

Repair

Service

Consulting

Service

Other

ServicesTraining


5/28

Key Differences BetweenServices & Goods

Tangibility Concurrent Production and Consumption

of Service Product Heterogeneity & Variability

Tasks Products

Perishability Role of the Customer Process = Product

Managements tasksdiffer greatly

between goodsproduction and

service production


6/28

Low

High

Low High

Degree of Interaction and Customization

Degree of

Labor

Intensity

Service Factory Service Shop

Mass Service Professional Service

Classification of Services


7/28

Perceptions of Service

Quality Quality of the Delivery Process versus

Quality of the Technical Outcome Elements of the process may cue technical

proficiency Dimensions of Service Quality

Reliability: Delivering on Promises Responsiveness: Being Willing to Help Assurance: Inspiring Trust and Confidence Empathy: Treating Customers as Individuals Tangibles: Representing the Service Physically


8/28

Gap Model of Service

QualityCustomer

Company

Customer Perceptions

Customer Expectations

Satisfaction Outcome Gap

Service Delivery Designs

Gap 2

Service Delivery

Gap 3

Communications

to Customers

Gap 4

Perceptions of Customer Expectations

Gap1

Source: Zeithaml & Bitner


9/28


Quality Gap 5: Customer Perceptions - Customer Expectations

Gap 1: Not Knowing What Customers Expect Company Perception of Customer Expectations - Actual

Gap 2: Not Selecting the Right Design Standards Service Design Standards - Company Perception of Customer Expectations

Gap 3: Not Delivering to Service Standards:The Operations Gap

Actual Service Performance - Standards

Gap 4: Not Matching Performance to Promises Actual Service Performance - Promised Performance


10/28


QualityCustomer

Company

Customer Perceptions

Customer Expectations

Gap 5

Service Delivery Designs

Gap 2

Service Delivery

Gap 3

Communications

to Customers

Gap 4

Perceptions of Customer Expectations

Gap1

Source: Zeithaml & Bitner


11/28

Gap 3: Translating the ServiceStandards into the Delivery

Operation Gap 3a: Operational Design

People: Employees, Managers, & Customers

Process: Role of Service Blueprinting

Equipment/Facilities, i.e., Tangibles Plus a

Whole Lot More

Gap 3b: Operational Control Ensuring the Quality of the Outcome,

Especially When Using Intermediaries

Enhancing the Operational Design Through

Feedback

l f l


12/28

Gap 3: Role ofEmployeesin Operational Design &

Delivery Staffing and Scheduling Shortcomings

Ineffective Recruitment

Role Ambiguity & Role Conflict Wrong Skills for Process - Equipment

Elements

Flaws in Evaluation & CompensationSystems

Lack of Empowerment & Teamwork

Hire - Retain - Develop - Support

11

G 3 l f C


13/28

Gap 3: Role ofCustomersin Operational Design &

Delivery Customers Not Performing Their Role in theProcess Lack of Understanding

Lack of Ability Lack of Willingness Ambiguity & UncertaintyAbout What They Want

No Reward for Good Performance Interaction with Other Customers Impact: Customers Introduce Variability to an

Operation Solution: Limit & Control Customer

Involvement Through Process Design &Technology

13

G 3 R l f P i


14/28

Gap 3: Role ofProcess inOperational Design &

Delivery Service Blueprinting: An Extended ProcessMap Design & Diagnostic Tool

Effectively Handling Demand Impact of Random Arrival Pattern Waiting Line (Queue) Configurations Waiting Line (Queue) Management

Matching Demand to Capacity Through

Demand Management Pricing: Yield Management Customer Communication Alternative Service Delivery Processes Complementary Products

14


15/28

Gap 3b: Maintaining

Operational Control Quality Control Procedures

Measure Outcomes

Measure Processes Controlling Quality through the Supply Chain

Intermediaries

Distributed Delivery Network

Enhancing the Operational Design ThroughFeedback Properly measuring customer perceptions


16/28

Service Encounter

Sequence Service Encounters = Transactions =

Tasks

Poor quality in one task can taint theperception of quality for the entiresequence

Initiation Diagnosis Service Verify

Service Transaction 2Service

Transaction

1

Service

Transaction

3

-- Service Encounter --


17/28

Service Blueprinting

Customer Actions

On-Stage Contact Employee Actions

Line of Interaction

Backstage Contact Employee Actions

Line of Visibility

Support Processes

Line of Internal Interaction


18/28

Service Encounter Triad

Company(Management)

CustomersEmployees

Efficiency vs.Autonomy

Efficiency vs.Satisfaction

Perceived Control

Adapted from Gronroos & Kotler


19/28

Costs of Queues

Level of Service

Low High

Expected

Cost

Cost ofprovidingservice

Cost ofWaiting

Optimal Solution

Total Cost


20/28


21/28

Reducing the CustomersPerceived Waiting Time

Unoccupied time feels longer than occupied time Provide magazines, a TV, or coffee in a waiting area DJs for music while on hold on telephone

Pre-process waits feel longer than in-process waits Have an initial reception take some data

Anxiety makes waits seem longer Tell customers how long the plane will be late

Uncertain waits feel longer than known finite waits Tell customers on a support hot line how long the wait will

be.


22/28

Reducing the CustomersPerceived Waiting Time

Unexplained waits feel longer than explainedwaits Tell customers that the flight crew is delayed

Unfair waits feel longer than equitable waits The last person to arrive gets helped first at the

newly opened checkout The more valuable the service, the longer a

customer is willing to wait Waiting to buy playoff tickets goes fast

Solo waits feel longer than group waits Misery loves company


23/28

Demand & CapacityImbalance

WastedCapacity

Tight Capacity

Demand

Capacity

time

Good

Balance


24/28

Managing Capacity

Schedule employees and equipmentintelligently.

Stretch the capacity: Squeeze more people in. Speed up service.

Schedule downtime during periods of lowdemand (repair, maintenance, vacations)

Employ part-timers, flex-timers, call-in

workers, seasonal workers. Rent/share extra facilities equipment. Cross-train employees


25/28

Managing Capacity

Long Term Fixed Capacity Facilities, Equipment.

Short Term VariableCapacity Workers.


26/28

Managing Demand

Product Variations over time Ski manufacturer vs. Ski Area

Modifying Timing and Location of Delivery

Have the facility open when there is demand for it(banks!). Use mobile units to bring the service to the

demand Pricing

For different market segments based on demand Danger of cannibalizing sales

Communication with Customers Peak times. Off-peak special offers.


27/28

Managing Demand

Pricing.

Advertising and Promotion.

Reservations.

Change the Nature of Demand.


28/28

Location of Capacity

Back-of-the-House Front-of-the-House

Fixed Capacity add equipment tables in a restaurantcooking equipment checkout station

data entry stations telephone lines

Variable Capacity cooks cashiers

typists bank tellersbaggage handlers waitstaff

Managing Capacity

Documents

Service_Operations [EDocFind.com]