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Chapter 9 Operational Management

This document discusses key concepts in service design and delivery processes. It covers classifying services based on customer contact and involvement, front and back office activities, service blueprinting to map customer touchpoints, using poka-yoke mechanisms to prevent failures, contrasting service designs like production line vs self-service vs personal attention approaches, characteristics of well-designed service systems, managing customer variability, applying behavioral principles to service encounters, elements of effective service guarantees, and scheduling employees for service operations.

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345 views

Chapter 9 Operational Management

This document discusses key concepts in service design and delivery processes. It covers classifying services based on customer contact and involvement, front and back office activities, service blueprinting to map customer touchpoints, using poka-yoke mechanisms to prevent failures, contrasting service designs like production line vs self-service vs personal attention approaches, characteristics of well-designed service systems, managing customer variability, applying behavioral principles to service encounters, elements of effective service guarantees, and scheduling employees for service operations.

Uploaded by

Naruto
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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09/02/14 Chapter 9 Service processes

what should be the nature of service ? Service Strategy, employees,


support systems and customers. The customers are the focal
point.
Service Bundle/Package 5 features
1. Support facility- Such as the building/golf course
2. Facilitating goods- pens/ golf clubs / utensils / etc
3. Information- obtained from the customer, that enables efficient
and customized service.
4. Explicit Services- the primary service being provided 5. Implicit servicesExamples- Worry free auto repair
Privacy of a loan office / information status of a degree from a
prestigious university
Operational Classification Schemes for Services
Contact refers to the need of physical presence of the specific
customer during service delivery
Involvement is defined as the extent to which the customer is able to
influence the manner in which the service is delivered.
(1) High contact vs Low contact service (movies: high contact low
involvement)
(2) High involvement vs Low-Involvment Service (high involvement
by customers creates more costs).
(3) Facility-based vs. Field-Based Services facility means customer
has to go the facility to be serviced. Field based means the
service provide goes to the customer.
Activities of a Service-delivery process can be classified as:
Front office (or on stage) vs. Back office (or off stage) activities.
Front-Office Activities are those that are visible to the customer,
while back office activities are behind the scene activities not visible to
the customer. Restaurant industry front office is any service that is
visible to the customer. Back office are not visible to the customer.
Service Blueprinting
is a useful tool for conceptualizing and designing a sound delivery
process
Steps in service blueprinting
1. Establish boundaries for the process
2. Identify all steps involved in the process

3. Prepare a flowchart of the process- that also identifies the


steps where there is high customer contact.
4. Identify potential fail points
5. Estimate the time for each service activity
6. Analyze profitability
Poka-Yoke
is a very pointed/ specific mechanism that keeps something from
going wrong or significantly reduces the likelihood of something going
wrong.
Poka-yoke is a fail-safing or mistake proofing mechanism.
Three Contrasting Service Designs:
1. The production line approach
(pioneered by Mcdonalds)
Incorporates elements of
Rapid delivery/efficiency
Uniform output/standardization
High quality/standardization
Consistent quality
Fail-safing
2. The self service Approach
Examples: ATMs, e-tickets, gas stations, buffets, company
websites, etc.
3. The personal attention approach
(such as Nordstrom, Ritz-Carlton)
Exhibit 9.6: Ritz-Carltons Three steps of service
1. Warm Welcome
2. Anticipation and compliance
3. Fond Farewell
Seven Characteristics of a Well-desgined Service System
1. All elements of the service system are consistent with the
operating focus of the firm.
2. It is user friendly
3. It is robust
4. It is structured so that consistent performance by people and
systems is easily maintained.
5. It effectively links back office activities to the front office

6. It manages service quality and makes improvements known to


customers in such a way that customers can see the value of
the services provided.
7. It is cost effective

Service System Design Matrix:


Consider how:
Degree of customer contact affects
Process efficiency and
Sales opportunity
Managing customer introduced variability in a service delivery system
How much accommodation should a service process provide for
variability customers introduce into it?
Cost vs Quality trade-off
According to Frances frei (HBR, 2006) there are
5 basic types of customer introduced variabilities
1. Arrival variability
2. Request variability
3. Capability variability
4. Effort variability
5. subjective preference variability
Thus, service providers must examine alternative ways by which they
can manage customer introduced variability
Effective management of variability generally requires a company to
influence customer behavior
Exmaple: Netflix more effectively accommodates variation in the
customers behavior than did blockbuster
Applying behavioral science to the design and management of
service encounters
Six behaviorally based principles that can be tapped in better
designing and managing service encounters
1. The front end and the back end of the encounter are not created
equal
2. Segment the pleasure, combine the pain
3. Let the customer control the process
4. Pay attention to norms and rituals
5. People are easier to blame than systems
6. Let the punishment fit the crime in service recovery

For appropriate recovery, consider if it is a : Task (outcome) error or


Treatment (interpersonal process) error?
Service Guarantees as Design drivers
Elements of a good service guarantee
The guarantee should be
Unconditional
Meaningful to the customer (i.e it adequately compensates the
customer)
Easy to understand and communicate
Painless to invoke
(in some cases, even acted upon proactively by the provider)
Scheduling Employees in a Service Operation
Assume all employees are fulltime employees and the business is
open 7 days a week. Each employee is to work 5 days during any
7 day period, each employee is to have two consecutive days off.

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