Production and Operations Management: Manufacturing and Services

1
Chapter 8
Service Processes
2
8-2
OBJECTIVES

• Service Strategy Focus Advantage
• Service-System Design Matrix
• Service Blueprinting
• Service Fail-safing
• Characteristics of a Well-Designed Service
  Delivery System

3
Service Businesses
8-3
A service business is the management of
organizations whose primary business requires
interaction with the customer to produce the
service

• Facilities-based services Where the customer
  must go to the service facility
• Field-based services Where the production and
  consumption of the service takes place in the
  customers environment

4
The Customer Centered View
8-4
A philosophical view that suggests the
organization exists to serve the customer, and
the systems and the employees exist to facilitate
the process of service.
5
Service-System Design Matrix
8-5
Exhibit 7.6
Degree of customer/server contact
Buffered
Permeable
Reactive
High
core (none)
system (some)
system (much)
Low
Face-to-face total customization
Face-to-face loose specs
Sales Opportunity
Production Efficiency
Face-to-face tight specs
Phone Contact
Internet on-site technology
Mail contact
High
Low
6
Characteristics of Workers, Operations, and
Innovations Relative to the Degree of
Customer/Service Contact
8-6
7
Example of Service Blueprinting
8-7
8
Service Fail-safingPoka-Yokes (A Proactive
Approach)
8-8

• Keeping a mistake from becoming a service defect
• How can we fail-safe the three Ts?

9
Three Contrasting Service Designs
8-9

• The production line approach (ex. McDonalds)
• The self-service approach (ex. automatic teller
  machines)
• The personal attention approach (ex. Ritz-Carlton
  Hotel Company)

10
Managing Customer Introduced Variation
8-10

• Arrival variability
• Request variability
• Capability variability
• Effort variability
• Subjective preference variability

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Accommodation Strategies
8-11

• Classic accommodation extra employees or
  additional employee skills
• Low cost accommodation use low cost labor,
  outsource, self-service
• Classic reduction more self-service,
  reservations, adjust expectations
• Uncompromised reduction develop procedures for
  good service, minimizing variation impact

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Characteristics of a Well-Designed Service System
8-12

• 1. Each element of the service system is
  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 its people and systems is easily
  maintained

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Characteristics of a Well-Designed Service System
(Continued)
8-13

• 5. It provides effective links between the back
  office and the front office so that nothing falls
  between the cracks
• 6. It manages the evidence of service quality in
  such a way that customers see the value of the
  service provided
• 7. It is cost-effective

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Applying Behavioral Science to Service Encounters
8-14

• The front-end and back-end of the encounter are
  not created equal
• Segment the pleasure, combine the pain
• Let the customer control the process
• Pay attention to norms and rituals
• People are easier to blame than systems
• Let the punishment fit the crime in service
  recovery

15
Service Guarantees as Design Drivers
8-15

• Recent research suggests
• Any guarantee is better than no guarantee
• Involve the customer as well as employees in the
  design
• Avoid complexity or legalistic language
• Do not quibble or wriggle when a customer invokes
  a guarantee
• Make it clear that you are happy for customers to
  invoke the guarantee

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Question Bowl
8-16

• Which of the following is an example of a
  Service Business?
• Law firm
• Hospital
• Bank
• Retail store
• All of the above

Answer e. All of the above
17
Question Bowl
8-17

• According to the Chase and Dasu (2001) study
  which of the following are behavioral concepts
  that should be applied to enhance customer
  perceptions of a service encounter?
• Flow of the service experience
• Flow of time
• Judging encounter performance
• All of the above
• None of the above

Answer d. All of the above
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Question Bowl
8-18

• Service strategy development begins by
  selecting which of the following as an operating
  focus or performance priority?
• Price
• Quality
• Variety
• Treatment
• All of the above

Answer e. All of the above
19
Question Bowl
8-19

• Which of the following best practices emphasized
  by service executives had the highest mean
  emphasize rating?
• Leadership
• Accessibility
• Quality values
• Customer orientation
• Listening to the customer

Answer b. Accessibility (Had the highest mean
rating at 4.02 on a 5 point scale.)
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Question Bowl
8-20

• Based on the Service-System Design Matrix,
  which of the following has a lower level of
  production efficiency?
• Face-to-face loose specs
• Phone contact
• Internet and on-site technology
• Face-to-face tight specs
• Mail contact

Answer a. Face-to-face loose specs
21
8-21
End of Chapter 8