New Service Development and Process Design

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New Service Development and Process Design
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Learning Objectives

• Discuss the new service development process.
• Describe the service design elements
• Prepare a blueprint for a service operation.
• Compare and contrast the generic approaches to
  service system design.
• Describe the customer value equation

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New Service Development Cycle
Full Launch
Development
Enablers

• Full-scale launch
• Post-launch review

• Formulation
• of new services
• objective / strategy
• Idea generation
• and screening
• Concept
• development and
• testing

People
Organizational Context
Teams

• Service design
• and testing
• Process and system
• design and testing
• Marketing program
• design and testing
• Personnel training
• Service testing and
• pilot run
• Test marketing

Product
Technology
Systems
Tools
Analysis
Design

• Business analysis
• Project authorization

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Service Design Elements

• Strategic service concept is a blue print that
  communicates to customers and employees alike
  what services they should expect to give and
  receive.
• It includes all elements in the service system
  that are engineered to achieve the strategic
  objectives

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Service Design Elements

• Structural Elements
• Delivery System
• Front Office, Back Office, Automation, Customer
  Participation
• Facility Design
• Size, Aesthetics, Layout
• Location
• Customer demographics, single and multiple
  sites, competition, site characteristics
• Capacity Planning
• Managing queues, number of servers,
  accommodating average demand or peak demand

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Service Design Elements

• Managerial Elements
• Service Encounter
• Service culture, motivation, selection and
  training, empowerment
• Quality
• Measurement, monitoring, methods, expectations
  vs. perceptions, service guarantee
• Managing Capacity and Demand
• Strategies for altering demand and controlling
  supply, queue management
• Information
• Competitive resources, data collection

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What is Service Blueprinting?

• A tool for simultaneously depicting the service
  process, the points of customer contact, and the
  evidence of service from the customers point of
  view.

Process
Service blueprinting
Points of Contact
Evidence
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Service Blueprint Components
CUSTOMER ACTIONS
line of interaction
ONSTAGE CONTACT EMPLOYEE ACTIONS
line of visibility
BACKSTAGE CONTACT EMPLOYEE ACTIONS
line of internal interaction
SUPPORT PROCESSES
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Service Blueprint Components
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Express Mail Delivery Service
Truck Packaging Forms Hand-held Computer Uniform
Truck Packaging Forms Hand-held Computer Uniform
PHYSICAL EVIDENCE
Customer Calls
Customer Gives Package
Receive Package
CUSTOMER
Driver Picks Up Pkg.
(On Stage)
Deliver Package
CONTACT PERSON
(Back Stage)
Customer Service Order
Airport Receives Loads
Fly to Sort Center
Load On Truck
Dispatch Driver
download Sort
Fly to Destination
SUPPORT PROCESS
Load on Airplane
Sort Packages
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Overnight Hotel Stay
Bill Desk Lobby Hotel Exterior Parking
Hotel Exterior Parking
Cart for Bags
Desk Registration Papers Lobby Key
Elevators Hallways Room
Cart for Bags
Room Amenities Bath
Menu
Delivery Tray Food Appearance
Food
PHYSICAL EVIDENCE
Arrive at Hotel
Give Bags to Bellperson
Call Room Service
Check out and Leave
Receive Bags
Sleep Shower
Go to Room
Receive Food
CUSTOMER
Eat
Check in
Greet and Take Bags
Deliver Bags
Deliver Food
Process Registration
Process Check Out
(On Stage)
CONTACT PERSON
Take Food Order
(Back Stage)
Take Bags to Room
Registration System
Registration System
Prepare Food
SUPPORT PROCESS
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Building a Service Blueprint
Step 4 Map contact employee actions, onstage and
back-stage.
Step 6 Add evidence of service at each customer
action step.
Step 3 Map the process from the customers point
of view.
Step 1 Identify the process to be blue-printed.
Step 2 Identify the customer or customer segment.
Step 5 Link customer and contact person
activities to needed support functions.
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Application of Service Blueprints

• New Service Development
• concept development
• market testing
• Supporting a Zero Defects Culture
• managing reliability
• identifying empowerment issues
• Service Recovery Strategies
• identifying service problems
• conducting root cause analysis
• modifying processes

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Generic approaches to service system design

• Production Line approach
• Customer as co-producer
• Customer contact approach
• Information empowerment

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Production-line Approach to Service Design

• Limit Discretion of Personnel
• Division of Labor
• Substitute Technology for People
• Standardize the Service

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Customer Participation

• Encourage Co-production by Customer Free air
  miles for Internet ticketing
• Promote Demand Smoothing Half-price drinks
  before 600pm

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Information Empowerment

• Employees Relational Databases
• Customers Internet Web Site

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Customer Contact View of Services

• Degree of Customer Contact Influences Potential
  Efficiency of Service
• Separate High- and Low-Contact Operations
• Consider Sales Opportunity and Production
  Efficiency Tradeoff

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WHAT IS VALUE?

Value Benefits received by the customer /
Sufferings that the customer has to endure
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What is external service value?
Results produced for the Customer
Process Quality

Value
Costs of Acquiring the services
Price to the Customer

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Thinking Assignments

• How are the elements in the service systems
  designed and managed to support the service
  concept of Shouldice hospital?
• How did Admart do in designing and managing the
  service design elements?

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Case Assignment

• adM_at_rt Company (due Jan. 31)
• Analyze adM_at_rt company using the strategic
  service vision framework. Please identify
  strength and weakness of AdM_at_art using the
  strategic service vision framework.
• What are the major reasons for the company to
  fail? What are some of the problems in the
  different elements of the strategic service
  vision that may have caused the company to fail?
• What do you recommend Jimmy Kai to do differently
  to avoid the failures?