SERVICE PROCESSES
1: Understand the characteristics of service processes.
2: Explain how service systems are organized.
3: Analyze simple service systems.
4: Contrast different service designs.
Chapter 7 and 9 of Chase, Shankar,
Jacobs
McGraw-Hill/Irwin 1
The Nature of Services
• The customer is the focal point of all decisions and
actions
• The organization exists to serve the customer
• Operations is responsible for service systems
• Operations is also responsible for managing the work of
the service workforce
2
The Service Triangle
3
Service Package
Supporting facility
• The physical resources that must be in place before a service can be offered
Facilitating goods
• The material purchased by the buyer or the items provided to the customer
Information
• Data provided by the customer
Explicit services
• Benefits that are observable by the senses
Implicit services
• Psychological benefits the customer may sense only vaguely
4
An Operational Classification of Services
• Customer contact: the physical presence of the
customer in the system
• Extent of contact: the percentage of time the customer must be in
the system relative 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
• The greater the percentage of contact time between the
service system and the customer, the greater the degree
of interaction between the two during the production
process
5
Major Differences between High- and Low-
Contact Systems in a Bank
9-6
6
Designing Service Organizations
• Cannot inventory services
• Must meet demand as it arises
• Service capacity is a dominant issue
• “What capacity should I aim for?”
• Marketing can adjust demand
• Cannot separate the operations management function
from marketing in services
• Waiting lines can also help with capacity
7
How Service Design Is Different from Product
Design?
1. The process and the product must be developed
simultaneously
• The process is the product
2. A service operation lacks the legal protection commonly
available to products
3. The service package constitutes the major output of the
development process
4. Many parts of the service package are defined by the
training individuals receive
5. Many service organizations can change their service
offerings virtually overnight
8
Structuring the Service Encounter: Service-
System Design Matrix
• Service encounters can be configured in a number of
different ways
1. Mail contact
2. Internet and on-site technology
3. Phone contact
4. Face-to-face tight specs
5. Face-to-face loose specs
6. Face-to-face total customization
• Production efficiency decreases with more customer
contact
• Low contact allows the system to work more efficiently
9
Service-System Design Matrix
10
Characteristics Relative to the Degree of
Customer/Service Contact
11
Strategic Uses of the Matrix
1. Enabling systematic integration of operations and
marketing strategy
2. Clarifying exactly which combination of service delivery
the firm is providing
3. Permitting comparison of how other firms deliver
specific services
4. Indicating life cycle changes as the firm grows
12
Five Types of Variability
Arrival variability
• Customers arriving at times when there are not enough service providers
Request variability
• Travelers requesting a room with a view
Capability variability
• A patient being unable to explain symptoms to doctor
Effort variability
• Shoppers not putting up carts
Subjective preference variability
• Interpreting service action differently
13
Applying Behavioral Science to Service
Encounters
1. The front-end and 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
14
Service Guarantees as Design Drivers
1. Any guarantee is better than no guarantee
2. Involve the customer as well as employees in the
design
3. Avoid complexity or legalistic language
4. Do not quibble or wriggle when a customer invokes a
guarantee
5. Make it clear that you are happy for customers to invoke
the guarantee
15
Service Blueprinting and Fail-Safing
• The standard tool for service process design is the
flowchart
• May be called a service blueprint
• A unique feature is the distinction between high customer
contact aspects of the service and those activities the
customer does not see
• Made by a “line of visibility”
16
Service Fail-Safing Poka-Yokes (A Proactive
Approach)
• Poka-yokes: procedures that block a mistake from
becoming a service defect
• Common in factories
• Many applications in services
• Warning methods
• Physical or visual contact methods
• Three T’s
1. Task to be done
2. Treatment accorded to the customer
3. Tangible features of the service
• Must often fail-safe actions of the customer as well as the
service workers
17
Three Contrasting Service Designs
The production line approach
• McDonald’s
• Service delivery is treated much like manufacturing
The self-service approach
• ATM machines
• Customer takes a greater role in the production of the
service
The personal attention approach
• Ritz-Carlton Hotel Company
18
Seven Characteristics of a Well-Designed Service
System
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
5. It provides effective links between the back office and
the front office
6. It manages evidence of service quality so that
customers see the value of service provided
7. It is cost-effective
19
Questions
20
Fail-Safing an Automotive Service Operation
21
