Service_Management_lecture_note - 1Service Management It...

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1 Service Management It has often been remarked that services represent the fastest growing segment of the economy. This has been true for sometime in the United States and there is no sign of this trend letting up. Understanding of service systems is essentially to their good management. The Nature of Services There are seven generalizations we can make about services: 1. Everyone is an expert on services. 2. Services are idiosyncratic - what works well for one type of service many prove disastrous for another. 3. Quality of work is not quality of service. 4. Most services contain a mix of tangible and intangible attributes that constitute the service package . 5. High-contact services are experienced, whereas goods are consumed. 6. Effective management of services requires an understanding of marketing and personnel, as well as operations. 7. Services often take the form of cycles of encounters involving face-to-face, phone, electromechanical, and/or mail interactions. The Service-System Design Matrix A parallel to the Product-Process Matrix introduced earlier in the semester is the service-system design matrix. The top of the matrix shows the degree of customer/service contact, from the buffered core , which is physically separated from the customer, to the reactive system , which involves direct contact and is reactive to the customers requirements. The left side of the matrix indicates the degree of sales opportunity that exists, while the right side scales the degree of efficiency. Note that as the system becomes more reactive to the customer, higher sales opportunities exist at the price of lower production efficiency. The circles within the matrix represent types of service delivery systems, from the low contact, low sales opportunity, but high efficiency of the mail contact system to the high contact, high sales opportunity, but low efficiency of face-to-face total customization.
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Designs for On-Site Service There are three basic types of designs for delivery of on-site service.
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1. The Production Line Approach - this design treats the delivery of the service as a manufacturing process rather than a service process. The key focus is the “efficient production of results not on the attendance on others.” The classic example of this is McDonald’s, but it has also been attempted in health care systems. 2. The Self-Service Approach - Often used in the on-site technology design. Essentially, this places a greater burden on the customer in the production of the service. Examples of this abound: the salad bar, the self-serve gas station (taken to its extreme recently with pay-at-the- pump), and the ATM machine. Many customers like self-service because it places them in control. This is clearly a major selling point. In other cases, the self-service is a trade-off for convenience (ATMs) or some other desired attribute.
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