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5 - Service Process Design(1)

5 - Service Process Design(1) - Operations Management...

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Unformatted text preview: Operations Management Operations Contemporary Concepts and Cases Service Process Design Outline Defining Service The Service-Product Bundle Service Matrix Customer Contact Service Recovery and Guarantees Service Globalization of Services Globalization Employees and Service 5-2 5- Definition of Service Key Concepts Intangibility of the product Simultaneous production and consumption No finished goods inventory Difficulty in defining and measuring quality Difficulty and productivity and Other Differences between Manufacturing and Other Service (See Table 5.1) Service 5-3 5- Production of Services vs. Goods Typical Differences Services are process focused. Customers served as first come, first served. Labor is scheduled, not the customer. Location often near customers. Result: service production tends to be less Result: efficient than production of goods. efficient 5-4 5- Service-Product Bundles The Service-Product Bundles has three parts: tangible service (explicit service)—what the seller does for you. seller psychological benefits (implicit service)— how you feel about it. physical goods (facilitating goods)—what you can carry away you 5-5 5- Customer Contact Definition of “contact”—interaction Definition between service provider and the customer. 5-6 5- Customer Contact Matrix (see fig. 5.3) Low customer contact – – – – – High production efficiency Low sales opportunity Workers with clerical skills Focus on paper handling Office innovation High customer contact High – – – – – 5-7 5- Low production efficiency High sales opportunity Workers with diagnostic skills Focus on client mix Client/worker teams as innovation Customer Contact Inefficiency Potential inefficiency in services is a function of Potential inefficiency the amount of customer contact the Why? Variability. – – – 5-8 5- Customer determines the time Customer determines the order of service Customer influences what happens during the Customer service service Customer Contact Variability Types of Variability induced by customers in Types service delivery: service arrival – when they arrive to consume a service request – what they ask for in the bundle capability – ability of customers to participate effort – willingness of customers to participate subjective preference – preferences of customers in subjective how service is carried out how 5-9 5- Customer Contact Directness High contact (front room) services – Direct customer contact – Customer has control of process Low-contact (back room) services – Out of sight of customer – Provider has control of process Goal: move as much activity as possible to Goal: the back room—why? the 5-10 5- Related Concepts Service Recovery – What you do to compensate the customer for bad What service. service. – Fly in your soup: new bowl of soup plus free dessert Service guarantee – Analogous to a guarantee for a product – Requires specific criteria and responses – Pizza delivery: in 30 minutes or free! 5-11 5- Technology in Services Contrasting Views: Production-line approach to service – Standardization – Automation Automation Employees are the center of service delivery Employees – Technology to support front-line employees – Value investments in employees – Place importance on recruiting front-line employees 5-12 5- Outsourcing & Offshoring of Outsourcing Services Services Outsourcing: having an organization outside your Outsourcing: own firm perform service activities such as workforce recruiting, payroll management, accounting services, and call center functions. accounting Offshoring: the export of these service activities Offshoring: to other countries. to 5-13 5- Employees and Service Links in the service-profit chain (See Figure 5.5) Internal service quality, leads to… Employee satisfaction, leads to… Employee retention & productivity, lead to… External service value, leads to… Customer satisfaction, leads to… Customer loyalty, leads to… Revenue growth & profitability (the goal) 5-14 5- Summary Defining Service The Service-Product Bundle Service Matrix Customer Contact Service Recovery and Guarantees Service Globalization of Services Globalization Employees and Service 5-15 5- End of Chapter Five 5-16 5- ...
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