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Service Design & Management
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Chris Jarvis MG2066 1
Service Design and Management
Chris Jarvis MG2066 2
Overview
Defining "service"?
Service-Product Mix
Service Guarantees
Service Cycle
Customer Contact
Service Matrix
Employees and Service
Strategy: Focus & Advantage
Service Blue printing
Fail-safe Methods
a Well-Designed Service Delivery System
Chris Jarvis MG2066 3
True or false?
Everyone is an expert on services???
Services are idiosyncratic?
Quality of work is not quality of service?
Most services contain a mix of tangible and intangible attributes?
High-contact services are experienced, goods are consumed?
Managing services marketing, personnel and operations know-how?
Services involve cycles of transactions involving face-to-face encounters, information exchange, social and mechanical interaction?
Chris Jarvis MG2066 4
Service – defined by
Tangible and intangible elements
Most services include elements of products
The customer is involved in delivery
Simultaneous production and consumption
Problems in defining and measuring
quantity & quality
productivity
Demand variances (peaks-troughs) are significant
Other manufacturing-service differences?
Service Design Issues?
Chris Jarvis MG2066 5
Product, information and service processing
Where is the service in? Fertilizers, furniture, vehicles, personal computers,
food, pharmaceuticals
Information services? accountants, lawyers, call centres, insurance offices
Health and pleasure services? Beauty , hospitals, health farms, physiotherapists,
restaurants.
Chris Jarvis MG2066 6
Product Service Mix
100% 75% 50% 25% 0% 100%75%50%25%
Self-service green grocer
Car manufacture
Carpet sales and fitting
Pizza Hut
Cordon-bleu restaurant
Car maintenance
Hairdressing
Consulting services
Goods Services
Chris Jarvis MG2066 7
Place and approach
Customer
ServiceStrategy
StaffSystems
Place/virtual/remoteFacilities-basedField-basedInternal (client-server)
Approachesproduction lineself-servicepersonal attention
High and Low contact
Chris Jarvis MG2066 8
Service Design Questions
Who is our customer?
How do we differentiate our service?
What is our service package & operating focus
What are the processes, staff, facilities?
Can we protect the service?
Aspects of service package - defined by prior staff training
Speed of change of service offerings
Chris Jarvis MG2066 9
Service Matrix
Interaction & Customisation
Low High
Low
High
EasyJetDHL/FedExMotelGolf course
RetailingWholesalerDriving schoolRetail bank
SolicitorDoctorPersonal trainerAccountantArchitect
Hospital?Internet bankingRepair services
La
bo
ur
inte
ns
ity
Chris Jarvis MG2066 10
Banking - High/Low contact
LowHigh
Facility location
Facility layout
Product design
Process design
Scheduling
Capacity planning
Staff skills
Quality control
Time standards
Wages
Capacity planning
Near customer
According to expectation?
Ambiance, user friendly?
Intimate stages
?
Full? Lost customer
?
?
?
Time-based pay?
Capacity=peak demand
?
?
?
?
?
?
Technical skills only?
Measurable, fixed
Forms = surrogates - tight times
Output-based pay?
?
Chris Jarvis MG2066 11
Heroes and villains
Customers'experience
performance
Furiouslitigation
Complainant
Dissatisfied
Satisfied
Delighted
Villains
HeroesRecovery planning
ClubClassmember
What is ServQual?
Chris Jarvis MG2066 12
Operating Focus
Customer treatment - friendliness, help
Speed and convenience of delivery
Price and payment
Variety of services (singular or one-stop shop)
Quality of tangibles e.g. the pie, the insurance
Unique skills - flambe, hair cut, roofer
Chris Jarvis MG2066 13
Staff, Operations, Innovation and Contact
Skills
Technolinnovation
OperationsFocus
Clerical
AutomationIT
Formsdocuments
Helping
Routing
Ondemand
Verbal
DB querieseMail
Linesresponses
Procedural
Applicationsoftware
Controlflows
Craft/trade
Self-serve
Managecapacity
Analytical
Teams
Clientinteraction
Chris Jarvis MG2066 14
Service Design, Quality and Intangibles
Quality (measured by deliverer or customer) depends on Tangibles and intangibles in the package. Controls to improve utilisation & reduce costs.
These maysimplify & routinise to reduce consumer choice. A, B & C - take-or-leave-menus. But "I do not want a standard package". "Fine - but pay more. Even then we may not be
able to control quality".
Chris Jarvis MG2066 15
Service Design Issues
A. Engineer for efficiency and utilisation Routinisation Table d'hote packages Impersonal vs. contact Move from point of contact to back-office Automate e.g. ATMs, tele-sales & call-centres, tracking systems
B. Design from a customer service perspective (content + quality of interaction/experience) enrich the experience balance perceived quality with costs of service customer-orientation: research & specify relationships what is a TQM approach to service design? specify service objectives and bench-mark against rivals
A & B - not mutually exclusive.
Chris Jarvis MG2066 16
Service design and strategy
Specify the tangible service elements/steps customer participation waiting (cannot stock a service) the intangible aspects how efficiencies must be secured quality assurance measures
Move front shop ==> back shop take the customer out of the process use the customer as labour increase staff flexibility to balance capacity & demand
"Service managers face problems that may be insignificant to production managers who have much to learn from the service ethic".
Strategic objectives- best- cheapest- quickest- most innovative- brand loyalty- repeat business
Chris Jarvis MG2066 17
Engineering Strategies for Services
Front shop/Back roomservice design may seek to minimise customer participation
"front shop" for face-to-face elements. select activities to move to "back-room" and apply
conventional production principles no customer access to back-room?
Internet banking
On-line help desk
Chris Jarvis MG2066 18
The Holiday to Aghios Nikolios
The Brochure - vetting every entry travel and transfer arrangement
hotel & apartment
check resort/villa environment before brochure publishing: disco, steps to climb etc.
Representatives visit daily + available for clients
ability to act - fielding the problem (no prejudice)
narrow margins - one refund Ë flood.
minor complaints but clients are trapped.
be irritated or pay extra to fly home
The flight home
Chris Jarvis MG2066 19
Fail-safe Services - Poka-Yoke methods
Avoid mistakes becoming service defects Apply fail-safe methods to 3T? Physical and visual warnings
Task
TangiblesTreatment
Was task done correctly?
What was attitudeand responsiveness
of staff?
What tangibles or environmental features were
missing??
Chris Jarvis MG2066 20
Air Travel Service Elements
LeaveAirport
CollectBags Arrives at
airport
Request flight information
Makereservation
Check in
Proceed to gate& security check
Boardaircraft
In-flightservice
Leaveaircraft
Poke Yoke Exercise:Filling in the missing details
Chris Jarvis MG2066 21
Gaffs - Mea Culpa?
• Waitress chewing gum• Nurse did not wash hands• Wine is corked• Food is cold• Booked into wrong hotel• Passenger forgets passport• Passenger late for check-in• 50 minutes between placing order and service to table• Lost record card at clinic• etc
Chris Jarvis MG2066 22
Strategy: Focus & Advantage - Performance Priorities
Product/service innovationCost leadership
Treatment of the customer Speed and convenience of service delivery Pricing and pricing structure Variety - pick and mix, uniqueness, modularisation The quality of the tangible goods Awareness and valuation of the intangibles Unique skills that constitute the service offering
ServQual and
Benchmarking
Chris Jarvis MG2066 23
Internal Client-server Relationships
Internal Server
Internal Server
Internal clientand server
Externalclient
Delight the customer
Chris Jarvis MG2066 24
Customers as staff
self-service - flexibility in coping with demand.
separate front shop/back-room - enabled by technology. Shelf filling vs. wand goods into trolleys. Automatic self-service banking bank card payment at the petrol pump
remove the need for service attendants.
self-services open longer less waiting time cost reductions for the service provider lower prices
some customers miss the help and advice. become excluded - socially neglected
Where else can they to go?
Chris Jarvis MG2066 25
Customer Contact and staffing
Less skilled staff?
More training required.
Loyalty & competence as key quality elements?
What do we mean by “customer contact”? Signs of inefficiency in customer contact?
Differentiate high - low contact services
Quality and failure costs. The service level must be delivered. Identify the levels and components that customers value
Cost the components and evaluate contribution of quality?
how much customers will pay?
Chris Jarvis MG2066 26
Services and staff flexibility
Excess capacity or rely on PTs to balance capacity - demand? More PTs ==> increase in workforce size.
unfamiliar with products & systems, less skilled.
Labour turnover and reliability - Vicious circle.
Few hours, move on quickly - why train?
Need quality staff but investment not justified
So we live with unskilled, uncommitted staff.
Remedies? multi-skilling and rewards
back-room staff move to front shop at peak time
skeleton crew at the back
Success depends on sensitivity of backroom tasks
Chris Jarvis MG2066 27
Guarantees and service-level agreements
Promise of service satisfaction underpinned by actions
Monitoring and controlling quantified standards
subjective standards - meaningful to customer
99% reliability
Pay-out/penalties on failure
Unconditional - no small print
Easy to understand and to communicate
Straightforward to invoke•Flight overbooked•Train late•ISP downtime
Chris Jarvis MG2066 28
Well-Designed Service System
• Each element -consistent with operating focus
• user-friendly
• robust
• designed for consistent performance by staff & systems
• Seamless links between back & front office.
• evidence of service quality is visible - customers "see" the value provided. Credible?
• cost-effective.
Chris Jarvis MG2066 29
Principles - Lyth and Johnston (1988)
balance service efficiency with requisite quality.
Focus on
intangibles within service package
the customer viewpoint
critical role of customer contact staff & how they are supported.
performance monitoring
internal consistency within the service system
Chris Jarvis MG2066 30
L & J: Nine Service Design Principles
1. define service concept clearly & in detail.
2. evaluate image concept
good service labelled poor if image out of line with customer expectations
trace back to service presentation
3. study the customer view (be a customer)
manage expectations & perceptions during & after
break out of designer & operator "bounded rationality & familiarity".4. Top management commitment to service quality
Mission + clear objectives. Quality: inextricably linked to staff-customer contact. MbyExample: top mgt. lip-service undermines credibility
5. Define functional & technical quality standards
tangibles - as for physical products.
intangibles & subjective elements key ingredients in package e.g. cleaning, waiting, manner/appearance, skills share understandings, recruit, train & reward for delivery expectation.
ServQual
Chris Jarvis MG2066 31
L & J: Nine Service Design Principles
6. examine existing procedures and systems
"re-design" to support front-end providers.
service the servers via back-room procedures & support7. develop standard procedures to control
bankers (routinise), semi-controllables & unpredictables
routines may not fit random events
if safety critical - allocate resources
emphasise training for the unexpected, communicate & empower8. systems must support the good service objectives.
treat customer service staff as internal customers. 9. implement standards & performance monitoring
Or drift, loose energy & deteriorate. inspection activities are essential action to restore and revitalise where needed. Inspection/feedback: SPC, surveys, panels, "mystery" shoppers
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