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Service Operations Management. Module Objectives. Understand the importance of and need for a service focus within the value-driven operations management system Develop and implement service delivery system designs that maximize customers’ perceptions of service value

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Service Operations Management

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Service operations management

Service Operations

Management


Module objectives

Module Objectives

  • Understand the importance of and need for a service focus within the value-driven operations management system

  • Develop and implement service delivery system designs that maximize customers’ perceptions of service value

  • Assess customers’ perceptions of service quality and develop action plans for closing gaps in service design and delivery

  • Develop plans for preventing poor service and for recovering from failed service encounters

  • Describe some impact of the Internet and telecommunications on e-service delivery and service globalization


Service value

Service Value

Service value can be defined as a function of customers’ perceptions of what they receive in a service encounter relative to what they give or lose in the encounter.


Value equation

Value Equation

Benefits

Value = Total Cost


Quality matrix

Quality Matrix


Total cost

Total Cost

Total cost includes the price that is paid for the service, in addition to, other customer acquisition costs (monetary and nonmonetary).


Nonmonetary acquisition costs

Non-Monetary Service Acquisition Cost

Description

Preparation

Preparing for the service by such actions as seeking referrals, researching competitors, and arriving early.

Relationship Building

Building a relationship with the service provider through such actions as smiling, offering words of kindness, getting to know providers, "trying to build loyalty", and asking for servers by name.

Information Exchange

Providing and seeking information to clarify service expectations and seek status.

Intervention

Providing negative performance feedback and involving oneself in problem diagnosis and resolution.

Nonmonetary Acquisition Costs


Service design

Service Design

Service design ranges from the creation of new service business to the addition, adaptation, or modification of new service elements within an existing business.


Service value proposition

Service Value Proposition

A service value proposition is a succinct statement of the service provided and its expected value to customers.


Value proposition example

Value Proposition - Example

Deferred payments--let you borrow aggressively while matching costs to revenues

Aligned with the manufacturer--finance your network with the company who best understands your business-Cisco Systems-and tailors its financing products to conform to the unique service provider business model

Full financial product suite--Cisco is investing in your success as a business, and forging a long term relationship with you as both a technology and financial partner, with other financing programs you can use later as your business grows

One-stop shopping--with one place to go for best-of-class technology solutions and financing, it's easier and faster to get your network built and business started


Service package

Service Package

  • Explicit services

  • Implicit services

  • Facilitating goods

  • Supporting facility

  • Human resources


Types of services

Types of Services

  • Coproduction approach

  • Production-line approach

  • Customized-care approach

  • Front office and back office


Production line approach

Characteristic

Example

Limited Discretionary Action of Personnel

Levitt’s prototypic service example, McDonald’s, is able to promise customers a consistent service package by automating most parts of the production process and clearly defining employees’ tasks.

Division of Labor.

Cooks, take-out-window cashiers, and front-line cashiers focus on specialized tasks.

Substitution of Technology for People

Lights and buzzers pace hamburger production just as the moving assembly line sets the pace of mass production of automobiles.

Service Standardization

Many travelers frequent McDonald's because they know exactly what to expect.

Production-Line Approach


Service blueprint

Service Blueprint


Fail safing service design

Fail-Safing Service Design


Service recovery

Service Recovery

  • Incorporate recovery into hiring, training, and empowerment

  • Establish recovery guidelines and standards

  • Provide systems that promote easy access and effective responses

  • Maintain customer and product databases


Service gap model

Service Gap Model


Identifying and closing the gaps

Identifying and Closing the Gaps

Gap 1: Failure to understand what our customers expect

Gap 2: Inability to translate expectations into service design specifications

Gap 3: Inability to deliver the service per the design specifications

Gap 4: Communicated expectations that do not match service delivery capabilities

Gap 5: Dissatisfaction due to unmet expectations


Importance performance matrix

Importance-Performance Matrix

High

Responsiveness

Reliability

Assurance

Importance (Expectation)

Empathy

Tangibles

Low

Low

High

Satisfaction


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