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Service Processes

Service Processes. Operations Management Dr. Ron Lembke. How are Services Different?. Everyone is an expert on services What works well for one service provider doesn’t necessarily carry over to another Quality of work is not quality of service

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Service Processes

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  1. Service Processes Operations Management Dr. Ron Lembke

  2. How are Services Different? • Everyone is an expert on services • What works well for one service provider doesn’t necessarily carry over to another • Quality of work is not quality of service • “Service package” consists of tangible and intangible components • Services are experienced, goods are consumed • Mgmt of service involves mktg, personnel • Service encounters mail, phone, F2F

  3. Degree of Customer Contact • More customer contact, harder to standardize and control • Customer influences: • Time of demand • Exact nature of service • Quality (or perceived quality) of service

  4. 3 Approaches • Which is Best? • Production Line • Self-Service • Personal attention

  5. What do People Want? • Amount of friendliness and helpfulness • Speed and convenience of delivery • Price of the service • Variety of services • Quality of tangible goods involved • Unique skills required to provide service • Level of customization

  6. Service-System Design Matrix Degree of customer/server contact Buffered Permeable Reactive High core (none) system (some) system (much) Low Face-to-face total customization Face-to-face loose specs Sales Opportunity Production Efficiency Face-to-face tight specs Phone Contact Internet & on-site technology Mail contact Low High

  7. Applying Behavioral Science • The end is more important to the lasting impression (Colonoscopy) • Segment pleasure, but combine pain • Let the customer control the process • Follow norms & rituals • Compensation for failures: fix bad product, apologize for bad service

  8. Restaurant Tipping Normal Experiment Introduce self(Sun brunch) 15% 23% Smiling (alone in bar) 20% 48% • Waitress 28% 33% • Waiter (upscale lunch) 21% 18% “…staffing wait positions is among the most important tasks restaurant managers perform.”

  9. Fail-Safing • “poka-yokes” – Japanese for “avoid mistakes” • Not possible to do things the wrong way • Indented trays for surgeons • ATMs beep so you don’t forget your card • Pagers at restaurants for when table ready • Airplane bathroom locks turn on lights • Height bars at amusement parks

  10. How Much Capacity Do We Need?

  11. Blueprinting Fancy word for making a flow chart “line of visibility” separates what customers can see from what they can’t Flow chart “back office” and “front office” activities separately.

  12. Demand rate varies by time # customers arriving per hour Time of Day

  13. Demand varies by Customer Min to process customer Customer #

  14. What did we learn? • Human considerations very important in services • Hard to please everyone, because we’re all critics • Degree of customer contact important strategic decision • Keeping things simple is good • Fluctuations in demand making capacity setting difficult

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