Service Design and Management

Chris Jarvis




 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



True or false?

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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



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  Demand variances (peaks-troughs) are significant  Other manufacturing-service differences?
Service Design Issues?
Chris Jarvis

 quantity & quality  productivity



Product, information and service processing

 Where is the service in?
food, pharmaceuticals

 Fertilizers, furniture, vehicles, personal computers,

 Information services?  accountants, lawyers, call centres, insurance offices  Health and pleasure services?
 Beauty , hospitals, health farms, physiotherapists,

Chris Jarvis



Product Service Mix

100% 75% 50% 25% 0%

25% 50% 75% 100%

Self-service green grocer Car manufacture Carpet sales and fitting Pizza Hut Cordon-bleu restaurant Car maintenance Hairdressing Consulting services

Chris Jarvis



Place and approach

Service Strategy Customer Systems Staff

Place/virtual/remote Facilities-based Field-based Internal (client-server) Approaches production line self-service personal attention High and Low contact

Chris Jarvis



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



Service Matrix

Interaction & Customisation Low High
Hospital? Internet banking Repair services

Labour intensity


EasyJet DHL/FedEx Motel Golf course Retailing Wholesaler Driving school Retail bank


Solicitor Doctor Personal trainer Accountant Architect

Chris Jarvis



Banking - High/Low contact

Hig h
Facility location Facility layout Product design Process design Scheduling Capacity planning Staff skills Quality control Time standards Wages Capacity planning
Chris Jarvis

? ? ? ? ? ? Technical skills only? Measurable, fixed Forms = surrogates - tight times Output-based pay? ? 10

Near customer According to expectation? Ambiance, user friendly? Intimate stages ? Full? Lost customer ? ? ? Time-based pay? Capacity=peak demand


Heroes and villains


Recovery planning Customers' experience
Complainant Furious litigation



Club Class member


Villains performance

What is ServQual?

Chris Jarvis



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



Staff, Operations, Innovation and Contact



Helping On demand Routing

Verbal Lines responses

Procedural Craft/trade Control flows Manage capacity

Analytical Client interaction Teams

Operations Forms Focus documents Technol Automation innovation IT

DB queries Application Self-serve eMail software

Chris Jarvis



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 may simplify & 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



Service Design Issues

 A. Engineer for efficiency and utilisation Routinisation
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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



Service design and strategy

 Specify service elements/steps  the tangible
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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

Strategic objectives - best - cheapest - quickest - most innovative - brand loyalty - repeat business

"Service managers face problems that may be insignificant to production managers who have much to learn from the service ethic".
Chris Jarvis



Engineering Strategies for Services

Front shop/Back room

service 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



The Holiday to Aghios Nikolios

 The Brochure - vetting every entry
       

 Representatives

travel and transfer arrangement hotel & apartment check resort/villa environment before brochure publishing: disco, steps to climb etc. 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



Fail-safe Services - Poka-Yoke methods

mistakes becoming  Avoid fail-safe methods to service defects 3T?  Apply and visual warnings  Physical

Was task done correctly? What tangibles or environmental features were missing?? Tangibles

What was attitude and responsiveness of staff? Treatment


Chris Jarvis


Air Travel Service Elements
Request flight information Leave Airport Collect Bags Leave aircraft Make reservation

Poke Yoke Exercise: Filling in the missing details

Arrives at airport

In-flight service

Check in

Board aircraft
Chris Jarvis

Proceed to gate & security check 20


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



Strategy: Focus & Advantage - Performance Priorities

 Product/service innovation  Cost leadership customer  Treatment of the

 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

nd al a Qu erv S ing ark chm Ben

Chris Jarvis



Internal Client-server Relationships

Delight the customer
External client Internal Server Internal client and server

Internal Server

Chris Jarvis


Customers as staff

 self-service - flexibility in coping with demand. front shop/back-room - enabled  separatefilling vs. wand goods into trolleys. by technology. Shelf  remove the need for service attendants.  self-services open longer  some customers advice. miss the help and
     
less waiting time cost reductions for the service provider lower prices

  

Automatic self-service banking bank card payment at the petrol pump

 Where else can they to go?
Chris Jarvis

become excluded - socially neglected



Customer Contact and staffing

 Less skilled staff?

 What do we mean by “customer contact”?  Signs of inefficiency in customer contact?  Differentiate high - low contact services
components that customers value

 More training required.  Loyalty & competence as key quality elements?

 Quality and failure costs. Identify the levels and The service level must be delivered.  Cost the components and evaluate
 contribution of quality?  how much customers will pay?
Chris Jarvis



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



Guarantees and service-level agreements

 Promise of service satisfaction underpinned by actions  Monitoring and controlling  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

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quantified standards subjective standards - meaningful to customer 99% reliability



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



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

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Chris Jarvis



L & J: Nine Service Design Principles
1. define service concept clearly & in detail. ServQual 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.

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Chris Jarvis



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 & support 7. 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 & empower 8. 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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Chris Jarvis



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