Service Design and Management

Chris Jarvis

MG2066

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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

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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

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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

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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,
restaurants.

Chris Jarvis

MG2066

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Product Service Mix

Goods
100% 75% 50% 25% 0%

Services
25% 50% 75% 100%

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

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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

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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
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Service Matrix

Interaction & Customisation Low High
Hospital? Internet banking Repair services

Labour intensity

Low

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

High

Solicitor Doctor Personal trainer Accountant Architect

Chris Jarvis

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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

Low
? ? ? ? ? ? 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

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Heroes and villains

Delighted

Recovery planning Customers' experience
Complainant Furious litigation

Satisfied

Heroes

Club Class member

Dissatisfied

Villains performance

What is ServQual?

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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
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Staff, Operations, Innovation and Contact

Skills

Clerical

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

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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

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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.
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Service design and strategy

 Specify service elements/steps  the tangible
    
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".
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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
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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
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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
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Task

Chris Jarvis

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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

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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

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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

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Internal Client-server Relationships

Delight the customer
External client Internal Server Internal client and server

Internal Server
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Chris Jarvis

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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

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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?
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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

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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

  

quantified standards subjective standards - meaningful to customer 99% reliability

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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.

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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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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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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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