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Combining Service Blueprint and FMEA for Service Design

PAO-TIAO CHUANG1

This paper aims at combining the service blueprint and Failure Modes and Effects
Analysis (FMEA) to assist the service designers in designing a failure-free service
system. In the proposed approach, a service blueprint of a service system should
be, first, developed to identify the potential fail points and failure modes for both
the front office and the back office service activities. Based on the blueprint, the
FMEA tool is, then, applied to prioritize the critical potential failure modes of the
service system and take the required actions to ensure the service design
performance. An example regarding to a hypermarket service system was used to
demonstrate the proposed approach. The example not only identifies the most
potential failure modes but also provides the effects and possible causes for each
of the most critical failure modes. This implies that the preventive actions for
these failure modes from occurring should be the top focus in the service design
stage of the example company. Some managerial implications are also provided.
Key words: Service Design; Service Failure; Service Blueprint; Failure Modes
and Effects Analysis.

1. INTRODUCTION
Service industries have been the source of economic leadership for most developed and
developing countries in the past two decades. According to Verma [2000: 8-25], as the
post-industrial economy evolves, the service sector continues to increase in importance, both
in terms of its contribution to the gross domestic product (GDP) of all advanced economies
and in terms of the percentage of workforce employed in services. By all accounts, more than
half of the developed countries’ gross domestic product (GDP) is in the service sector [Menor
et al., 2002: 135-57; Pilat, 2000: 52-54]. And by the statistics data from the Department of
Statistics, Ministry of Economic Affairs, R.O.C. [2005], service related industries account
about seventy percent of the nation’s total GDP in Taiwan.
Service industries often provide social/personal services, transportation, finance,
advertising, repair, distribution, or communication support for manufacturing industries [Ma
et al., 2002: 15-39]. Concurrent to the economic growth, Ma et al. [2002: 15-39] addressed
1
Pao-Tiao Chuang is Professor of Department of Asia-Pacific Industrial and Business Management, National
University of Kaohsiung, Taiwan. No. 700, Kaohsiung University Road, Nan-Tzu District, Kaohsiung 811,
Taiwan.

1

in service design and development. 2004: 361-67]. Though existing research proposed the paradigm model for designing service systems. 2002: 121-34]. 2.g. most of the existing research considered the effects of process factors. but who are also profitable. The goal of service design can be described in terms of attracting and keeping customers who are satisfied. Edvardsson. Brentani. to the service results [e. 2002: 121-34] and the service systems should be designed for the realization of customer processes and achieving the service performance. designing a service means defining an appropriate mix of physical and non-physical components [Goldstein et al. Thus. And from the service organization’s perspective. to define the how and what of service design and help linking the customer needs and an organization’s strategic intent [e. 2001]. loyal and speak well of the company.. Goldstein et al. to consider and respond to customers’ expectations in designing each element of the service [Edvardsson. Ma et al. The idea of service design is to design high quality into the service system from the outset. RESEARCH MOTIVATION Even zero defects is the desired objective for most firms. 1995: 93-103. 2004: 187-204]. it is unlikely organizations will achieve this goal..g. A Service failure occurs when customers’ expectations are not met [Mueller et al.that economic development and the change in the standards of living have caused changes in human consumption patterns. Similar to service quality and satisfaction. an effective service system should also be designed to prevent the failures from occurring and reduce the risk of service failures. A service business must understand what customers really need and then delivered its service accordingly [Chiu and Lin. service assurance and service quality should be embodied in the service design stage to ensure the abilities of service offerings. 1997: 31-46]. and suppliers. the service sector aims at optimally allocate the limited resources in designing the service system that can satisfy customers’ needs and accrue high productivity for the service firms. Weber and Sparks. the management of new service development becomes an important competitive concern in many service industries [Fitzsimmons and Fitzsimmons. employees. 2002: 15-39]. Therefore.. In the mean time. Service design is an upstream management from the origin.. 1997: 31-46. In this regard.. 2003: 395-418). 2003: 395-418. Human needs are satisfied with not only physical goods but also invisible services. Others suggested the role of service concept.. This is particularly true of service industries where the multi-dimensional nature of the service encounter creates an environment where service failure is almost inevitable [Mueller et al.. such as customers. it is customers’ perception that determines whether a service failure occurred even if the 2 .

g. Though FMEA is widely used in the manufacturing sector. or organizational artifacts [e. Moreover. with which the consumer interacts. 2005: e158. 2003: 395-418. 2004: 361-67]. researches on service failure recovery strategies and actions were proposed in many literatures [e. Hocutt and Stone.... In this aspect. The visible part of the operations process. 2000: 387-400. 1996: 219-29]. Fitzsimmons and Fitzsimmons. In facilitating the service design. must be supported by the invisible process [Hoffman and Bateson.companies with the best strategic plans and the tightest quality control procedures and the service has been performed according to the blueprint established by the service provider [Goldstein et al. to compensate and alleviate the effects of the service failure. Mattila and Patterson. Maxham. The goal of FMEA is to predict how and where systems. health related industries. Weber and Sparks. literatures regarding to the FMEA in service industries are not widely found. Webster and Sundaram. 2004: 1211-15..g. Therefore. Cohen et al. a systematic approach that could identify and prioritize the potential service failure modes with the corresponding risks during the service design stage is very important and needed. 2004: 824-29. [1996: 107-15] mentioned that nothing is better than performing a service to a customer’s satisfaction the first time. 2002: 152].. 2004: 196-206. In this regard. It can improve operational performance of the service system and reduces the overall risk level.. might fail. It is an important method of preventive quality assurance [Wirth et al. it enables the marketing manager to understand which parts in the operating system are visible to the consumer. 1984: 134]. 1996: 539. 2001: 11-24.. 2004: 957-63]. combining service blueprint with service failure analysis that identifies critical potential failure modes and take the preventive actions in the design stage becomes a very important issue in the service industries. 2002: 121-34. 2002: 121-34. Wong. Whereas.. with few on medical surgery. 3 . Mueller et al. identify actions that could eliminate or reduce the likelihood of the potential failure occurrence and document the entire process [Johnson.. Failure Modes and Effects Analysis (FMEA) is a systemized group of activities that intent to recognize and evaluate the potential failure of a product or process. that were designed to detect errors and alert staff. 1998: 117-32. Busby et al. Halstead et al. Goldstein et al. a service blueprint is a map or flowchart (called a process chart in manufacturing) that shows all transactions constituting the service delivery process [Shostack. nothing is worse than failing to detect a problem or failing to obtain information from a dissatisfied customer. Thus. 1994: 40. 1997]. 1984: 134. Miller et al. It is also a flow chart that isolates potential fail points in a service process [Shostack. Hollick and Nelson. 2001]. 1998: 153-59. Monti et al.. Radermacher et al.

2001]. To demonstrate the proposed approach. 1984: 134. the FMEA tool was applied to prioritize the critical potential failure modes.. first. The proposed failure-free service design model is shown in Figure 1. 1984: 134]. some activities are processing information. It enables the marketing manager to understand which parts in the operating system are visible to the consumer---the fundamental building blocks of consumer perceptions. a service failure criticality analysis is performed according to the Risk Priority Number (RPN) of each potential failure modes. Service blueprint is a useful tool not only for the operations manager but for the marketing manager as well [Hoffman and Bateson. must be supported by the invisible process [Hoffman and Nateson. Tellefsen. RESEARCH GOALS This paper aims at combining the uses of service blueprint and failure analysis in a service company to prevent the critical failures from occurring and reduce the risk of service failures. Haksever et al. [2000] further explains that it is a visualization of the designer’s concept of the product/process together with its dimensions and tolerances. This would ensure the service quality before the service is delivered. an example regarding to the hypermarket store was used. SERVICE BLUEPRINT A service blueprint is a map or flowchart (called a process chart in manufacturing) of all transactions constituting the service delivery process [Shostack. Fitzsimmons and Fitzsimmons. 3. 2005: e162-e163]. In a service blueprint. The RPN’s are used to determine the risk of potential failures and prioritize the needed preventive actions and the resource allocations before the service is delivered. 2005: 569-78. the occurrence probability. and the detection ability are achieved from a questionnaire survey on the employees and managers of a chain hypermarket store with four branches in Taiwan. In the model. The visible part of the operations process. to identify the potential fail points and failure modes for both the front office and the back office activities. 1997]. The required data regarding to the severity degree. [take in Figure 1] 4. 1997].Scipioni et al. It is a flow chart that isolates potential fail points in a service process [Shostack. a service blueprint needs to be developed. Then. with which the consumer interacts. others are interactions 4 . Based on the blueprint.

Studying the service blueprint could suggest opportunities for improvement and also the need for further definition of certain processes [Fitzsimmons and Fitzsimmons. which is out of the customers’ view. 1998: 97-100]: (1) Identify all potential failure modes of the service system. 2001]. Toeh and Case. where customers obtain tangible evidence of the service. 2002: 17-29]. and eliminate known potential failures. 2001: 1987-94.. 1996: 219-29]. If the potential effects of the errors are intolerable. According to Pillay and Wang [2003: 69-85]. prioritize. 2004b: 107-15.. Lore. Pillay and Wang. Guimarães and Lapa. 2004a: 191-213. Xu et al. The line of visibility separates activities of the front office. Nakajima et al. for special consideration. FAILURE MODES AND EFFECTS ANALYSIS Failure Modes and Effects Analysis (FMEA) is a reliability analysis tool widely used in the manufacturing sectors. 5. Vandenbrande. 1999: 48-52. and still others are decision points. thus ensuring the delivery of high-quality service. This separation highlights the need to give special attention to operations above the line of visibility. FMEA is intended to provide information for making risk management decisions. aerospace. 1994: 40]. Rhee and Ishii.. might fail. Price and Taylor. In summary. 2003: 69-85. that were designed to detect errors and alert staff. from those of the back office. such as providing protocols to avoid mistakes. 2003: 179-88. problems. Guimarães and Lapa. action is taken to eliminate the possibility of errors or to minimize their consequences [Cohen et al. to identify. Sankar and Prabhu. 2002: 495-501.with customers. 1998: 144. where customer perceptions of the service’s effectiveness are formed. 2002: 152.g.. The goal of FMEA is to predict how and where systems. 2002: 511-21. The blueprinting exercise also gives managers the opportunity to identify potential fail points and to design foolproof procedures to avoid their occurrence. The decision points are shown as diamonds to highlight these important steps. 2002: 1-10. Scipioni et al.. It is an important method of preventive quality assurance [Wirth et al. 2004b: 253-60. a blueprint is a precise definition of the service delivery system that allows management to test the service concept on paper before final commitments are made. Toeh and Case. such as automotive. The blueprint also facilitates problem solving and creative thinking by identifying potential points of failure and highlighting opportunities to enhance customers’ perceptions of the service.. Johnson. 2004a: 289-300. and electronics industries. and errors from systems under design before the product is released [e. 5 . The FMEA procedure can be summarized as follows [Cotnareanu.

receiving and inspecting the incoming goods/merchandise. A service blueprint of a service system was. as well as waiting in the cashier line. that there are three possible waiting points that customers might experience: looking for vehicle parking space and shopping cart. the customers go through the procurement activities of choosing goods/merchandise. The possible fail points and the potential failure modes for each of the activities are also provided in the service blueprint.(2) Relate the possible causes. then. the research provides the service blueprint for a hypermarket Store. from Figure 2. The back office activities involve the inbound and replenishment logistics that support the front office activities. After cashiering all the purchased goods/merchandise. and experiencing the post-service from the service provider. waiting for weighing goods/merchandise pounds. (4) Provide suitable follow-up or corrective actions for each type of failure mode. The hypermarket service process starts from customers arriving at the store and getting the shopping cart.1 Service Blueprint for Hypermarket Example In this section. the FMEA tool was. Followed by entering the sales floor. 6. as shown in Figure 2. We can also see. developed to identify the potential fail points and failure modes for both the front office and the back office service activities. the customers leave the store. entering sales floor. by conducting the hypermarket practices. 6. weighing those items that priced by its weights. goods/merchandise warehousing and inventory activities. [take in Figure 2] 6 . (3) Prioritize the failure modes relative to their probabilities of occurrence. Based on the blueprint. and detection capability. and replenishing goods/merchandise to the shelf of sales floor. cashiering the goods/merchandise. where the hypermarket store activates its post-service activities. applied to prioritize the critical potential failure modes of the service system and take the required actions to ensure the service design performance. The front office activities involve customer arrival. leaving the store. choosing goods/merchandise. first. failure criticality (or severity). effects. getting shopping cart. They involve procurement/purchase activity. and hazards of each of failure. DEMONSTRATED EXAMPLE This section will apply the proposed approach in the hypermarket store that assist the service design.

This survey was assisted by a chain hypermarket store. 1 means the least likely it is for the corresponding failure mode to occur and 5 means the most likely. In-service involves customer choose/purchase flow and cashier flow. In the questionnaire. Post-service involves post-sale activity and warranty. Each sub-system involves several sub-processes or activities. a five-scaled rating from 1 to 5 is used for each failure modes. To compute the risk priority number (RPN) that differentiate the effect of each potential failure modes. and the degree of detection ability of each failure modes. and post-service. occurrence rating. and detection rating are collected by a questionnaire survey. for the occurrence rating. In this regard. the occurrence rating. And the RPN for each failure mode was computed as Equation (1) and shown on the right-most column of 7 . Each sub-system involves several sub-processes or activities. 16 are middle/floor managers. respectively. the fifth. which has four branch stores in Taiwan (We will call it T-store in the rest of the paper). sales floor security. and the sixth columns. one hundred questionnaires were sent to the employees of the T-store. and sales floor surroundings. in-service. The respondents were asked to rate the degree of severity.2 Failure Criticality Analysis for the Hypermarket Example and Discussions To perform the FMEA. in total. twenty three potential failure modes. Prior-service involves incoming goods/merchandise activity as well as warehousing and inventory activity. in-service. Among these.6. Among those. the service system of a hypermarket store is decomposed into four sub-systems: service facility. and 78 are first-line servers. By prior contact with the T-store and having their approvals. That is. the required data of severity rating. for the detection rating. are structurally listed for further analysis. pre-service. 1 means that the store has the highest degree of control ability to prevent the corresponding failure mode from occurring and 5 means the lowest degree of control ability. the probability of occurrence. and the detection rating for each failure mode in the FMEA analysis were computed by the arithmetic average of the surveyed data and shown on the fourth. 1 means the least severe it is if the corresponding failure mode occurs and 5 means the most severe. In the service failure analysis. for the severity rating. the service system of a hypermarket store is decomposed into four sub-systems: service facility. The potential failure modes for each sub-process/activity are then explored and listed according to the service blueprint of the hypermarket store. The severity rating. 6 are executive managers. the potential failure modes for each sub-process/activity are developed and listed according to the service blueprint. of Table 1. service facility involves sales floor facility. and post-service. To accomplish the service failure analysis systematically. prior-service.

the Q3 falls in the 18th ranked value. Q3 = third quartile value and represents that 25% of the RPN values are higher than the third quartile. The higher the RPN is the more preventive action needed for the failure mode from occurring is. “Warranty/repair failure in timeliness. Thus. n = number of RPN values in the data set (in this example. “Slowness of cashier speed”. the service recovery strategy and actions regarding to these failure modes should also attain the most attention and should be planned in advance in order to restore the service. In order to identify the more critical failure modes. these RPN values are ordered. CONCLUSION A Service failure occurs when customers’ expectations are not met. 23. It is very important for the service designer to identify the potential service failures and take the required action in 8 . which is also close to the Q3.28. RPN = S × O × D (1) Where. A further analysis regarding to the effects and possible causes for each of the seven most critical failure modes was also provided in Table 2. It also needs some preventive actions in advance. to find the third quartile (Q3) as the reference value.27. n=23). items. and “Nonconforming quality of goods/merchandise”. In the mean time. are “Unstable supply of goods/merchandise”. from lowest to highest value. “Air-conditioning malfunction”. immediately. “No goods/merchandise on designated shelf of the sales floor”. Therefore. because the RPN for the failure mode of “Unable to find first-line server in the sales floor” is 23. [take in Table 1] From Equation (2). by priority order from the highest.  (n + 1)  Q3 =  × 3 ranked value (2)  4  where. Those RPN values higher than Q3. S=Severity rating. In addition. O=Occurrence rating. charge”.Table 1. D=Detection rating. these seven failure modes represent the most critical failure modes in the T-store. the preventive actions for these failure modes from occurring should be the top focus in the service design stage of the T- store. if they do occur. [take in Table 2] 7. RPN=Risk priority number.

“Slowness of cashier speed”. for the sponsorship in this research under the grant (NSC 94-2213-E-390-001). and “Warranty failure in timeliness. the service designer should prioritize the potential service failure modes in order to take the preventive actions before the service is delivered. 9 .advance to prevent the failure from occurring. “Nonconforming quality of goods/merchandise”. This paper combined the service blueprint and the failure criticality analysis in the service design stage to ensure that the service system can prevent the critical failures from occurring and reduce the risk of service failures. The research provides an approach that assists the service designer in understanding the potential service failure modes as well as knowing how and where to take the preventive actions for its service system. Taiwan. ACKNOWLEDGEMENT The author gratefully acknowledges the National Science Council. An example regarding to a hypermarket store was used to demonstrate the proposed approach. The effects and possible causes for each of the most critical failure modes are also provided. and “Unable to find first-line server in the sales floor”. it can also provide other service industries an approach to arriving ideal service design by combining the service blueprint and the failure analysis. In addition. And because of the limited resource. for his kind assistance in this research. the service blueprint is a flow chart that isolates potential fail points in a service process. The results show that the most potential failure modes in the selected chain hypermarket example are: “Unstable supply of goods/merchandise”. items. store manager of the T-store. A further analysis regarding to the failure effects and the possible causes for these five failure modes is also provided. “Air-conditioning malfunction”. It facilitates problem solving and creative thinking by identifying potential points of failure and highlighting opportunities to enhance customers’ perceptions of the service. “No goods/merchandise on designated shelf of the sales floor”. Thus. the preventive action for these failure modes from occurring should be the top focus in the service design stage of the T-store. I would also appreciate Eric I-Chen Lin. The results would not only assist the hypermarket service company to ensure its quality assurance of the service system. charge”.

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Proposed Failure-Free Service Design Model 13 .Service Blueprint Failure Modes and Effects Analysis Review the Determine potential service failure modes process List potential effects of each failure mode Use schematics and Determine the causes flowcharts of each failure to identify components And relations among List current control components process Assign a severity Assign an rating for each occurrence rating effect for each failure mode Assign a detection Identify rating for each failure operational and mode and effect environmental stresses that affect the Calculate Risk Priority system Number (RPN) for each effect Design / Redesign actions Prioritize failure modes for design action Take actions to eliminate or reduce the high risk failure modes in design stage to ensure service design performance Figure 1.

items. Customer Insufficient parking space arrival F Procurement/ Forecasting error of goods W Purchase F Get shopping Shopping cart malfunction cart F Unstable supply of goods Incoming Air conditioning malfunction goods/ Tardiness of incoming goods merchandise Enter sales Escalator malfunction activity F Incoming inspection failure floor F Emergency alarm failure Inappropriate arrangement of sales floor Goods/ Inconsistency between actual and book inventory Choose Nonconforming quality of goods/merchandise merchandise goods/ Inventory merchandise F Wrong location of No goods/merchandise on sales shelf warehousing goods F Unable to find first-line server W Bad attitude of first-line server Replenish goods/ Wrong replenishment of merchandise goods in sales shelf to sales shelf Weigh Weigh & stick Wrong price tag pounds F price tag Price tag not stick well Yes Yes No F Choose more goods Symbolic Notation: : No F Fail point W F Slowness of cashier speed Cashier Bad attitude of cashier server Wrong cashier amount of money Decision point Leave F Inappropriate complaints adjustments Customer wait W Post-Service Inappropriate returned/refund policy Warranty failure in time. charge Front office activities Back office activities (Seen by customers) (Not seen by customers) Line of Visibility Figure 2. Service Blueprint for the Hypermarket Example 14 .

77 14.07 2.84 2.05 23.28* Purchase Unable to find first-line 2.67 2.48 2.32 server Wrong cashier amount of money 2.68* Cashier Bad attitude of cashier Flow 2. Sub.96 2.48 2.27* In-Service Flow server in the sales floor Bad service attitude of first-line server 2.80 2.74 20.75 Inappropriate Post-Service Post-Sale complaints/liability 3.58 2.34 Air-conditioning Sales 3. Table 1.46 2.81 2. Failure Analysis in the Hypermarket Example Sub.91 21.18 2.00 2.84 14.03 14.00 2. and 2.05 2.74 2.01 3.35 3.65 3.85 1.38 Surroundings Unstable supply of Incoming goods/merchandise 3.01 16.83* sales floor Customer Nonconforming quality of Choose/ goods/merchandise 3. charge 2.93 2.45 3.87 21.19 2.40 2.94 23. Potential Severity Occurrence Detection Risk Priority System Process/ Failure Mode Rating Rating Rating Number (RPN) Activity (1—5) (1—5) (1—5) Insufficient parking space 2.29* Goods/ Tardiness of incoming Merchandis goods/merchandise 2.91 goods/merchandise Warehousing Inconsistency between and actual and book 2.65 23.62 impair Sales Floor Emergency.99 15.38 Security security alarm failure Sales Inappropriate streamline Floor arrangement of sales floor 3.92 Warranty Warranty/repair failure in timeliness.35 2.57 e Activity Incoming inspection Prior-Service failure of 2.89 2.65 3.01 16.93 15.57 Wrong price tag / price tag missing 2.36* * : the most critical failure modes 15 .68 2.79 21.51 2. items.09 2.54 3.09 25.38* malfunction Service Facility Floor Escalator malfunction 2.36 Inventory inventories Activity Wrong location of warehousing 2.83 2. fire.10 2.94 2.00 23.47 2.94 23.57 27.29 2.64 2.85 18.99 goods/merchandise No goods/merchandise on designated shelf of the 3.78 18.63 Slowness of cashier speed 2.76 2.89 22.10 21.01 21.38 Activity adjustments Inappropriate returned/refund policy 3.42 3.91 3.15 2.50 2.51 2.62 goods/merchandise Forecasting error of 2.32 2.29 Facility Shopping cart malfunction/damage/ 2.76 3.13 2.35 2.

training *Poor employee-job fit *Failure to plan number of cashiers that reflect peaks and valleys of demand *wrong price tag or price tag missing 5 Warranty / repair *Increasing customer costs *Ineffective communication with failure in timeliness. charge *Lost customers *Poor design of warranty process *Poor management of maintenance/ repair contractors *Lack of empowerment *Over promising 6 Nonconforming *Affect food safety *Poor supplier evaluation and selection quality of goods / *Against regulations/ Be fined *Inspection failure for incoming merchandise *Facing lawsuit goods/merchandise *Adverse goodwill of store *Poor warehousing/storage *Increasing discard/scrap costs conditions/activities *Ineffective examination/ checkout on goods/merchandise 7 Unable to find *Lost sales *Poor job allocation of employees first-line server in *customer complaints *Failure to match supply and demand the sales floor *Lack of empowerment *Dawdled employees 16 . Effects and Causes Analysis for the Seven Most Critical Failure Modes Criticality Failure Mode Effects Possible Causes Priority 1 Unstable supply of *Shortage of goods/merchandise *Poor supplier evaluation and selection goods/merchandise *Lost sales *Inappropriate supplier relationship *Decreasing customer loyalty management *Customer complaints *Insufficient inventory of suppliers *Complicating job allocation and *Inadequate marketing research replenishment activity *Lack of upward communication *Adverse goodwill of store *Insufficient customer relationship focus *Failure to match supply and demand 2 Air-conditioning *Deteriorate or spoilage foods *Poor maintenance of air-conditioning malfunction *Customer complaints *Aged air-conditioning *Customers run away *Fail to adjust the sales floor temperature based on number of customers in the sales floor *Poor electric power design 3 No goods / *Lost sales *Insufficient replenishment of merchandise on *customers can not find the goods goods/merchandise in sales shelf designated shelf of *customer complaints* *POS system failure the sales floor *Goods/merchandise in wrong shelf *Unclear or wrong tag of goods/ merchandise *Failure to match supply and demand *Inadequate horizontal communication *Over promising in advertising 4 Slowness of *Increasing customer waiting time *Mistakes in cashier system cashier speed *Customer impatient *Bar-code system failure *customer complaints *Deficiencies in human resource policies *Customers run away such as recruitment. Table 2. *Adverse goodwill of store customers items.