Professional Documents
Culture Documents
New Service Development - Design
New Service Development - Design
A B
C D
16% 84%
3-9
Challenges for Service Innovation
• Ability to protect intellectual and property
technologies
• Incremental nature of innovation
• Degree of integration required
• Ability to build prototypes or conduct tests in
a controlled environment
3-10
Levels of Service Innovation
Radical Innovations
• Major Innovation: new service that customers
did not know they needed.
3-11
• Start-up Business: new • New Services for the
service for underserved Market Presently
market. Served: new services to
customers of an
organization.
Incremental Innovations
• Service Line Extensions: augmentation of
existing service line (e.g. new menu items).
• Service Improvements: • Style Changes: modest
changes in service visible changes in
delivery process (e.g. appearances.
self-service airline
boarding kiosk).
New Service Development Cycle
• Full-scale launch
• Post-launch review
l
of new services
nte na
Co izatio People
objective / strategy
xt
Tea
• Idea generation
• Service design
n
m
ga
and screening
and testing
s
Or
• Concept
• Process and system
development and
design and testing Product
• Marketing program testing
design and testing
• Personnel training Technology Systems
• Service testing and
pilot run
• Test marketing Tools
Design Analysis
• Business analysis
• Project authorization
3-15
Technology-Driven Service Innovations
Source of Service Example Service Industry Impact
Technology
Power/energy Jet aircraft International flight is feasible
Nuclear energy Less dependence on fossil fuel
Facility design Hotel atrium Feeling of grandeur/spaciousness
Enclosed sports stadium Year-around use
Materials Photochromic glass Energy conservation
Synthetic engine oil Fewer oil changes
Methods Just-in-time (JIT) Reduce supply-chain inventories
Six Sigma Institutionalize quality effort
Information E-commerce Increase market to world-wide
Satellite TV Alternative to cable TV
3-16
Adoption of New Technology
in Services
• Challenges of Adopting New Technology
– The Process is the Product
• Customers acceptance
– Loss of personal attention
– Learn new skills
– Forgo some benefits
• Internal customers (Front office)
– Retraining, (word processing vs typewriter)
• Back office
– Full benefits until standard accepted industry-wide
» So many browsers, security settings
3-17
• Readiness to Embrace New Technology
– Technology readiness
• Person’s propensity to embrace and use new
technology
– Evaluate customers’ level of readiness
• Airport check-in Kiosk
– Employee’s readiness
• Implementation of ERP
Service Design Elements
Design Elements Topics
Structural
Delivery system Process structure, service blueprint, strategic positioning
Facility design Servicescapes, architecture, process flows, layout
Location Geographic demand, site selection, location strategy
Capacity planning Strategic role, queuing models, planning criteria
Managerial
Information Technology, scalability, use of Internet
Quality Measurement, design quality, recovery, tools, six-sigma
Service encounter Encounter triad, culture, supply relationships, outsourcing
Managing capacity and Strategies, yield management, queue management
demand
3-19
Customer Value Equation
Value
Re sults Pr oduced Pr ocessQuali ty
Pr ice C ostsofAcqu iringtheSe rvice
3-20
Strategic Positioning
Through Process Structure
• Degree of Complexity:
– Measured by the number of steps in the service blueprint,
– e.g., a clinic is less complex than a general hospital
• Degree of Divergence:
– Amount of discretion permitted the server to customize
the service,
– e.g., the activities of an attorney contrasted with those of a
paralegal
3-21
Structural Alternatives
for a Restaurant
Limit to Four Choices Entree (6 choices) Expand to 10 Choices: Add Flaming Dishes;
Bone Fish at Table
Sundae Bar: Self-service Dessert (6 choices) Expand to 12 Choices
Coffee, Tea, Milk only Beverage (6 choices) Add Exotic Coffees; Wine list, Liqueurs
Serve Salad & Entree Together: SERVE ORDERS Separate-courses; Hand Grind Pepper
Bill and Beverage Together
Cash only: Pay when Leaving CASH OR CREDIT CARD Choice of Payment. Including House Accounts:
Serve Mints
3-22
Service Blueprint of Luxury Hotel
F F
3-30
Generic Approaches
to Service Design
• Production-line
• routine service
• control environment to ensure consistent quality & efficiency
• Customer as Coproducer
• encourage customers to take an active role
• Customer Contact
• Separation of High and Low Contact Operations
• low-contact to be designed as a technical core
• Information Empowerment
• IT is a fundamental part of our daily life
• IT can empower customer and employee
3-31
• Production-line approach
• Manufacturing systems are designed with control of
process
• Output is machine paced
• Jobs are designed with specific tasks to perform
• Tools and machines are provided to improve efficiency
– McDonald’s
• Hamburger patties are measured and prepackaged
• French fries …
– Limited discretionary action of personnel
• Employee is given well-defined task to perform with tool
to accomplish them
• Standardization & quality are the hallmarks
– Consistency in meeting specification
• Customer can expect the same level of service from all
franchises
– Division of labor
• Job can be broken down into groups of simple tasks
• Permit specialization of labor skills
• Low pay & low skill employment
– Substitution of technology for people
• ATM vs teller
• RFID vs Highway toll system
– Service standardization
• Limited menu items guarantees a fast hamburger
• Routine process, well-defined tasks, easy to control
• Customers as coproducer
• Customer present in the service process can support
the competitive strategy of cost leadership with
possible customization
• Beta version of software development
• Productivity gains are achieved by division of labor
– Self service
• Low cost airlines
– Automatic check-in kiosk, sell e-ticket over the Internet
• Customer controlled quality, e.g. Salad bar.
– Smoothing service demand
– Service capacity is a time-perishable commodity
– Whenever server is idle, service capacity is permanent loss
– The nature of demand of a service is clearly RANDOM
» The hour of the day
» The day of the week
» The season of the year
• Smoothing demand will improve service productivity
– Adjust service demand to match availability of service
» Appointment & reservation
• Customers can avoid of waiting
» Incentive to promote off-peak hours
– If attempt to smooth demand fail
» Initiate queue management
• Great utilization of service
• Customer’s frustration or
• Disney’s FastPass create more sale opportunity
– Customer-generated content
• The Internet has opened a new opportunity for
customer coproduction
– Wikipedia
– Social media
• Customer contact approach
• Manufacturing
– use inventory to decouple customer demand to achieve
efficiency
– use JIT to meet variation of demand and lower inventory
• Service delivery separate high- and low-contacts
operation
– Give customers a personalization feel
– Reach efficiency for back office operation
– Degree of customer contact
• Service quality is perceived by the customer
experiences
• Lower the percentage of the physical presence of the
customer in the system
– 網路選課
– DIY option
– Separation of high- and low-contact operations
• High-contact operations require employee with
excellent interpersonal skills
• Low-contact operations separate from customers
physically
• Airlines
– Reservation staff and attendants
» Wear uniform and receive training
– Baggage handlers and aircraft maintenance
» Hardly seen by customers
– Sales opportunity and service delivery options
• Information empowerment
– IT touch our life in all areas.
– Service could not survive without use of IT
• More than a convenient way
• Empower both employees and customers
– Employee empowerment
• Files age
– Customer order files
– Suppliers files
– Inventory files
– Interact WITHIN functional boundaries