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• Describe a service process using the dimensions of divergence and complexity. . • Discuss the managerial issues associated with the adoption of new technology.Learning Objectives • Discuss the new service development process. • Place an example of service automation in it proper category. • Compare and contrast the generic approaches to service system design. • Use the taxonomy of service processes to classify a service operation. • Prepare a blueprint for a service operation.
New Service Development Cycle • Full-scale launch • Post-launch review Full Launch Or ga n Co izatio nte na l xt Enablers Development • Formulation of new services objective / strategy • Idea generation and screening • Concept development and testing am Te People s Product • Service design and testing • Process and system design and testing • Marketing program design and testing • Personnel training • Service testing and pilot run • Test marketing Technology Tools Systems Design Analysis • Business analysis • Project authorization .
Levels of Service Innovation Radical Innovations • Major Innovation: new service driven by information and computer based technology • Start-up Business: new service for existing market • New Services for the Market Presently Served: new services to customers of an organization Incremental Innovations • Service Line Extensions: augmentation of existing service line (e. new menu items) • Service Improvements: changes in features of currently offered service • Style Changes: modest visible changes in appearances .g.
Astroturf Methods .International flights with jet aircraft Physical design .E-commerce using the Internet .Technology Driven Service Innovation • • • • • Power/energy .JIT and TQM Information .Enclosed sports stadiums Materials .
autopilot Expert system (E) .answering machine Numerical controlled (N) .EFT .ATM Playback (P) .animation Intelligent (I) .parking lot gate Variable-sequence (V) .medical diagnosis Totally automated system (T) .Classification of Service Automation • • • • • • • Fixed-sequence (F) .
Adoption of New Technology in Services • Challenges of Adopting New Technology The Process is the Product Back Office vs Front Office Changes Need for Standardization • Managing the New Technology Adoption Process Ten step process with concern for employees and customers .
Service Blueprint of Luxury Hotel .
Could I get it customized merely by sharing plans? 1. pda. and work together – – Home: search. “Lean Consumption”. Solve the customer’s problem completely by ensuring that all the goods and services work. shopping.. – One stop for the really big problems: mobility. on-line. 1. shelter.Blending Blueprinting with Lean Womack and Jones. music. financial management. repair. big-box. Calculate total time and % value added. • Principles of Lean Consumption: 1. upgrade Cell phone: calling. Don’t waste the customer’s time – – – – – Provide exactly what the customer wants Provide what’s wanted exactly where it’s wanted Provide what’s wanted where it’s wanted exactly when it’s wanted Continually aggregate solutions to reduce the customer’s time and hassle. hot synch. phone… Sometimes this may be some time off. and wasted time for customer and provider. 1. find. local. . 1. 1. purchase. HBR March 2005. downloads. communications. health care. maintain. pictures. internet… Enhanced blueprint: add value-creating. Prevent stockouts from long supply chains Nike’s custom bags from NuSewCo in San Francisco Offer services through all desired channels.
. For example the activities of an attorney contrasted with those of a paralegal.Strategic Positioning Through Process Structure • Degree of Complexity: Measured by the number of steps in the service blueprint. For example a clinic is less complex than a general hospital. • Degree of Divergence: Amount of discretion permitted the server to customize the service.
Taken Personally by Maltre d’ Individually Prepared at table Expand to 20 Choices: Add Flaming Dishes. Menu on Blackboard Eliminate Customer Fills Out Form Pre-prepared: No Choice Limit to Four Choices Sundae Bar: Self-service Coffee. GIVE MENUS SERVE WATER AND BREAD TAKE ORDERS PREPARE ORDERS Salad (4 choices) Entree (15 choices) Dessert (6 choices) Beverage (6 choices) SERVE ORDERS COLLECT PAYMENT HIGHER COMPLEXITY/DIVERGENCE Specific Table Selection Recite Menu: Describe Entrees & Specials Assortment of Hot Breads and Hors D’oeuvres At table. Hand Grind Pepper Choice of Payment. Prepare Sauces at Table Expand to 12 Choices Add Exotic Coffees. Including House Accounts: Serve Mints . Milk only Serve Salad & Entree Together: Bill and Beverage Together Cash only: Pay when Leaving CURRENT PROCESS TAKE RESERVATION SEAT GUESTS. Tea. Bone Fish at Table. Sherbet between Courses.Structural Alternatives for a Restaurant LOWER COMPLEXITY/DIVERGENCE No Reservations Self-seating.
automatic bank made furniture teller Taking pictures in a photo booth Food serving in Giving a lecture a restaurant Handling routine Car washing bank transactions Operating an elevator Riding an escalator Sampling food at Documenting a buffet dinner medical history at a clinic Bagging of groceries Searching for information in a library Home carpet cleaning Landscaping service Driving a rental car Using a health club facility Customerservice worker interaction Providing public transportation Providing mass vaccination Portrait painting Haircutting Counseling Performing a surgical operation .Taxonomy of Service Processes Degree of Customer Contact Low Divergence (Standardized Service) Processing of Goods Processing of Information or Images Processing of People High Divergence (Customized Service) Processing of Goods Processing of Information or Images Computer programming Designing a building Supervision of a landing by an air controller Bidding at a TV auction Processing of People No Customer Contact Dry cleaning Check processing Restocking a vending machine Billing for a credit card Ordering groceries from a home computer Phone-based account balance verification Auto repair Tailoring a suit Indirect Customer Contact Direct Customer Contact No customerservice worker interaction (selfservice) Operating a Withdrawing vending machine cash from an Assembling pre.
Generic Approaches to Service Design • Production-line • Limit Discretion of Personnel • Division of Labor • Substitute Technology for People • Standardize the Service Customer as Coproducer • Substitution of Customer Labor for Provider • Smoothing Service Demand Customer Contact • Degree of Customer Contact • Separation of High and Low Contact Operations Information Empowerment • Employee and Customer • • • .
.Discussion Questions • What ethical issues are raised in the promotion of sales during a service transaction? • What are some drawbacks of customer participation in the service delivery process? • What are the limits in the production-line approach to service? • Give an example of a service in which isolation of the technical core would be inappropriate.
6 calculate a break-even price per shirt if monthly demand is expected to be 20.000 shirts and the contract with a cleaning plant stipulates a charge of $0. .Commuter Cleaning . 4.New Venture Proposal 1. 2. and make recommendations for improvement. Prepare a service blueprint for Commuter Cleaning.50 per shirt. 3. and what competitive advantage does this offer? Using the data in Table 4. What generic approach to service design is illustrated by Commuter Cleaning. Critique the business concept.
100 Yen Sushi House Questions • Prepare a service blueprint for the 100 Yen Sushi House • What features differentiate 100 Yen Sushi House and how do they create a competitive advantage? • How has the 100 Yen Sushi House incorporated the just-in-time system into its operations? • Suggest other services that could adopt the 100 Yen Sushi House service delivery concept. .
100 Yen Sushi House Layout Dishwashing Counter in Back CONVERSATION AREA Miso and Tea Station CONVEYOR BELT CONVERSATION AREA TAKE-OUT POSITION ENTRANCE = CHEF .
100 Yen Sushi House Service Package • Supporting Facility • Facilitating Goods • Information • Explicit Service • Implicit Service .
INTERACTIVE CLASS EXERCISE The class breaks into small groups and prepares a service blueprint for Village Volvo. .
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