Chapter 8

Designing
Quality Services
Chapter Objectives
1. Discuss how services are categorized and what implications those
categorizations have for quality.
2. Discuss the dimensions of service quality to better define customer
needs.
3. Perform SERVQUAL analysis, including two-dimensional differencing.
4. Perform services blueprinting.
5. Brainstorm ways to failsafe service processes.
6. Define a services benefits package for a firm.
7. Perform service transaction analysis.

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Differences between Services and
Manufacturing
• Many service attributes are intangible.
• The outputs of services are heterogeneous.
• Production and consumption of services often occurs
simultaneously.
• Customers are more involved in the production of services.
• Customers are often coproducers in services.
• Service times vary widely due to varying demands.
• Service customers can exert control over the service provider and
achieve customization.
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Differences between Services and
Manufacturing
• External services (customers pay the bills)

• Internal services (in-house services such as data processing,

printing, and mail)

• Voluntary services (gas station, a restaurant)

• Involuntary services (prison, hospital)

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Differences between Services and
Manufacturing
• How are service quality issues different from manufacturing?
• It can be difficult to obtain hard data.
• You have to do it right the first time because you cannot inspect and rework
defects.
• There is significantly more variability due to customization.
• Service design differs.
• Warranty and repair processes are not as important.
• Liability centers around safety concerns (malpractice).
• How are service quality issues similar to manufacturing?
• The customer is the core of the business.
• Customer needs provide the major input to change.
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What Do Service Customers Want?
Key aspects of a leader in services:

• Service vision

• High standards

• In-the-field leadership style (e.g. Mohamed Alabbar)

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SERVQUAL
Advantages of SERVQUAL instrument:
• It is accepted as a standard for assessing different dimensions of
services quality.
• It has been shown to be valid for a number of service situations.
• It has been demonstrated to be reliable, meaning that different
readers interpret the questions similarly.
• Each instrument is parsimonious in that it has only 22 items. This
means that it can be filled out quickly by customers and employees.
• Finally, it has a standardized analysis procedure to aid both
interpretation and results.

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SERVQUAL
SERVQUAL survey:

• Customer expectations
‫توقعاتي للمنتج‬
• 22 items

• Customer perceptions‫اذا وصلني‬

‫المنتج كيف شعوري تجاه‬ Table 8-2
• 22 items

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SERVQUAL
Gap analysis:
• Because services are often intangible,
gaps in communication and
understanding between employees and
customers have a serious negative
effect on the perceptions of services
quality.

• The key to closing gap 5 is to first close

gaps 1 through 4 through system
design, communication, and workforce
training.

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Figure 8-3
8-10
SERVQUAL
Gap 1:
• It shows that there can be a
difference between actual
customer expectations and
management’s ideas or
perceptions of customer
expectations.
Figure 8-3

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SERVQUAL
Gap 2:
• Managers’ expectations of
service quality may not
match service quality
specifications.

Figure 8-3

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SERVQUAL
Gap 3:
• After services
specifications have been
established, the delivery
of perfect services quality
is still not guaranteed.

Figure 8-3

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SERVQUAL
Gap 4:
• There may be
differences between
services delivery and
external communications
with the customer.

Figure 8-3

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SERVQUAL
Gap 5:
• There may be differences
between perceived and
expected services.

Figure 8-3

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Assessing Differences in Expectations by
Using the Differencing Technique skip to 19
Steps:
1. Administer the expectations and perceptions
SERVQUAL instruments to your customers.
• Typically need a sample size of between 50-100
2. Compute a difference score for SERVQUAL by
separating the dimensions as follows (see
table).
3. For each respondent, sum the SERVQUAL
scores for each set of items relating to a
given dimension.
4. Sum across the n respondents and divide by
the total n.

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Two-Dimensional Differencing
• The two-dimensional differencing technique is very useful
for evaluating SERVQUAL responses if there is enough
variation in the responses given to different dimensions.

• The two-dimensional differencing technique allows the firm

to determine which services it should emphasize to
improve customer perceptions and those that make little
difference.

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Example 6-2
Using data from
Example 8.1:
• The vertical axis reflects
the expectations score.
• The horizontal axis
relates to the
perceptions score.
• The value 4 (the neutral
response) is used as the
origin.

Figure 8-4
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Designing and Improving the Services
Transaction
• Services blueprinting

• Moments-of-truth concept

• Poka-yoke

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Services Blueprinting
Four steps to developing a services blueprint:
1. Identify processes.

2. Isolate fail points.

3. Establish a time frame.
4. Analyze profits.

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Services Blueprinting in a Hair Salon

Figure 8-5
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Moments of Truth concepts
• Fail points in the services blueprints or the times at which
the customer expects something to happen
• when the customer expects something to happen, it has to
happen. It is that simple!

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Poka-yoke skip
• A fail-safing device

• Classifications for fail-safing devices in services:

• Warning methods
• Physical contact methods
• Visual contact methods
• Fail-safe methods can also be defined by the “three Ts”

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The Three “Ts” of Poka-yokes skip

• Tasks to be performed

• Treatment provided to customer

• Tangibles provided to customer

• ATM machines that warn you to remove your card, toilets
and sinks that; automatically flush and shut off, a USB drive
upside-down in a computer

Figure 8-6

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The Customer Benefits Package
Consists of both tangibles that define the service and
intangibles that make up the service (Free internet; toy with
mail)

• Tangibles = goods-content

• Intangibles = service-content

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The Customer Benefits Package
Four stages of the service
benefit package design
process:
• Idea/concept generation
• The definition of a services
package
• Process definition and selection
• Facilities requirement definition

Figure 8-7
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Services Process Structure skip to 31

Based on D. Kellogg and W. Nie, “A Framework for Strategic Service Management,” Journal of Operations Management 13, 4 (1995): 323–327 .

Figure 8-8
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Service Transaction Analysis Sheet
• A tool used in STA
• Mystery shoppers or
independent consultant-
customers walk through the
process and then rate each
transaction

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Why the Government is Adopting Quality
Techniques
• People want and desire to do good quality work.
• Because quality management is associated with improved employee
satisfaction, there is a major impetus to improve.
• Government leaders are mandating standards, strategic plans, and new
levels of performance at all levels of government. These standards are
being adopted in government agencies because of the mandates.
• Demand for government services is growing at a faster rate than
funding for them. The natural reaction is to simplify processes that have
become bloated.
• Finally, the threat of privatization in government has led to an
improvement in service in many areas.
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Supply Chain Quality in Services

Bidirectional Services Supply Chain

S. E. Sampson, “A Customer-Supplier Paradigm for Service Science,” in (refereed) Proceedings of the DSI Services Science
Miniconference, Pittsburgh, PA, May 2007.Copyright © 2007 by Scott E. Sampson. Reprinted by permission.

Figure 8-10

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