MSO4- Service Design

Dr Prashant Gupta
 Characteristics Of Services
1. Intangible
2. Variable Output
3. High Customer Contact
4. Perishable
5. Service Inseparable from Delivery
6. Decentralized
7. Consumed more often
8. Easily Emulated (imitated)
 Service Generalizations
1. Everyone is an expert on services.

2. Services are idiosyncratic (peculiar to a person).

3. Quality of work is not necessarily quality of service.

4. Most services contain a mix of tangible and

intangible attributes.

5. High-contact services are experienced, whereas goods are consumed.

6. Effective management of services requires an understanding of ‘marketing’ and
‘human resources’, as well as ‘operations’.
7. Services often take the form of cycles of encounters involving face-to-face, phone,
internet, electromechanical, and/or mail interactions.
 Internal Services

• Internal Services are the management of services required to support

the activities of the larger organization.
e.g. Data Processing, Accounting, Engineering, Maintenance etc.
 Service Businesses based on
Location
• Facilities-based Services :Customers must go to the place
of business.

• Field-based Services :Production and consumption take

place in the customer’s environment.
 CLASSIFICATION OF SERVICES
Nature of Service Services directed at Services directed at Things
Action People (Possessions)

Tangible Actions PEOPLE’S BODIES : GOODS AND PHYSICAL POSSESSIONS :

Health care Freight transportation
Passenger transportation Equipment Repair & Maintenance
Beauty salons Janitorial Services
Restaurants, Haircutting Laundry & Dry- Cleaning
Horticulture
Veterinary Care

Intangible Actions PEOPLE’S MINDS : INTANGIBLE ASSETS :

Education Banking
Broadcasting Legal services
Information services Accounting
Theatres Securities
Museums Insurance
 Best Practices emphasized by Service
Executives for Service Organizations
Items most Emphasized Item Mean
Accessibility 4.02
Openness to employees 3.91
Leadership 3.87
Listening to the customer 3.82
Service Tangibles 3.79
Employee handling of service failures 3.79
Competitive positioning 3.72
Quality Values 3.68
Consistently meeting customers’ needs 3.68
Customer orientation 3.66
Management involvement in quality 3.66
 Service Design Process
• Service Concept
The service concept provides a linkage mechanism
- between strategic intent and its impact on the customer, and -
between what a service operations design wants to do and how it
can do it

• Service Package

• Service Specifications
 Service Concept
From …
What the operation wants to do

Perspective
From … The service To …
Customer Perspective
Strategic intent concept Impact on customer

Operations
To …
How the operation can do it
 Service Design Process
• Service Concept
• Purpose of a Service
• Target Market / Customer
• Customer Experience

• Service Package
• Physical Items
• Sensual Benefits
• Psychological Benefits

• Service Specifications
• Performance Specifications
• Design Specifications
• Delivery Specifications
 Service Triangle

Service
Strategy

Customer

Service Service
Systems People
 Service Strategy - Operating Focus
(Performance Priorities)
• Price of the Service
• Quality of tangible goods that are central to or accompany the service
• Speed and Convenience of service delivery
• Variety (Flexibility) of services (one stop shopping philosophy)
• Dependability:
- Treatment of the customer in terms of friendliness and
helpfulness
- Unique skills that constitute the service offering
Structuring the Service Encounter: Service-
System Design Matrix
• Service encounters can be configured in a number of different
ways:
• Mail Contact
• Internet and On-site Technology
• Phone Contact
• Face-to-face with Tight Specifications
• Face-to-face with Loose Specifications
• Face-to-face Total Customization

• Production efficiency decreases with more customer contact.

• Low contact allows the system to work more efficiently.
 Service-System Design Matrix
Degree of Customer/Server Contact
Buffered Permeable Reactive
High Core (none) System (some) System (much) Low
Face-to-face
Total
Customization
Face-to-face
Sales Face-to-face
Loose Specs
Production
Opportunity Phone
Tight Specs
Efficiency
Internet & Contact
on-site
Mail contact Technology

Low High
 High vs. Low Contact Services
Design Decision High-Contact Service Low-Contact Service
Facility Location Convenient to Customer Near Labor or Transportation Source
Facility Layout

Quality Control

Capacity
Worker Skills

Scheduling

Service Process

Service
Package
 High vs. Low Contact Services
Design Decision High-Contact Service Low-Contact Service
Facility Location Convenient to Customer Near Labor or Transportation Source
Facility Layout Must look presentable, accommodate customer Designed for efficiency
needs, and facilitate interaction with customer
Quality Control  More variable since customer is involved in Measured against established standards
process;
 Customer expectations and perceptions of quality Testing and rework possible to correct
may differ; defects
 Customer present when defects occur
Capacity Excess capacity required to handle peaks in demand Planned for average demand
Worker Skills Must be able to interact well with customers and use Technical Skills
judgment in decision making
Scheduling Must accommodate customer schedule Customer concerned only with completion
date
Service Process Mostly front-room activities;  Mostly back-room activities
 Service may change during delivery in response to  Planned and executed with minimal
customer
interference

Service Varies with customer; includes environment as well Fixed

Package as actual service  Less Extensive
 Three Contrasting Service Designs
• The Production Line Approach: McDonald

• The Self-Service Approach : Company Websites, Automatic Teller

Machines (ATMs), Self-service Gas Stations, Salad Bars, In-Room Coffee-
Making Equipment in Motels.

• The Personal Attention Approach : “Loose, unstructured

process relying on developing a relationship between the individual
salesperson and the customer”.
 Service Fail-safing
Poka-Yokes (A Proactive Approach)
• Preventing a mistake from
becoming a service defect.
Task

• How can we fail-safe the

three Ts?

Treatment Tangibles
 Poka-yokes (Avoid Mistakes)
Poka-yokes are procedures that prevent mistake from becoming a service
defect.
Classification of Poka-yokes :
- Warning Methods: Fixtures, Electronic Switches, Kitting of Components
of a Product
- Physical or Visual Contact Methods
Three Ts :
Task to be done ( Was the car fixed right ? )
Treatment accorded to customer ( Was the Service Manager courteous ? )
Tangible or Environmental Features ( Was the waiting area clean and
comfortable ? )
Have we Compromised on one of the 3 Ts?
 Characteristics of a Well-Designed Service System
1. Each element of the Service System is consistent with the
Operating Focus of the firm. E.g. Speed of Delivery

2. It is User-friendly. Easy interaction.

3. It is Robust. Cope with variation in demand and resource

availability.

4. It is structured so that Consistent Performance by its people

and systems is easily maintained.
Characteristics of a Well-Designed Service System
(Continued)
5. It provides effective Links between the back office and the front office so
that nothing falls between the cracks. “No fumbled hand-offs”.

6. It manages the Evidence of Service Quality in such a way that customers

see the value of the service provided. Customer should be made aware of
the improvement.

7. It is Cost-effective. Minimum waste of time and resources.

The Structure of a Typical Service Concept

Organisation – the organisation, or part of an organisation, responsible for the service

Organising idea – the essence of the service bought, or used, by the customer

Service concept (summary) – overview of what is to be delivered, to what standards, any key
resources used, relationships involved and service objectives, expressed in clear language that
can be shared

Service provided – the service process and its outputs, which have been designed,
created and enacted by the organisation using its many input resources, including the
customer

Service received

Customer experience – the Service outcomes – the results

Customer customer’s direct and personal
group 1 interpretation of, and response to,
their interaction with and
Customer
group 2 participation in the service
process and its outputs, involving
for the customer of the service
process and their experience
including ‘products’, benefits,
emotions, judgements and
intentions

Customer their journey through a series of

group n touch points/steps
Changing the Service Concept of a Museum of Geology

Old concept
New concept

EXPERIENCE

Single experience Multi-levelled experience

No frills Full service
Taxonomic displays Staged narrative
Minimalist service Support services
‘PRODUCTS’

Comprehensive collection ‘Star’ exhibits

In-depth study opportunity Education/indulging curiosity
Professional resource Entertainment

BENEFITS
Learning Enthusiasm for geology
Work support/scholarship Leisure

EMOTIONS
Serious Surprise

Source: Adapted from Clark, G., Johnston, R. and Shulver, M. (2000) ‘Exploring the service concept for service design and development’,
in J. Fitzsimmons and M. Fitzsimmons (eds) New Service Design, Sage publications, Thousand Oaks, California.