Unit 3

SERVICE OPERATIONS MANAGEMENT

Definitions and Perspectives of Services

 Services are deeds, processes, and performances. - (Zeithaml and Bitner)

 A service is a time-perishable, intangible experience performed for a customer

acting in the role of co-producer. - (Fitzsimmons)

 Any act or performance that one party can offer to another that is essentially
intangible and does not result in ownership of anything. Its production may
or may not be tied to physical product. – (Kotler)
Examples
 A crèche service facility takes care of baby and saves parents Time
 Buying grocery or household items in one convenient Place that is
supermarket or big malls
 A database service provider providing information in a Form to
insurance manager for easy usage
 Going for a movie or theater for Psychological refreshment
Role of Customers
 Service is a process or a set of activities in which a customer interacts with
service provider to produce intangible experiences as an outcome. Service can
be provided as a combination of tangible good and intangible experience.

 Customer’s inputs and mostly physical presence are important to initiate the
service. In some self-services, customer acts as co-producer of service.

 The simultaneous activities, customer request and service delivery, leads to the
perishable characteristic of services. A service process is shown in Figure 1.
Figure 1: service process
Customer Contact Model
Service Mapping/Blueprinting

A tool for simultaneously depicting the service process, the points of customer
contact, and the evidence of service from the customer’s point of view.

Process

Service Points of Contact

Mapping
Evidence
Service Blueprint for a coffee Shop
Application of Service Blueprints

 New Service Development

 concept development
 market testing

 Supporting a “Zero Defects” Culture

 managing reliability
 identifying empowerment issues

 Service Recovery Strategies

 identifying service problems
 conducting root cause analysis
 modifying processes
Service Blueprint Components

CUSTOMER ACTIONS

line of interaction

“ONSTAGE” CONTACT EMPLOYEE ACTIONS

line of visibility

“BACKSTAGE” CONTACT EMPLOYEE ACTIONS

line of internal interaction

SUPPORT PROCESSES
Service Blueprint Components
Overnight Hotel Stay

Bill

EVIDENCE
CUSTOMER PHYSICAL
Desk
Hotel Cart for Desk Elevators Cart for Room Menu Delivery Food Lobby
Exterior Bags Registration Hallways Bags Amenities Tray Hotel
Parking Papers Room Bath Food Exterior
Lobby Appearance Parking
Key
Arrive Give Bags Call Check out
Go to Receive Sleep Receive
at to Check in Room Eat and
Room Bags Shower Food
Hotel Bellperson Service Leave
Stage)
CONTACT PERSON

Greet and
Process Deliver Deliver Process
Take
Registration Bags Food Check Out
(On

Bags
(Back Stage)

Take
Take Bags Food
to Room Order
SUPPORT PROCESS

Registration Prepare Registration

System Food System
Building a Service Blueprint

Step 1 Step 2 Step 3 Step 4 Step 5 Step 6

Identify the Identify the Map the Map Link Add

process to customer or process contact customer evidence of
be blue- customer from the employee and contact service at
printed. segment. customer’s actions, person each
point of onstage activities to customer
view. and back- needed action step.
stage. support
functions.
 Blueprints Can Be Used By:

Service Marketers Human Resources

creating realistic customer expectations empowering the human element
service system design job descriptions
promotion
selection criteria
appraisal systems
Operations Management System Technology
rendering the service as promised providing necessary tools:
managing fail points system specifications
training systems personal preference databases
quality control
Service Capacity

Ability of a service system to deliver the intended service and

to match customer demand.

Capacity of a service is also attributed to the highest possible

amount of output that may be obtained in a specified period of
time with a predefined level of staff, installations and
equipment (Lovelock).
Examples:
1.The capacity of a hospital can be measured in terms of number of beds.
2.The capacity of supermarket can be measured in the square meter area utilized.
3.The performance measures of a call center can be percentage of abandoned calls or increase in answered calls.
TABLE 1: DIFFERENT PERSPECTIVES ON SERVICE CAPACITY MEASURES

Customers' perspective Managers' perspective

Availability: Right time, Right Revenue or profits

price, Right type

Crowding and spacing: Too many Variable and physical resources

people/very less space, Few
space/ too much space

Intimacy/privacy
Interaction/sociability
Perceived service time
Perceived wait time
Utilization
Percentage of depletion
Actual service time
Actual waiting time
Number of visitors
Elements of Service Capacity

FIGURE 2: ELEMENTS OF SERVICE CAPACITY

Strategies for Managing Service Capacity

Work force related changes in service capacity

Increasing customer participation
Automate the service
Renting or sharing equipment / resources
Adjustable and sharing capacity
Concept of Quality in Service
Determinants of Perceived Service Quality

Word of Personal Past

Mouth Needs Experience

External
Expected Communication
Service to Customers
Service
Quality Perceived
Gap Service
Quality
Perceived
Service
 A “GAPS” MODEL OF SERVICE QUALITY

CUSTOMER SERVICE ORGANIZATION

Market Organization’s Service

Information Gap Understanding of Standards Gap
Customers’ Expectations
Service
Expectations Organization’s Service
GAP 1 Standards
GAP 2
Service Service
Quality Gap GAP 5 Performance Gap
GAP 3
GAP 4 Organization’s Service
Customers’ Performance
Service
Perceptions
Organization’s Internal
Communications to Communication
Customers Gap
POTENTIAL CAUSES OF INTERNAL SERVICE GAPS
GAP 1

Customer
Expectations

Key Factors:
• Insufficient marketing research
• Inadequate use of marketing research
• Lack of interaction between
management and customers
• Insufficient communication between
contact employees and managers

Lack of
Management “Upward
Perceptions of Communication”
Customer Expectations
 GAP 2

Management
Perceptions of
Customer Expectations

Key Factors:
• Inadequate management commitment
to service quality
• Absence of formal process for setting
service quality goals
• Inadequate standardization of tasks
• Perception of infeasibility -- that
customer expectations cannot be met

Service
Quality
Specifications
 GAP 3

Service
Quality
Specifications

Key Factors:
• Lack of teamwork
• Poor employee - job fit
• Poor technology - job fit
• Lack of perceived control (contact personnel)
• Inappropriate evaluation/compensation system
• Role conflict among contact employees
• Role ambiguity among contact employees

Service
Delivery
 GAP 4

Service
Delivery

Key Factors:
• Inadequate communication between
salespeople and operations
• Inadequate communication between
advertising and operations
• Differences in policies and procedures
across branches or departments
• Puffery in advertising & personal selling
Lack of
“Horizontal
External
Communication”
Communications
to Customers
Suggestions for Closing the Market Information Gap

 Conduct systematic marketing research

 Make senior managers interact with customers

 Make senior managers occasionally perform customer-contact roles

 Encourage upward communication from customer-contact employees

Suggestions for Closing the Service Standards Gap

 Make a blueprint of the service and standardize as many components of it

as possible

 Institute a formal, ongoing process for setting service specifications

 Eliminate “perception of infeasibility” on the part of senior managers

 Make a true commitment to improving service quality

Suggestions for Closing the Service Performance Gap

 Invest in ongoing employee training

 Support employees with appropriate technology and information systems

 Give customer-contact employees sufficient flexibility

 Reduce role conflict and role ambiguity among customer-contact employees

 Recognize and reward employees who deliver superior service

Suggestions for Closing the Internal Communication Gap

 Facilitate effective horizontal communication across functional areas (e.g.,

marketing and operations)

 Have consistent customer-related policies and procedures across branches

or departments

 Resist the temptation to promise more than the organization can deliver