Management control of service operations

Prof. PUTTU GURU PRASAD FACULTY MEMBER INC GUNTUR pgp4149@gmail.com

Characteristics of services
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Intangibility:- in Mc Donald's, quality of service is intangibility Heterogeneity:- the experience in each outlet may differ depending on the service personnel, time taken for delivery, mix of customers etc., Inseparability:-the service cannot be separated from the source that provides it (a patient who wants to have a tooth extracted will have to go to the dentist to avail the service) Perishability:- the vacant seats on a flight will be of no use once the flight takes off.

Generic techniques for control of services
Service blue print s Capacity management s Queuing theory s Yield management s Service quality management s Six sigma s Service recovery
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Service Blue Print
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A service blue print is a map or a diagrammatic representation of different levels of interaction between the customer and the service provider. It is a detailed representation of the service delivery process, the associated physical evidence, and the employees involved in the service delivery process

Queuing theory
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The theory enables mathematical analysis of several queue related processes, including arriving at the queue, waiting in the queue, and being served by the server at the front of the queue. It can be applied at bill payment counters in retail shops, telephone exchanges, banks, rail way stations, etc.

Yield management
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Yield management systems are used by airlines to predict the demand for each fare class for a specific flight. This can be achieved by collecting data on the booking and cancellation trends on similar flights for a period of 12 to 18 months. It helps in increasing profits by applying the peak load pricing policy, categorizing customers based on their price consciousness, and by applying seat inventory control to handle the fluctuations in demand

Capacity management
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In service sector, managing demand and supply become a crucial factor. This is particularly true in professional services, rail travel ,hotel industry, air travel industry, hospitals etc., as the capacity once lost cannot be reused and it is this capacity that forms a major component of the profits that accrue.

Service recovery
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Eight different reasons relating to service failure on the part of service firm that cause customers to switch to other service providers. They are Core service failures Service encounter failures Price failures Inconvenience Employee response Attraction by competitors Ethical problems Involuntary switching

Service quality determinants
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Reliability Responsiveness Competence Access Credibility Courtesy Communication Security Knowing the customer tangibles

Six sigma in Bank of America
As a core process performance metric s As a business approach s As a leadership philosophy. s Six sigma is a strong business strategy which helps in increasing the effectiveness and efficiency of services by minimizing the defects, errors, and flaws in their porcesses.
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Classification of service organizations Equipment focus/people focus s Production focus/ process focus s Back office focus/ front office focus s Level of customization s Duration of customer contract s Level of discretion
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Six dimensions of service org
Equipment focus:-in this the tool or machine used for delivering the service is important; s people focus:- in this the organization's representatives who deliver the service are more important than the tool or machine
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Six dimensions of service org
Product focus:- it deals with what the customer purchases; s Process focus:- it deals with how the purchase is affected s Back office focus/ front office focus:- the major part of value addition in the service may happen either in the front office or in the back office
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Six dimensions of service org
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Level of customization:- this deals with the extent to which the service caters to individual customer’s need or whether the service is standardized. Duration of customer contact:- this is the amount of time a customer spends in a service system. Level of discretion:- this empowers the service providing personnel to make change to the service with out consulting with higher authorities

Schmenner’s matrix
Relative through Put time Degree of variation low high Service low factory
Fast food restaurants Mass service Low cost airlines

Service shop
Traditional restaurants hospitals

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Retail banking schools

Processional service
Gourmet restaurants Consulting firms

Categories of services organizations
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Service factory - fast food restaurants - low cost air lines Service shop - traditional restaurants - hospitals Mass service - retail banking - schools Professional service - gourmet restaurants - consulting firms

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