Designing the service process

Achinta Sarmah, Member of Faculty, IIM Shillong

Service processes are where the operations and customer perspective meet.
Types of service process

Service processes are not one size fit all purpose.

Mechanisms to differentiate service processes are

 Service volume
 Degree of customer involvement
Service volume

From an operations perspective, we are less concerned with the

technicality of the process and more concerned with the type of
process
 Service Variety (Based on Volume)
Variety Description
Runners Standard activities predominantly found in high-volume operations
• Often relatively predictable, allowing the operations manager to match resources to forecast demand with
reasonable accuracy.
• Lend themselves to efficient operations through tight process control or automation.
Repeaters Standard activities, possibly more complex than runners, but which occur less frequently
• May be created by default rather than by design, when an organization significantly expands the range of
services it offers.
• Often absorb more resource than an equivalent runner because lower volumes cannot justify process
automation.
• Some degree of relearning or readjustment of a process required for each reoccurrence of the repeater
activity if the previous occurrence was some time in the past.
Strangers Are non-standard activities, perhaps associated with a one-off project or activity
• Least efficient and most difficult to for operations management.
• It may be more difficult to forecast demand.
• The resources required to deal with demand may be less certain.
• They are least-well-defined in terms of resource requirements.
 Service Variety

Service Runners Repeaters Strangers

Vehicle service Standard oil change and Maintenance,
Gearbox repair
Replacement of brake pads, etc
International airline Passenger check-in, Baggage handling,
In-flight service Maintenance,
Scheduling
Hospital Patient records, Standard operations,
Recovery and rehabilitation Domestic
services
Body panel replacement Intermittent electrical fault
Product recall
Aircraft overdue or replacement Special charter for VIPs
required
‘Serious’ customer complaints
Surgery with ‘complications’ New surgical procedures
Dealing with difficult or
distraught patients and
relatives
 Volume-Variety Mix
Decreasing unit costs

Budget hotel
Luxury Hotel, High chain,
Capability Complexity
Corporate processes processes Insurance
lawyer provider

M
an
y
pr
o
ce com
ss m
es o
Increasing

l i e d i ty
process

c lo s p
se ec
Process variety definition

to tru
th m
is
ca
ab p
i
li t
y–
Incubator Simplicity Commodity Internet
processes processes Banking
Low

Low High
Process volume
 Customer Intimacy
Key Decision Area Matrix (KDAM)
Service projects Service partnerships

Low
Strangers/
repeaters
Back office Front office Back office Front office
Customer Customer

Volume of
transactions
DIY service
Service factory

Runners/
repeaters

High

Back office Front office Back office Front office

Customer Customer

Low High

Degree of direct customer involvement with the process

 9 Customer involvement type examples

Types Example
Service factory Most retail operations; Many Financial services
DIY services Leisure industry; Tourism; Sports and fitness clubs
Service projects Market research company
Service partnerships Strategy development consultancy to management team
Mix of four types BANK
Service factory retail banking

DIY services internet and telephone banking

Service projects business loans for entrepreneurs
Service partnerships managing investment portfolios for large corporate clients
 10
Changing tasks/focus in Customer involvement -
Example thereof
Example industry Situation
Insurance firm under increasing pressure to
demonstrate value and to deliver
cost reductions, moving from a
service partnership approach to a
service project environment.
Retailer moving from a high-street
presence to becoming an
exclusively online retailer
Change effected in customer involvement
Service partnership ->Service projects
• time spent with individual clients was becoming less
effective and contributed to the retention of an ever-
decreasing number of clients.
• Major culture change to reduce the time spent with
clients, and to develop standard ways of working.
• It also required a significant investment in
information systems to support this change.
Service factory ->DIY service
• Shift from back office functions like purchasing and
logistics to delivery systems
• Greater sophistication of customers
Engineering/Developing service process

 Continuous (Kaizen)
 Cooperation and Commitment
 Small ongoing positive changes can reap significant improvements

 Phased
 Process mapping:- Mapping the ‘as-is’ process
 Lean thinking:- Zero or minimal waste generated
 Six Sigma: Use of statistics and data analysis to reduce errors or defects
12 Process mapping example – ‘enquiry-to-delivery’
process of a stage light hiring company

Customers’ calls are routed to the store technician. After discussing their requirements, the technician checks the
equipment availability file to see if the equipment can be supplied from the company’s own stock on the required
dates. If the equipment cannot be supplied in-house, customers may be asked whether they want the company to
try to obtain it from other possible suppliers. This offer depends on how busy and how helpful individual
technicians are. Sometimes customers decline the offer and a ‘Guide to Customers’ leaflet is sent to the customer.
If the customer does want a search, the technician will call potential suppliers in an attempt to find available
equipment. If this is not successful the customer is informed, but if suitable equipment is located it is reserved for
delivery to the company’s site. If equipment can be supplied from the company’s own stores, it is reserved on the
equipment availability file and the day before it is required a ‘kit wagon’ is taken to the store where all the
required equipment is assembled, taken back to the workshop and checked, and if any equipment is faulty it is
repaired at this point. After that, it is packed in special cases and delivered to the customer.
13 Process map – Process map for ‘enquire-to-
delivery’ process at stage lighting operation
Supplier
Send
customer Call customer Suppliers
guide equipment to
store

N N

Customer Y Y Confirm to Stored

wants search Search Find supplier ? supplier equip.
?

Customer Check Supply from Y Reserve on

availability file Kit wagon to Assemble kit
request availability file stock ?
store

Pack for N Check

Deliver to Kit to workshop
delivery Needs attention ? equipment
customer

Y
Meaning of symbols

Repair
Task or activity Decision point

Movement (information, people or materials)

Queue of people or inventory of materials

Check, examination or inspection

14 The ‘collect and check’ process mapped to
show different levels of process visibility
Check it Call Very high
Agree report customer to
worked ok Worked ok? agree terms visibility
N
Y Line of interaction

Take out High

equipment visibility

Medium
To site To base visibility

Line of visibility

Amend Back office –

Prepare usage
report records low visibility

N
Check and
clean Did it Equipment
equipment work ok? Y to store
Analysing a Process Map

Process demand and operating characteristics

 ‘Cycle Time’: It is the time between completed items or customers emerging from it. How
ever the process is designed, it must meet this figure

 ‘Output Interval’: OR

 ‘Work content’: Time required by the process

Analysing a Process Map
Process bottlenecks
 It is a sub-activity or stage in the process where congestion occurs because the
workload placed in greater than the capacity to cope with it.

Detecting bottlenecks
 Look where they should be and where they appear to be

Curing bottleneck
 Improve the effective capacity of the bottleneck stage (This may not be best long-tern
solutions, as it may lead to overloading)
 It also misses out the opportunity to learn why overloading is happening
 Reduce the loading on the stage by increasing efficiency at the bottleneck.