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SOM - Coggle Diagram
SOM
Chapter 1: Characteristics of Service
Customer Participation in the Service Process
Simultaneity
Perishability
Intangibility
Heterogeneity
The combination of the intangible nature of services and the customer as participant in the service delivery system results in variation of service from customer to customer
Chapter 4: Service Inventory
Types of Inventories
Cyclical Inventories: Refers to normal variations in inventory stock; Inventory is at highest after order is received, lowest before a new order is received
Safety Stocks:
Bought to hedge against supply uncertainty
Hedge against demand fluctuation
In-transit Inventories: Stock that has been ordered but not yet arrived
Characteristics of Inventory Systems: Used to determine how to manage an inventory system
Type of customer demand:
Trends, cycles
Slow moving or fast moving
Dependent or Independent demand
Planning time horizon
Is demand for a short while because of a craze or is it a regular product demanded by customers
Replenishment lead time:
Longer lead time would need higher volume of safety stock
Constraints and relevant costs:
Availability of Storage Space
Shelf life of product
Maintanance costs
Cost of Inventory
Holding or Carrying Costs: The more the stock, the higher the costs
Ordering Costs: Order Administration fees, transportation, inspection costs
Stockout:
Lost of sale and profits
Penalties for urgent delivery
Loss of potential business
Purchase Cost of Item (Bulk purchases are cheaper)
Calculation
Economic Order Quantity Model (Where total cost is minimized) : 1. Calculate cost 2. Calculate correct order quantity
TCp = S (D/Q) + H (Q/2)
TCp = Total Cost Purchase Lot/ Total Annual Inventory Cost/ Inventory Holding Cost Cost
S = Ordering Cost
D = Annual Demand
Q = Order Quantity
H = Average Holding Cost
Average Inventory = Q/2
Number of Orders/ Orders placed per year
= N
= Demand/ Order Quantity
= D/Q (to the nearest whole number
Expected Time between orders
= T
= Working days/N
d = D/working days
H = I x C
I = Annual Inventory Holding Cost expressed as % of cost of item
C = Unit Cost of product
ROP (Reorder Point; Tells when to order)
ROP = SS + dL
SS = Safety Stocks Level
dL = Demand during Replenishment Lead Time
= daily demand x replenishment lead time
= d x LT
= 1000/365 x 3
= 8.2
Chapter 5: Service Quality
5 Dimensions of Service Quality (RATER); Customers use dimensions to form judgments based on expected and perceived service through the 5 dimensions
Reliability: Ability to perform promised service dependably and accurately
Assurance: Ability to convey trust and confidence through competence
Tangibles: Appearance and Condition of physical facilities and goods
Empathy: Sensitivity and Effort to understand the customer's needs
Responsiveness: Willingness to help customers promptly
Service Quality Gap Model: Measures gap between "expected" and "perceived" service
Customer Expectations
Gap 1 (Understanding the customer) : Market Research Gap
Company does not understand customers' expectations, insufficient market research
Solution: Improve market research, foster better communication between management and employees
Management Perception of Customer Expectations
Gap 2: Service Design Gap
Company does not design its service to service standards
Solution: Set goals and standardise service delivery tasks
Service Standards
Gap 3: Conformance Gap
Actual Delivery of service does not meet management specifications
Solution: Teamwork, Employee training, better job design
Service Delivery
Gap 4: Communication Gap
Differences between delivery of service vs what is communicated to customers; overpromising
Solution: Training, Ensure communications and service quality is consistent
Customer Perceptions
Gap 5: Customer Satisfaction: Depends on how a company can minimize gaps 1-4
Cost of Quality for Services (Juran)
Cost Category: Detection
Costs incurred to keep track of service quality standards, and detect any errors
Regular Inspection of systems
Process Control
Collecting quality data
Checking, verifying
Cost Category: External Failure
Costs incurred to correct nonconforming work after delivery to customer
Payment of penalties
Investigation Time
Legal Judgements
Negative word-of-mouth
Loss of future business
Cost Category: Prevention
Costs of operations or activities that help keep failure from happening
Quality Planning
Recruitment and Selection
Training Programs
Quality Improvement Projects
Cost Category: Internal Failure
Costs incurred to correct non-conforming output/results before delivering to customer
Scrapped forms and reports
Rework
Machine Downtime
Statistical Process Chart: to determine if process is under control by the use of control limits
UCL = Upper Control Limit
LCL = Lower Control Limit (if LCL is negative, make it 0)
p = estimated error of population percentage
= sum of errors/ (no of samples x sample size)
n = sample size
Expected no. of error per n samples
= n x p
Should he be employed question:
Calculate p for each month
Plot results on control chart
Chapter 6: Managing Service Projects
Characteristics of Projects
Purpose: Project is usually a one time activity with clear objectives
Life Cycle: Follows a life cycle of tasks
Interdependencies: Each activity is inter-dependent on the completion of others
Uniqueness: Has unique features that requires customized attention
Conflict: Stakeholders have conflicting objectives
Objectives: Cost, Time, Performance;
More time could enhance performance or quality, but the deadline may not be met if more time is given and costs would be exceeded
Principles of Effective Project Management
Direct People both individually and as a team
Rally and keep up excitement of the project
Keep everyone informed
Manage healthy conflict
Empower the team
Encourage risk taking and creativity
Calculation: AON (Activities on Node Method)
Critical Path Method: Compute the longest time path through the network (CP)
Draw Project Network Digram
Calculate ES (Early Start) and EF (Early Finish) of project
Calculate TS (Total Slack)
LF - EF or LS - ES
Calculate LS (Late Start) and LF (Late Finish)
Chapter 3: Service Process Improvement and Innovation
Quality and Productivity are twin paths to creating value for both customers and companies
Quality focuses on benefits created for customers
Productivity focuses on financial costs incurred by firm
Foundations of Continuous Improvement
Customer Satisfaction
Management by Facts
Respect for People
Productivity = Output/Input
Cause and Effect/ Fishbone Diagram: Tool for Analysis and Problem Solving
Categories: Information, Customers, Material, Procedures, Personnel, Equipment. Use 5W1H
Service Blueprint: A map that accurately portrays the service system so that different people involved in providing the service can understand and deal with it objectively and efficiently; useful at design and redesign stages of the service process
Breaks the service down into logical components to depict the steps in the processes
Components:
Physical Evidence
Customer Action
"Frontstage" contact employee actions
"Backstage" contact employee actions
Support Processes
Use when:
Want to improve service offering
Want to design a new service that mixes digital and non-digital touchpoints
Lost track of how the service is produced
There are many players in the service
When needed to understand customer's interactions with partners throughout the service for a better customer experience
Chapter 2: The Service Encounter
Service Encounter Triad
Service Organisation
Influencing Factors:
Culture
Empowerment
Control System
Supporting Technology
Performance Evaluation
Contact Personnel
Selection
Training
Ethical Climate
Customer
Influencing Factors:
Expectation
Attitude
Coproduction
Communication
Verbal Communcation
PLAN
Prepare for positive customer interactions
Let customers know the are important
Address Customer's Expectations positively
Nurture a continuing relationship
Non-verbal Communication
Movement
Gestures
Body Positions
Vocal Qualities
Various Unspoken Signals
Strategies to improve:
Seek out nonverbal cues
Confirm Perceptions
Seek clarifying feedback
Analyze interpretations of nonverbal cues
Listening Skills
Be Prepared
Listen Actively
Show Empathy
Listen openly and avoid biases
Send positive nonverbal cues
Refrain from arguing
Take notes
