Service Delivery Process
4 Stages of Operational Competitiveness
1. Available for Service
Operations are viewed as a necessary evil
Strategically, the service firm can choose to view its operations as a necessary evil to complete day-to-day tasks, or use its operations as the key component of its competitive strategy
Operations are at best reactive to the needs of the rest of the organization and deliver the service as specified
Primary mission is to avoid mistakes
Technological investment, investment in training,
and personnel costs are minimized
2. Journeyman
Prompted by the arrival of competition
Operations become more outward-looking
Characterized by the introduction of technologically based systems for the primary purpose of cost savings
Employees are given procedures to follow
Management focuses on ensuring that standardized procedures are followed
3. Distinctive Competencies Achieved
View of technology changes from “cost savings” to “enhancing the effectiveness of service to customers”
Involves a philosophical change of balancing efficiency with effectiveness
The firm has mastered the core service and understands the complexity of changing current operations
Front-line workers may select from alternative procedures
4. World-Class Service Delivery
The company’s name is synonymous with service excellence
Operations become adaptive and innovative
Technology provides a means to accomplish tasks that the competition cannot easily duplicate
Balance Marketing and Operations
Match consumers’ needs with the technology and manufacturing capabilities of the firm
Model of Service Firms
Thompson’s Perfect-World Model
Focused-Factory Concept
In a perfect world, service firms will be efficient
To operate efficiently, a firm must be able to operate “as if the market will absorb the single kind of product at a continuous rate and as if the inputs flowed continuously at a steady rate and with specified quality”
“Uncertainty creates inefficiencies”
An operation that concentrates on performing
one particular task in one particular location
Used for promoting experience and effectiveness through repetition and concentration on one task necessary for success
Plant-Within-a-Plant Concept
The strategy of breaking up large, unfocused plants into smaller units buffered from one another so that each can each be focused separately
Organizations seek to buffer environmental influences by surrounding their technical core with input and output components
Operations Solutions for Service Firms
- Isolate the technical core
- Production-lining the whole system
- Creating flexible capacity
- Increasing customer participation
- Moving the time of demand (Demand smoothing)
Service Blueprinting
Blueprints provide a means of communication between operations and marketing and can highlight potential problems on paper before they occur
Show points of customer contact
Types:
1) Use to visualize the process flow of the service delivery system
2) Use as a flow chart to capture the efficiency of the process (time)
A process control technique which focuses on the human-to-human (human-to-technology) interfaces
Help visualize the process flow of a service delivery system
Identify failure points, areas of improvement and innovation opportunities in a service operation
Components:
Customer actions
represents the sequential steps of the customer
Onstage contact person (visible)
involves in customer interaction
Backstage contact person (invisible)
contact employees who play a support role
Support Processes
Non-contract employees who play a support role e.g., outsource
Physical Evidence
Tangibles exposed to customers
In practice
Separate blueprints can be developed for different segments of the customers.
In cases where technology is involved (eg. online shopping), the onstage contact employee can be replaced with onstage technology.
Going through the process of building a service blueprint is enough to gain important insights and a better understanding of the firm’s service delivery system.
The service blueprint also helps give a visual picture of the servuction model
The servuction model illustrates 4 factors that influence service experience:
Servicescape (recall service package)
Contact personnel
Other customers
Invisible organization and systems. This refers to the rules, regulations and the process in the organization
Blueprinting: Servuction Process
Identify directions in which processes flow
Identify the time it takes to move from one process to the next
Identify the costs involved with each process step
Identify bottlenecks in the system
Blueprinting for New Service Development
Degree of Complexity
Degree of Divergence
E.g., activities of an attorney contrasted with those of a paralegal
E.g., clinic is less complex than a general hospital
Measured by the number and intricacy of the steps in the service blueprint
Amount of discretion or freedom the server is allowed to customize the service
Changing the complexity
Specialization positioning strategy
Reduces complexity
Penetration positioning strategy
Increases complexity
By adding more services and/or enhancing current services to capture more of a market
By unbundling the different services offered
Changing the Divergence
Volume-oriented positioning strategy
Reduces divergence
Produces standardized output and reduces costs but does so at the expense of increasing conformity and inflexibility
Niche positioning strategy
Increases divergence
Tailors the service experience to each customer