1. CHAPTER 8 Designing and Managing Service Processes

2. Overview of Chapter 8
Flowcharting Service Delivery
Blueprinting Services to Create Valued Experiences and Productive Operations
Service Process Redesign
The Customer as Co-Producer
Self-Service Technologies

3. Flowcharting Service Delivery

4. Flowcharting Service Delivery Helps to Clarify Product Elements
Technique for displaying the nature and sequence of the different steps in delivery service to customers
Offers way to understand total customer service experience
Shows how nature of customer involvement with service organizations varies by type of service:
People processing
Possession processing
Mental Stimulus processing
Information processing

5. Simple Flowchart for Delivery of a People-Processing Service (Fig. 8
Simple Flowchart for Delivery of a People-Processing Service (Fig. 8.2a)

6. Simple Flowchart for Delivery of a Possession-Processing Service (Fig
Simple Flowchart for Delivery of a Possession-Processing Service (Fig. 8.2b)

7. Simple Flowchart for Delivery of a Mental Stimulus Processing Service (Fig. 8.2c)

8. Simple Flowchart for Delivery of an Information-Processing Service (Fig. 8.2d)

9. Blueprinting Services to Create Valued Experiences and Productive Operations

10. Blueprinting Developing a Blueprint
Identify key activities in creating and delivering service
Define “big picture” before “drilling down” to obtain a higher level of detail
Advantages of Blueprinting
Distinguish between “frontstage” and “backstage”
Clarify interactions between customers and staff, and support by backstage activities and systems
Identify potential fail points; take preventive measures; prepare contingency
Pinpoint stages in the process where customer commonly have to wait

11. Key Components of a Service Blueprint
1. Define standards for front-stage activities
2. Specify physical evidence
3. Identify main customer actions
4. Line of interaction (customers and front-stage personnel)
5. Frontstage actions by customer-contact personnel
6. Line of visibility (between front stage and backstage)
7. Backstage actions by customer contact personnel
8. Support processes involving other service personnel
9. Support processes involving IT
- Identify fail points and risks of excessive waits
- Set service standards and do failure-proofing

12. Blueprinting the Restaurant Experience: Act 1 (Fig. 8.8)

13. Blueprinting The Restaurant Experience: A Three-Act Performance
Act 1: Introductory Scenes
Act 2: Delivery of Core Product
Cocktails, seating, order food and wine, wine service
Potential fail points: Menu information complete? Menu intelligible? Everything on the menu actually available?
Mistakes in transmitting information a common cause of quality failure – e.g. bad handwriting; poor verbal communication
Customers may not only evaluate quality of food and drink, but how promptly it is served, serving staff attitudes, or style of service
Act 3: The Drama Concludes
Remaining actions should move quickly and smoothly, with no surprises at the end
Customer expectations: accurate, intelligible and prompt bill, payment handled politely, guests are thanked for their patronage

14. Improving Reliability of Processes by Failure Proofing
Identify fail points
Analysis of reasons for failure often reveals opportunities for failure proofing to reduce/eliminate future risk of errors
Need fail-safe methods for both employees and customers
Have poka-yokes to ensure service staff do things correctly, as requested, or at the right speed
Customer poka-yokes focus on preparing the customer for:
The encounter
Understanding and anticipating their roles
Selecting the correct service or transaction
See Service Insights 8.1 – Framework to prevent customer failures

15. Service Process Redesign

16. Why Redesign? (1)
“Institutions are like steel beams—they tend to rust. What was once smooth and shiny and nice tends to become rusty.”
Mitchell T. Rabkin MD, formerly president of Boston’s Beth Israel Hospital

17. Why Redesign? (2) Revitalizes process that has become outdated
Changes in external environment make existing practices obsolete and require redesign of underlying processes
Creation of brand-new processes to stay relevant
Rusting occurs internally
Natural deterioration of internal processes; creeping bureaucracy; evolution of spurious, unofficial standards
Symptoms:
Extensive information exchange
Data that is not useful
High ratio of checking or control activities to value-adding activities
Increased exception processing
Customer complaints about inconvenient and unnecessary procedures

18. Process Redesign: Approaches and Potential Benefits (1)
Eliminating non-value-adding steps
Simplify front-end and back-end processes with goal of focusing on benefit-producing part of service encounter
Get rid of non-value adding steps
Improve productivity and customer satisfaction
Shifting to self-service
Increase in productivity and service quality
Lower costs
Enhance technology reputation
Differentiates company

19. Process Redesign: Approaches and Potential Benefits (2)
Delivering direct service
Bring service to customers instead of bringing customers to service firm
Improve convenience for customers
Productivity can be improved if companies can eliminate expensive retail locations
Increase customer base
Bundling services
Involves grouping multiple services into one offer, focusing on a well- defined customer group
Often has a better fit to the needs of target segment
Increase productivity
Add value for customers through lower transaction costs
Customize service
Increase per capita service use

20. Process Redesign: Approaches and Potential Benefits (3)
Redesigning physical aspects of service processes
Focus on tangible elements of service process; include changes to facilities and equipment to improve service experience
Increase convenience
Enhance the satisfaction and productivity of frontline staff
Cultivate interest in customers
Differentiate company

21. The Customer as Co-producer

22. Levels of Customer Participation (1)
Actions and resources supplied by customers during service production and/or delivery
Includes mental, physical, and even emotional inputs

23. Levels of Customer Participation (2)
Low – Employees and systems do all the work
Often involves standardized service
Medium – Customer helps firm create and deliver service
Provide needed information and instructions
Make some personal effort; share physical possessions
High – Customer works actively with provider to co-produce the service
Service cannot be created without customer’s active participation
Customer can jeopardize quality of service outcome (e.g. weight loss, marriage counseling)

24. Customers as Partial Employees
Customers can influence productivity and quality of service processes and outputs
Customers not only bring expectations and needs, they also need to have relevant service production competencies
Customers also need to be recruited as they are “partial employees”. Firms need to get those with the skills to do the tasks
For the relationship to last, both parties need to cooperate with each other

25. Self-Service Technologies

26. Self-Service Technologies (SSTs)
Ultimate form of customer involvement
Customers undertake specific activities using facilities or systems provided by service supplier
Customer’s time and effort replace those of employees
e.g. Internet-based services, ATMs, self-service gasoline pumps
Information-based services can easily be offered using SSTs
Used in both supplementary services and delivery of core product
e.g. eBay – no human auctioneer needed between sellers and buyers
Many companies seek to encourage customers to serve themselves using Internet-based self-service
Challenge: getting customers to try this technology

27. Psychological Factors Related to the use of SSTs
SSTs advantages
Time savings
Cost savings
Flexibility
Convenience of location
Greater control over service delivery
High perceived level of customization
SSTs disadvantages
Anxiety and stress experienced by customers who are uncomfortable with using them
Some see service encounters as social experiences and prefer to deal with people

28. What Aspects Of SSTs Please Or Annoy Customers? (1)
People love SSTs when…
SST machines are conveniently located and accessible 24/7—often as close as nearest computer!
Obtaining detailed information and completing transactions can be done faster than through face-to-face or telephone contact
People in awe of what technology can do for them when it works well
People hate SSTs when…
SSTs fail – system is down, PIN numbers not accepted, etc
Poorly designed technologies that make service processes difficult to understand and use
they mess up - forgetting passwords; failing to provide information as requested; simply hitting wrong buttons

29. What Aspects Of SSTs Please Or Annoy Customers? (2)
Key weakness of SSTs: Too few incorporate service recovery systems
Customers still forced to make telephone calls or personal visits

30. Putting SSTs to Test by Asking a Few Simple Questions
Does the SST work reliably?
Firms must ensure that SSTs are dependable and user-friendly
Is the SST better than interpersonal alternatives?
Customers will stick to conventional methods if SST doesn’t create benefits for them
If it fails, what systems are in place to recover?
Always provide systems, structures, and technologies that will enable prompt service recovery when things go wrong

31. Summary for Chapter 8 – Designing and Managing Service Processes (1)
Flowcharting helps clarify delivery elements. It also shows how nature of customer involvement with service organizations varies by type of service
Service blueprinting can be used to design a service and create a satisfying experience for customers. Key components of the blueprint include
Definition of standards for each front-stage activity
Physical and other evidence for front-stage activities
Principal customer actions
Line of interaction
Front-stage actions by customer-contact personnel
Line of visibility
Backstage actions by customer-contact personnel
Support processes involving other service personnel
Support processes involving information technology

32. Summary for Chapter 8 – Designing and Managing Service Processes (2)
Blueprinting a restaurant (or other service) can be a three-act performance
Prologue and introductory scenes
Delivery of the core product
Conclusion of the drama
Failure proofing can be designed into service processes to improve reliability
Service process redesign can be categorized into five kinds
Eliminating non-value-adding steps
Shifting to self-service
Delivering direct service
Bundling services
Redesigning the physical aspect of service processes

33. Summary for Chapter 8 – Designing and Managing Service Processes (3)
When the customer is a co-producer, issues to consider are
Levels of customer participation
Customers as partial employees
When deciding to use Self-service Technologies (SSTs), firms should consider
Psychological factors related to the use of SSTs
Aspects of SSTs that please or annoy customers