Service Operations Management: The total experience SECOND EDITION Chapter Two Developing a Service Operations Strategy

Strategic Alignment Steps to take and to successfully build the organization around its key processes include:-   Defining and process mapping what are core activities. Assigning an owner to each process. Making process teams the main building blocks of the organization (with the teams comprising of the key players involved in the process). Permanently knocking down functional/departmental boundaries Flattening the hierarchy Cutting the number of activities within each process to a minimum (i.e. by reducing the number of transactions the potential for errors is lessened). Making customer satisfaction the primary driving force for change. Rewarding team results, not just individual performance.

Fig. 2.1. Value-stream mapping – line of sight along the value chain

Fig. 2.2. Determining a service operations strategy

Fig. 2.3. Achieving excellence through enabled teams

Fig 2.4 Market intelligence gathering

corporate ‘personality’ Customer-value based corporate culture Role of Leadership Customer Links Organizational Team-Work Cultural Support Systems Collecting the information

Alignment of service strategy to corporate objectives Positioning Sources of competitive advantage Differentiation Critical success factors Segmentation Opportunity development Resolving Strategic Options Establishing an Analytical Planning Process

Fig 2.5 Influential factors on customers’ perceptions

Fig 2.6 Systematic and analytical strategic planning

Developing a Strategy to Reflect Lifetime Customer Values The Implications of Only Getting it Right First Time Setting the right direction The Strategic Intent The Staff The Information and Support Systems Customer-value segmentation Managing for outcomes

Fig 2.7 Elements to customer loyalty

Fig 2.8 Ease of contact and willingness to complain

Fig 2.9 Customers’ values at the centre of strategy development

Customer Retention and Recovery Strategy Retain, Invest and Prevent Defection Feedback Learning Curve Strategic focus: new or existing customers? Establishing Customer Listening Posts. Eliminating blame management in service recovery. Empowering everyone to own the customer's problem. Managing service improvement by getting the facts through quantitative analysis. Encouraging partnering between operational and service development areas. Measuring the success of improvement efforts through the customer retention index

Fig 2.10 Feedback learning curve

Execution of the operations service strategy Four principles of great operational service   Reliability means consistent, dependable service every time the customer engages with the organization Surprise delivers something extra, more than the customer expects to receive Recovery restores the customer's confidence when a service performance falls short of the expected quality. Fairness involves treating customers with respect and integrity

Dynamic factors Emotional considerations Empowered Employees Enliven Strategy Strategic listening Disseminate information far and wide Creating a dynamic service operations scorecard

Fig.2.11 Dynamic scorecard