Service Delivery Process

FOUR STAGES OF OPERATIONAL COMPETITIVENESS Philosophical viewpoint where operations move from “necessary evil” to the key source of competitive advantage.

FOUR STAGES OF OPERATIONAL COMPETITIVENESS Stage 1: Available for Service operations are a “necessary evil” operations are “reactive” the primary mission is to avoid mistakes technological investment, training, and personnel costs are minimize may actually work if no competition however, it may attract competition

FOUR STAGES OF OPERATIONAL COMPETITIVENESS Stage 2: Journeyman prompted by the arrival of competition operations become outward-looking investment in technology is linked to long-term costs savings processes are developed, implemented, and monitored operations still viewed as a secondary function

FOUR STAGES OF OPERATIONAL COMPETITIVENESS Stage 3: Distinctive Competencies Achieved the firm has mastered the core service understands complexity of making changes operations are now viewed equal with other departments view of technology changes from “cost savings” to “enhancing the customers experience”

FOUR STAGES OF OPERATIONAL COMPETITIVENESS Stage 4: World Class Service Delivery company’s name is synonymous with with service excellence mission goes beyond satisfaction to “delightment” technology provides a means to accomplish tasks that the competition cannot duplicate

THE CUSTOMER’S INVOLVEMENT IN THE PRODUCTION PROCESS If the consumer is in the service factory, it is clear that if the factory is changed, consumer behavior will have to be changed Changing the factory, will mean changes in the consumer’s script, as well as changes in the scripts of contact personnel

SERVICE DELIVERY PROCESS The marriage of customer needs with the mfg and technological capabilities of the firm The marriage involves compromise customer needs can seldom be met completely and economically operational efficiency has to be balanced against the effectiveness of the system from the consumer’s point of view

SERVICE DELIVERY PROCESS Peak efficiency models inputs flow at a steady rate into the technical core the market absorbs a single kind of product at a continuous rate

SERVICE DELIVERY PROCESS Peak efficiency models decisions within the technical core can be programmed and individual discretion can be replaced by rules jobs are deskilled lower quality of labor can be used which lowers the labor cost rules can be programmed into machines

THE FOCUSED-FACTORY CONCEPT Accepts the notion that the “ideal world” is virtually impossible to create Concentrates on performing one particular task in one particular part of the plant buffering--surrounds the tech core on the input and output sides smoothing--attempts to manage fluctuations in supply and demand anticipating--predicts fluctuations rationing--triage’ strategies Focus generates efficiency as well as effectiveness

APPLYING EFFICIENCY MODELS TO SERVICES Servuction system is an operations nightmare impossible to use inventories problems with decoupling production from the customer system is directly linked to the market demand varies day to day, hour to hour, minute to minute massive problems in capacity planning and utilization

POSSIBLE SOLUTIONS TO SERVICE OPERATION PROBLEMS Isolate the technical core technical core should be subjected to production-ling approaches hard technologies--hardware soft technologies--rules and regulations high contact areas should sacrifice efficiency in the interest of the consumer

SERVICE BLUEPRINTS Blueprints provide a means of communication between operations and marketing and can highlight potential problems on paper before they occur. essentially a flowchart that shows lines visibility

COMPONENTS OF A SERVICE BLUEPRINT Identify direction 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 the amount of inventory build-up at each step Identify the bottlenecks in the system

CONSTRUCTING THE SERVICE BLUEPRINT Elicit scripts from employees and customers order events in sequence of occurrence Identify potential fail points in the system Specify the time frame for service execution Given the costs of inputs needed for the system to operate, analyze the profitability of the system

BLUEPRINTING AND NEW PRODUCT DEVELOPMENT Complexity--the number and intricacy of steps Specialization strategy reduces complexity by reducing the number of steps in the process it unbundles the service offering niche strategy

BLUEPRINTING AND NEW PRODUCT DEVELOPMENT Complexity--the number and intricacy of steps Penetration strategy increases complexity by increasing the number of steps attempts to appeal to a broader market

BLUEPRINTING AND NEW PRODUCT DEVELOPMENT Divergence--degrees of freedom in decision making Volume-oriented strategy (production-line) decreases divergence produces standardized output and reduces costs but does so at the expense of increasing conformity and inflexibility

BLUEPRINTING AND NEW PRODUCT DEVELOPMENT Divergence--degrees of freedom in decision making Customization strategy increases divergence produces a heterogeneous output creates flexibility in tailor-made solutions but it does so at increased expense