I. Stages of Operational Competitiveness the different levels of customer contact in the service firm II. Classification of the different strategies in different service operation

1. I. Stages of Operational Competitiveness
Stage 1: Available for service
Understand the potential business impact of a problem with your products.
Make sure that services are available to provide an appropriate level of response to
minimize impact on custome r’s business. Assess the needs addressed by current
offerings to determine if an opportunity exists to provide extended service coverage,
and if so at what price. Not all customers need, nor are willing to pay for extended
service coverage.
Stage 2: Journeyman
After maintaining a sheltered existence in stage 1, a service firm may face
competition and may be forced to re-evaluate its delivery system. Operation managers
then must adopt industry practices to maintain parity with new competitors and avoid
significant loss of market share.
Stage 3: Distinctive competencies achieved
Senior managers of firms in stage 3 have a vision of what creates value for the
customer and they also understand the role that operations managers must play in
delivering the service. Operations managers are the typical advocates of TQM in these
firms and take the lead in instituting service guarantees, worker empowerment, and
service enhancing technologies.
Stage 4: World-class service delivery
Not satisfied with just meeting customer expectations, world class firms expand
on these expectations to levels that competitors find it difficult to meet. World class
service firms define the quality standards by which others are judged. Sustaining
superior performance throughout the delivery system is a major challenge. Duplicating
the service at multiple sites, and in particular overseas, is the true test of a world class
competitor.
II. What are the different levels of customer contact in the service
firm?
Active and Passive Contact
Most tasks performed in the process of providing services involve direct
contact with the customer; other tasks may be performed away from the
customer (i.e., in the back office). The level of customer contact required may
range from low to high. Where contact is low, most of the tasks are performed
in the back office, but where contact is high the customer is in direct contact
with the service system through most of the service delivery process. Customer -

2. service system contact may be active, passive or both, based on the nature of
the service. In this paper, active contact is defined as direct contact between the
customer and the service provider which involves direct customer -service
system interaction.
Passive contact is defined as direct contact between the customer and the
service system which does not involve customer-service system interaction.
Typically, this form of contact requires the physical presence of the customer in
the service system. However, passive contacts do not generally require the
customization of the service product. Consequently, passive contact services are
more amenable to standardization and automation.
III. Classification of the different strategies in different service
operation
Strategy at the corporate level sets out the direction of the whole
organization, acknowledging the key stakeholders the organization is seeking to
satisfy. These stakeholders will be both internal and external. Such a strategy is
a statement of how the organization wants to position itself in its economic,
political, social environment. It details the types of business the corporation
wants to be in and what parts of the world it wants to operate in.
In large diversified companies the second level of strategy, business level
strategy, is at the Strategic Business Unit (SBU) level. This strategy sets out the
plan for how the business unit will deal with its customers, markets and
competitors and also how this will contribute to the overall corporate strategy.
Growth and profitability targets and return on investment are considered at this
level.
The third level of strategy is where the business functions, operations or
finance or marketing, formulate their long-term plans which support the aims
being pursued by the business strategy. Different business object ives would
probably require different operations strategies in that they would demand a
different set of priorities. Under the top-down model the role of the operations
function is to implement business strategy formulated elsewhere.
IV. Define the following:
Technical Core – the place within an organization where its primary operations are
conducted.
Perfect-World Model – J.D Thompson’s mode l of organizations proposing that
ope rations’ pe rfe ct e fficiency is possible only if inputs, outputs, and quality happen of
a constant rate and remain known and certain.

3. Focused Theory – an operation that concentrates on performing or a particular task
of the plants used for promoting experience and effectiveness through competition and
concentration on one task necessary for success.
Plant Within a plant – the strategy of breaking up large, unfocused plants into
smaller units buffered from one another so that each can focus separately.
Buffering – surrounding the technical core with input and output components to
buffer environmental influences.
Smoothing – Managing the environment to reduce fluctuations in supply and/or
demand.
Anticipating – mitigating the worst effects of supply and demand fluctuations by
planning for them.
Rationing – direct allocations of inputs and outputs when the demands placed on a
system by the environment exceed the system ability to handle them.
Decoupling – disassociating the technical core from the servuction system
Production-line approach – the application of hand and soft technologies to a service
operation in order to produce a standardized service product.
Hard technologies – hardware that facilitates the production of standardized product.
Soft technologies – rules, regulation, and procedures that facilitate the production of
a standardized product.
Blueprinting – the flowcharting of a service operations.
Service cost per meal – the labor costs associated with providing a meat on a per-meal
basis (total labor cost/ maximum output per hour)
Process time – calculated by dividing the activity time by the number of locations at
which the activity is performed.
Activity time – the time required so perform one activity at one station.
Stations – a location at which activity is performed.
Maximum output per hour – the number of people that can be processed at each
station in one hour.

4. Bottlenecks – point in the system at which consumers wait the longest periods of
time.
Fail points – points in the system at which the potential for malfunction is high and
at which a failure would be visible to the customer and regarded as significant.
One sided blueprint – An unbalance d blue print base d on management’s pe rce ption of
how the sequence of events should occur.
Convenient Scripts – employee/consumer scripts that are mutually agreeable and
enhance the probability of customer satisfaction.
Divergent scripts - employee/consumer scripts that mismatch and point to areas in
which customer expectations are not being met.
Two sider blueprint – a blueprint that takes into account both employee and
customer perceptions of how the sequence of events actually occurs.
Script norms – proposed scripts developed by grouping together events commonly
mentioned by both employers and customers and then ordering those events in their
sequence of occurrence.
Complexity – a measure of the number and intricacy of the steps and sequences that
constitute a process.
Divergence – a measure of the degrees of freedom service personnel are allowed when
providing a service.
Volume-oriented positioning strategy – a positioning strategy that reduces
divergence to create product uniformity and reduce costs.
Niche positioning strategy – a positioning strategy that increases divergence in an
operation to tailor the service experience to each customer.
Specialization positioning strategy – a positioning strategy that reduces complexity
by unbundling the different services offered.
Unbundling – divesting an operation of different services and concentrating on
providing only one or a few services in order to pursue specialization positioning
strategy.
Penetration strategy – A positioning strategy that increases complexity by adding
more services and/or enhancing current services to capture more of a market.