1. DESIGN AND PROCESS SELECTION OF SERVICES Prof. Kaushik Paul

2. 2 OBJECTIVES Nature of Services (Generalizations) Classification of services The service Triangle Applying behavioural science to service encounters Service Strategy: Focus & Advantage

3. 3 OBJECTIVES Service-System Design Matrix Service Blueprinting Service Fail-Safing (Poka Yokes) The three contrasting service designs Characteristics of a Well-Designed Service Delivery System

4. 4 NATURE OF SERVICES (GENERALIZATIONS) Everyone is an expert on services (Good deal of experience with services) Services are idiosyncratic (Lunch at Jack-in-the-Box vis-à-vis an expensive French Restaurant) Quality of work is not quality of service (Auto dealership does good work on your car, but takes weeks to deliver) Most services contain a mix of tangible and intangible attributes (service package) High-contact services are experienced, whereas goods are consumed Effective management of services requires an understanding of marketing and personnel, as well as operations Services often take the form of cycles of encounters involving face-to-face, phone, Internet, electromechanical, and/or mail interactions

5. 5 CLASSIFICATION OF SERVICES A service business is the management of organizations whose primary business requires interaction with the customer to produce the service Facilities-based services: Where the customer must go to the service facility Field-based services: Where the production and consumption of the service takes place in the customer’s environment

6. 6 Internal Supplier Internal Customer External Customer Internal Supplier INTERNAL SERVICES Internal services is the management of services required to support the activities of the larger organization. Services including data processing, accounting, etc

7. 7 The Service Strategy The Customer The People The Systems THE SERVICE TRIANGLE A philosophical view that suggests the organization exists to serve the customer, and the systems and the employees exist to facilitate the process of service.

8. 8 APPLYING BEHAVIOURAL SCIENCE TO SERVICE ENCOUNTERS The front-end and back-end of the encounter are not created equal (Malaysian Airlines lavishes attention on arrival baggage collection and ground transportation) Segment the pleasure, combine the pain (Two 90 second rides at Disney Land is preferred to a single 3 minute ride) Let the customer control the process (Allowing blood donors to choose which arm the blood sample is to be drawn from reduces perceived pain of the procedure) Pay attention to norms and rituals (Consulting firms make presentations to the client top boss irrespective of his actual involvement in the project) People are easier to blame than systems (The gate agent is often blamed for not allowing a late arrival on the plane) Let the punishment fit the crime in service recovery (A botched task calls for material compensation while poor treatment from a server calls for an apology)

9. 9 SERVICE STRATEGY: FOCUS AND ADVANTAGE Service strategy begins by selecting the operating focus- the performance priorities -by which the service competes. These include: Treatment of the customer (friendliness and helpfulness) Speed and convenience of service delivery (e.g. McDonalds or Dominos Pizza) Price Variety (one-stop shopping philosophy) Quality of the tangible goods central to the service (A “World-class” corned beef sandwich or an understandable insurance policy) Unique skills that constitute the service offering (Hair styling, brain surgery or piano lessons)

10. 10 SERVICE-SYSTEM DESIGN MATRIX Degree of customer/server contact Buffered Permeable Reactive High core (none) system (some) system (much) Low Face-to-face total customization Face-to-face loose specs Sales Opportunity Production Efficiency Face-to-face tight specs Phone Contact Internet & on-site technology Mail contact Low High

11. 11 EXAMPLE OF SERVICE BLUEPRINTING

12. 12 Task Tangibles Treatment SERVICE FAIL-SAFING POKA-YOKES (A PROACTIVE APPROACH) Poka Yokes in Japanese means “Avoid Mistakes”. It is about keeping a mistake from becoming a service defect Height bars at amusement parks Indented trays used by surgeons to that ensure no instrument are left in the patient Beepers on ATM machines to warn people to take out their cards How can we fail-safe the three Ts?

13. 13 Have we compromised one of the 3 Ts? Task Treatment Tangible

14. 14 THREE CONTRASTING SERVICE DESIGNS The production line approach (ex. McDonald’s) The self-service approach (ex. automatic teller machines) The personal attention approach (ex. Ritz-Carlton Hotel Company)

15. 15 CHARACTERISTICS OF A WELL-DESIGNED SERVICE SYSTEM Each element of the service system is consistent with the operating focusof the firm (When focus is on speed, each step should foster speed) It is user-friendly(Good signage, understandable forms, logical steps in process etc.) It is robust(Cope effectively with variations in demand and resource availability) It is structured so that consistent performanceby its people and systems is easily maintained (Tasks are doable, supporting technologies are truly supporting and reliable) It provides effective links between the back office and the front office so that nothing falls between the cracks It manages the evidence of service quality in such a way that customers see the value of the service provided It is cost-effective (Minimum waste of time and resources)

16. Reference: Operations Management for Competitive AdvantageBy Chase, Jacobs & Aquilano, 10e HOPE YOU ENJOYED THE CLASS. QUESTIONS PLEASE THANK YOU