Service Design & Management

Chris Jarvis MG2066 1

Service Design and Management


Overview

Defining "service"?

Service-Product Mix

Service Guarantees

Service Cycle

Customer Contact

Service Matrix

Employees and Service

Strategy: Focus & Advantage

Service Blue printing

Fail-safe Methods

a Well-Designed Service Delivery System


True or false?

Everyone is an expert on services???

Services are idiosyncratic?

Quality of work is not quality of service?

Most services contain a mix of tangible and intangible attributes?

High-contact services are experienced, goods are consumed?

Managing services marketing, personnel and operations know-how?

Services involve cycles of transactions involving face-to-face encounters, information exchange, social and mechanical interaction?


Service – defined by

Tangible and intangible elements

Most services include elements of products

The customer is involved in delivery

Simultaneous production and consumption

Problems in defining and measuring

quantity & quality

productivity

Demand variances (peaks-troughs) are significant

Other manufacturing-service differences?

Service Design Issues?


Product, information and service processing

Where is the service in? Fertilizers, furniture, vehicles, personal computers,

food, pharmaceuticals

Information services? accountants, lawyers, call centres, insurance offices

Health and pleasure services? Beauty , hospitals, health farms, physiotherapists,

restaurants.


Product Service Mix

100% 75% 50% 25% 0% 100%75%50%25%

Self-service green grocer

Car manufacture

Carpet sales and fitting

Pizza Hut

Cordon-bleu restaurant

Car maintenance

Hairdressing

Consulting services

Goods Services


Place and approach

Customer

ServiceStrategy

StaffSystems

Place/virtual/remoteFacilities-basedField-basedInternal (client-server)

Approachesproduction lineself-servicepersonal attention

High and Low contact


Service Design Questions

Who is our customer?

How do we differentiate our service?

What is our service package & operating focus

What are the processes, staff, facilities?

Can we protect the service?

Aspects of service package - defined by prior staff training

Speed of change of service offerings


Service Matrix

Interaction & Customisation

Low High

Low

High

EasyJetDHL/FedExMotelGolf course

RetailingWholesalerDriving schoolRetail bank

SolicitorDoctorPersonal trainerAccountantArchitect

Hospital?Internet bankingRepair services

La

bo

ur

inte

ns

ity


Banking - High/Low contact

LowHigh

Facility location

Facility layout

Product design

Process design

Scheduling

Capacity planning

Staff skills

Quality control

Time standards

Wages

Capacity planning

Near customer

According to expectation?

Ambiance, user friendly?

Intimate stages

?

Full? Lost customer

?

?

?

Time-based pay?

Capacity=peak demand

?

?

?

?

?

?

Technical skills only?

Measurable, fixed

Forms = surrogates - tight times

Output-based pay?

?


Heroes and villains

Customers'experience

performance

Furiouslitigation

Complainant

Dissatisfied

Satisfied

Delighted

Villains

HeroesRecovery planning

ClubClassmember

What is ServQual?


Operating Focus

Customer treatment - friendliness, help

Speed and convenience of delivery

Price and payment

Variety of services (singular or one-stop shop)

Quality of tangibles e.g. the pie, the insurance

Unique skills - flambe, hair cut, roofer


Staff, Operations, Innovation and Contact

Skills

Technolinnovation

OperationsFocus

Clerical

AutomationIT

Formsdocuments

Helping

Routing

Ondemand

Verbal

DB querieseMail

Linesresponses

Procedural

Applicationsoftware

Controlflows

Craft/trade

Self-serve

Managecapacity

Analytical

Teams

Clientinteraction


Service Design, Quality and Intangibles

Quality (measured by deliverer or customer) depends on Tangibles and intangibles in the package. Controls to improve utilisation & reduce costs.

These maysimplify & routinise to reduce consumer choice. A, B & C - take-or-leave-menus. But "I do not want a standard package". "Fine - but pay more. Even then we may not be

able to control quality".


Service Design Issues

A. Engineer for efficiency and utilisation Routinisation Table d'hote packages Impersonal vs. contact Move from point of contact to back-office Automate e.g. ATMs, tele-sales & call-centres, tracking systems

B. Design from a customer service perspective (content + quality of interaction/experience) enrich the experience balance perceived quality with costs of service customer-orientation: research & specify relationships what is a TQM approach to service design? specify service objectives and bench-mark against rivals

A & B - not mutually exclusive.


Service design and strategy

Specify the tangible service elements/steps customer participation waiting (cannot stock a service) the intangible aspects how efficiencies must be secured quality assurance measures

Move front shop ==> back shop take the customer out of the process use the customer as labour increase staff flexibility to balance capacity & demand

"Service managers face problems that may be insignificant to production managers who have much to learn from the service ethic".

Strategic objectives- best- cheapest- quickest- most innovative- brand loyalty- repeat business


Engineering Strategies for Services

Front shop/Back roomservice design may seek to minimise customer participation

"front shop" for face-to-face elements. select activities to move to "back-room" and apply

conventional production principles no customer access to back-room?

Internet banking

On-line help desk


The Holiday to Aghios Nikolios

The Brochure - vetting every entry travel and transfer arrangement

hotel & apartment

check resort/villa environment before brochure publishing: disco, steps to climb etc.

Representatives visit daily + available for clients

ability to act - fielding the problem (no prejudice)

narrow margins - one refund Ë flood.

minor complaints but clients are trapped.

be irritated or pay extra to fly home

The flight home


Fail-safe Services - Poka-Yoke methods

Avoid mistakes becoming service defects Apply fail-safe methods to 3T? Physical and visual warnings

Task

TangiblesTreatment

Was task done correctly?

What was attitudeand responsiveness

of staff?

What tangibles or environmental features were

missing??


Air Travel Service Elements

LeaveAirport

CollectBags Arrives at

airport

Request flight information

Makereservation

Check in

Proceed to gate& security check

Boardaircraft

In-flightservice

Leaveaircraft

Poke Yoke Exercise:Filling in the missing details


Gaffs - Mea Culpa?

• Waitress chewing gum• Nurse did not wash hands• Wine is corked• Food is cold• Booked into wrong hotel• Passenger forgets passport• Passenger late for check-in• 50 minutes between placing order and service to table• Lost record card at clinic• etc


Strategy: Focus & Advantage - Performance Priorities

Product/service innovationCost leadership

Treatment of the customer Speed and convenience of service delivery Pricing and pricing structure Variety - pick and mix, uniqueness, modularisation The quality of the tangible goods Awareness and valuation of the intangibles Unique skills that constitute the service offering

ServQual and

Benchmarking


Internal Client-server Relationships

Internal Server

Internal Server

Internal clientand server

Externalclient

Delight the customer


Customers as staff

self-service - flexibility in coping with demand.

separate front shop/back-room - enabled by technology. Shelf filling vs. wand goods into trolleys. Automatic self-service banking bank card payment at the petrol pump

remove the need for service attendants.

self-services open longer less waiting time cost reductions for the service provider lower prices

some customers miss the help and advice. become excluded - socially neglected

Where else can they to go?


Customer Contact and staffing

Less skilled staff?

More training required.

Loyalty & competence as key quality elements?

What do we mean by “customer contact”? Signs of inefficiency in customer contact?

Differentiate high - low contact services

Quality and failure costs. The service level must be delivered. Identify the levels and components that customers value

Cost the components and evaluate contribution of quality?

how much customers will pay?


Services and staff flexibility

Excess capacity or rely on PTs to balance capacity - demand? More PTs ==> increase in workforce size.

unfamiliar with products & systems, less skilled.

Labour turnover and reliability - Vicious circle.

Few hours, move on quickly - why train?

Need quality staff but investment not justified

So we live with unskilled, uncommitted staff.

Remedies? multi-skilling and rewards

back-room staff move to front shop at peak time

skeleton crew at the back

Success depends on sensitivity of backroom tasks


Guarantees and service-level agreements

Promise of service satisfaction underpinned by actions

Monitoring and controlling quantified standards

subjective standards - meaningful to customer

99% reliability

Pay-out/penalties on failure

Unconditional - no small print

Easy to understand and to communicate

Straightforward to invoke•Flight overbooked•Train late•ISP downtime


Well-Designed Service System

• Each element -consistent with operating focus

• user-friendly

• robust

• designed for consistent performance by staff & systems

• Seamless links between back & front office.

• evidence of service quality is visible - customers "see" the value provided. Credible?

• cost-effective.


Principles - Lyth and Johnston (1988)

balance service efficiency with requisite quality.

Focus on

intangibles within service package

the customer viewpoint

critical role of customer contact staff & how they are supported.

performance monitoring

internal consistency within the service system


L & J: Nine Service Design Principles

1. define service concept clearly & in detail.

2. evaluate image concept

good service labelled poor if image out of line with customer expectations

trace back to service presentation

3. study the customer view (be a customer)

manage expectations & perceptions during & after

break out of designer & operator "bounded rationality & familiarity".4. Top management commitment to service quality

Mission + clear objectives. Quality: inextricably linked to staff-customer contact. MbyExample: top mgt. lip-service undermines credibility

5. Define functional & technical quality standards

tangibles - as for physical products.

intangibles & subjective elements key ingredients in package e.g. cleaning, waiting, manner/appearance, skills share understandings, recruit, train & reward for delivery expectation.

ServQual


L & J: Nine Service Design Principles

6. examine existing procedures and systems

"re-design" to support front-end providers.

service the servers via back-room procedures & support7. develop standard procedures to control

bankers (routinise), semi-controllables & unpredictables

routines may not fit random events

if safety critical - allocate resources

emphasise training for the unexpected, communicate & empower8. systems must support the good service objectives.

treat customer service staff as internal customers. 9. implement standards & performance monitoring

Or drift, loose energy & deteriorate. inspection activities are essential action to restore and revitalise where needed. Inspection/feedback: SPC, surveys, panels, "mystery" shoppers

Service Design & Management

Business

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