Service Design and Management

nullnullOverviewOverviewDefining "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?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 byService – defined byTangible 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 processingProduct, information and service processingWhere 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 MixProduct Service Mix100%75%50%25%0%100%75%50%25%GoodsServicesPlace and approachPlace and approachPlace/virtual/remote Facilities-based Field-based Internal (client-server) Approaches production line self-service personal attention High and Low contact Service Design QuestionsService Design QuestionsWho 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 offeringsService MatrixService MatrixInteraction & CustomisationLowHighLowHighEasyJet DHL/FedEx Motel Golf courseRetailing Wholesaler Driving school Retail bankSolicitor Doctor Personal trainer Accountant ArchitectHospital? Internet banking Repair servicesLabour intensityBanking - High/Low contactBanking - High/Low contactLowHighFacility location Facility layout Product design Process design Scheduling Capacity planning Staff skills Quality control Time standards Wages Capacity planningNear 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 villainsHeroes and villainsFurious litigationComplainantDissatisfiedSatisfiedDelightedVillainsHeroesRecovery planningClub Class memberWhat is ServQual?Operating FocusOperating FocusCustomer 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, rooferStaff, Operations, Innovation and ContactStaff, Operations, Innovation and ContactService Design, Quality and Intangibles 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 may simplify & 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 IssuesService Design IssuesA. 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 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". Engineering Strategies for ServicesEngineering Strategies for ServicesFront shop/Back room service 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 deskThe Holiday to Aghios NikoliosThe Holiday to Aghios NikoliosThe 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 homeFail-safe Services - Poka-Yoke methodsFail-safe Services - Poka-Yoke methodsAvoid mistakes becoming service defects Apply fail-safe methods to 3T? Physical and visual warningsWas task done correctly?What was attitude and responsiveness of staff?What tangibles or environmental features were missing??Air Travel Service ElementsAir Travel Service ElementsLeave AirportCollect BagsArrives at airportRequest flight informationMake reservationCheck inProceed to gate & security checkBoard aircraftIn-flight serviceLeave aircraftPoke Yoke Exercise: Filling in the missing detailsGaffs - Mea Culpa?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 etcStrategy: Focus & Advantage - Performance PrioritiesStrategy: Focus & Advantage - Performance PrioritiesProduct/service innovation Cost 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 offeringServQual and BenchmarkingInternal Client-server RelationshipsInternal Client-server RelationshipsInternal ServerInternal ServerInternal client and serverExternal clientDelight the customerCustomers as staff 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 staffingCustomer Contact and staffingLess 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 flexibilityServices and staff flexibilityExcess 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 agreementsGuarantees and service-level agreementsPromise 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 invokeFlight overbooked Train late ISP downtimeWell-Designed Service SystemWell-Designed Service SystemEach 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)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 PrinciplesL & J: Nine Service Design Principles1. 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. ServQualL & J: Nine Service Design PrinciplesL & J: Nine Service Design Principles6. examine existing procedures and systems "re-design" to support front-end providers. service the servers via back-room procedures & support 7. 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 & empower 8. 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