Services Chapter 5

Chapter 5
The Service Delivery Process
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 management designs skill out of the work

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

Stage
the
3: Distinctive Competencies Achieved

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

Stage
4: World Class Service Delivery
companys name is synonymous with service excellence become a fast learner and innovator
technology
provides a means to accomplish tasks that the competition cannot duplicate
Marketing and Operations: Balance is Critical
The marriage of customer needs with the manufacturing and technological capabilities of the firm The marriage involves compromise
customer needs can seldom be met completely and economically
Success in service marketing demands a much greater understanding of the constraints and opportunities posed by operations
Thompsons Perfect-World Model

Perfect-World
Model
To operate efficiently, a firm must be able to operate as if the market will absorb the single kind of product at a continuous rate and as if the inputs flowed continuously at a steady rate and with specified quality
The Focused-Factory Concept

An
operation that concentrates on performing one particular task in one particular part of the plant for promoting experience and effectiveness through repetition and concentration on one task necessary for success
Used
10
The Plant within a Plant Concept

PWP
An
Concept
operation that that breaks up large, unfocused plants into smaller units buffered from one another so that they can each be focused separately buffer environmental influences by surrounding their technical core with input and output components
Organizations
11
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

1.
12
Isolate the technical core

Different
management philosophies should be adopted for each unit of operation technical core should be subjected to production-ling approaches high contact areas should sacrifice efficiency in the interest of the consumer
13
Possible Solutions to Service Operation Problems

2. 3. 4. 5.
Production-lining the whole system Creating flexible capacity Increasing customer participation Moving the time of demand
14
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
Figure 5.3 Blueprint for Cafeteria-Style Restaurant
15
16
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
17
Blueprinting and New- Product Development
Complexity--the number and intricacy of steps
Specialization strategy
decreases
by
Penetration strategy
increases
by
reducing the number of steps in the process it unbundles the service offering increasing the number of steps
complexity
complexity
18
Blueprinting and New- Product Development
Divergence--degrees of freedom in decision making
Volume-oriented strategy (production-line)

decreases
produces
Niche
costs but does so at the expense of increasing conformity and inflexibility
standardized output and reduces
divergence
increases
Tailor
positioning strategy
divergence
the service experience to each customer

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Chapter 5

The Service Delivery Process

Stages of Operational Competitiveness

Four Stages of Operational Competitiveness

1: Available for Service

Four Stages of Operational Competitiveness

Four Stages of Operational Competitiveness

3: Distinctive Competencies Achieved

Four Stages of Operational Competitiveness

4: World Class Service Delivery

provides a means to accomplish tasks that the competition cannot duplicate

Marketing and Operations: Balance is Critical

customer needs can seldom be met completely and economically

Thompsons Perfect-World Model

The Focused-Factory Concept

The Plant within a Plant Concept

Applying Efficiency Models to Services

varies day to day, hour to hour, minute to

problems in capacity planning and utilization

Possible Solutions to Service Operation Problems

Isolate the technical core

Possible Solutions to Service Operation Problems

essentially a flowchart that shows lines visibility

Figure 5.3 Blueprint for Cafeteria-Style Restaurant

Components of a Service Blueprint

Blueprinting and New- Product Development

Complexity--the number and intricacy of steps

Blueprinting and New- Product Development

Divergence--degrees of freedom in decision making

Volume-oriented strategy (production-line)

costs but does so at the expense of increasing conformity and inflexibility

standardized output and reduces

the service experience to each customer

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