Chap005.ppt Service Process Design
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Transcript of Chap005.ppt Service Process Design
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McGraw-Hill/Irwin The McGraw-Hill Companies, Inc. 2007, All Rights Reserved 5-1
Service Process Design
Chapter 5
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Chapter 5: Outline
Defining ServiceService Guarantees/service recovery
The Service-Product BundleCycle of ServiceCustomer Contact
Service MatrixService/Profit Chain
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The Shiftto Services
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Services in Europe
The Service Sector accounts for
about 70 percent of the Europeaneconomy.
Source: Wall Street Journal, 4 March 2005, p. A13
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Definition of ServiceKey Concepts
No finished goods inventoryIntangibility of the product
Simultaneous production and consumptionDifficulty in defining and measuring qualityand productivityOther Differences between Manufacturing andService ( See Table 5.1 )
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Production of Services vs. GoodsTypical Differences
Services are process focused.
Customers served as first come, first served.Labor is scheduled, not the customer.
Location often near customers.
Result: service production tends to be less
efficient than production of goods.
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Related Concepts
Service guarantee
Analogous to a guarantee for a product
Requires specific criteria and responses
Service Recovery
What you do to compensate the customer for badservice.
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The Service/Product Continuum
Pure Service
No product with intrinsic value involved. e.g. lawyer
Service/Product bundle Combination of product with service (most common)
Pure Product
Very rare. Yard sale. Blacksmith.
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Service-Product Bundles
The Service-Product Bundles has three parts:
physical goods (facilitating goods) whatyou can carry away
tangible service (explicit service) what theseller does for you.
psychological service (implicit service) how you feel about it.
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Comparison of Goods and Services ( Figure 5.1 )
100% 75% 50% 25% 0% 100%75%50%25%
Self-service groceries Automobile
Installed carpetingFast-food restaurant
Gourmet restaurant
Auto maintenanceHaircut
Consulting services
Goods Services
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Moments of TruthMoment of Truth = customer contact with aservice system.Service is defined as the cumulative effectof all the moments of truth.One failed moment of truth can causefailure of the entire service.
Therefore, service systems must bedesigned as a whole, not in parts.
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Moments of Truth
Examples from book:
SAS airlines has 50,000 moments of truth per day.Marriott hotels has 6,000,000 momentsof truth per day.
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Cycle of Service for an Airline (Figure 5.2)
Leaves Airport
ReceiveBaggage Arrives at
airport
Customer requestsschedule information
Makesreservation
Checksbaggage andchecks in for flight
Proceeds to gateand security check
Receivesboarding pass
Boardsaircraft
Receivesin-flightservice
DepartsPlane
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Customer Contact (1)
Definition of contact interaction between service provider and the customer.Each moment of truth is a contact.
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Customer Contact (2)Potential inefficiency in services is a function of
the amount of customer contactWhy? Customer determines the time Customer determines the order of service Customer influences what happens during the
service
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Customer Contact (3)High contact ( front room ) services Direct customer contact Customer has control of process
Low-contact ( back room ) services Out of sight of customer Provider has control of process
Goal: move as much activity as possible tothe back room why?
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Service Matrix (Figure 5.3)
Low High
Low
High
Service factory Airlines TruckingHotelsResort andrecreation
Degree of Interaction and Customization
Mass servicesRetailingWholesalingSchoolsRetail aspects of commercial banking
Professional ServicesLawyersDoctors
Accountants Architects
Service shopHospitals Auto repair Repair services
D e g r e e o
f L a
b o r
i n t e n s i
t y
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Links in the service-profit chain
(See Figure 5.4)Internal service quality, leads to Employee satisfaction, leads to Employee retention & productivity, lead to External service value, leads to Customer satisfaction, leads to Customer loyalty, leads to Revenue growth & profitability (the goal)
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Summary
Defining ServiceService Guarantees/service recovery
The Service-Product BundleCycle of ServiceCustomer Contact
Service MatrixService/Profit Chain
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End of Chapter Five