Chapter 4BBT2435| TOUR OPERATION MANAGEMENT

Prepared by KAMELIA CHAICHI

Lecture outline

• INTRODUCTION

• Factors affecting SERVICE DELIVERY design

• DESIGNING the service delivery system

• Critical REFLECTIONS

• SUMMARY

Factors affecting service delivery system design

SERVICE COMPLEXITYTHE

MARKET

As services differ, so will the DESIGNS of their delivery systems

Characteristics of service operations

•MIX of services and products•INTANGIBLE nature•SIMULTANEOUS provision(stock) and

consumption•TIME-DEPENDENT capacity•CUSTOMERS can help deliver the

service•Need to MANAGE CUSTOMERS•No PATENTS (exclusive right to

design)Services are PROVIDED and CONSUMED at the same time. They CANNOT be stored

CASE 4.1TIPPING AS A

MEASURE OF CUSTOMER SERVICE

1.What makes up the total SERVICE OFFERING for a customer during an evening meal at a restaurant?

2.How could a HAIRDRESSER use these customer management approaches?

CASE 4.1

Question Answer

Service offering

Hairdresser

TIPPING AS A MEASURE OF CUSTOMER SERVICE

• EXPLICIT benefits- DINING experience- FOOD- DRINK• IMPLICIT benefits- PERSONALISED service- SPEED of service- GOODWILL gestures

• Adopt similar approach to delivering IMPLICIT benefits

Understanding how services differ

•Level of TECHNOLOGY used•NATURE of service being delivered- Complexity of service- What is being processed•TYPE of service being delivered- Professional, Service shop or Mass

service•BUSINESS requirements- Volumes- Order-winners and qualifiers

KEY DIFFERENCES

Understanding how services differ

-The delivery system processes CUSTOMERS, -CUSTOMER SURROGATES, PRODUCTS, -INFORMATION or some COMBINATION of these

Designing the service delivery system

1.Understand MARKET volumes, order-winners and qualifiers

• Identify the service ENCOUNTER and EXPERIENCE to be delivered

• Understand how to RETAIN customers

(Efficiency) : Actual output compared with the expected

output

Understanding how services differ

Overall design

•BACK OFFICE activities•FRONT OFFICE

activities

CUSTOMER INTERFACE (cooperation)

Service delivery

CASE 4.2

IMPROVING SERVICE DELIVERY THROUGH FRONT AND BACK OFFICE

CASE 4.2

Question Bank Electrical repair

Advantages

Disadvantages

• Higher EFFICIENCY- More activities in back office- Queues manage high demand • Higher delivery SPEED- Less activities in front office• Higher delivery RELIABILITY- Narrow range of activities in front

office

IMPROVING SERVICE DELIVERY THROUGH FRONT AND BACK OFFICE

• Higher WAIT- Queues manage high demand • Less CUSTOMISATION- Customers receive standard

service

• Higher CUSTOMISATION- Service tailored to customer

requirements

• Lower EFFICIENCY- More activities in front

office• Lower delivery SPEED- More activities in front

office• Lower delivery

RELIABILITY- Wider range of activities

in front- office

• No CUSTOMER CONTACT• Easier SCHEDULING• Higher processing VOLUMES

Back office

FRONT OFFICE

• FACILITIES represent organisation• Easier to manage QUEUE lengths• Involve CUSTOMERS in delivery• Wider STAFF ROLES

CUSTOMER INTERFACE

DELIVERY SYSTEM

Service delivery

• Number of STEPS- Single vs Multiple• TYPE of delivery system- Non-repeat vs Repeat- Low volume vs high

volume

CASE 4.3

SERVICE DELIVERY AT THE MOSCOW SCIENTIFIC INSTITUTE FOR EYE MICROSURGERY

1.What are the ADVANTAGES of this approach?

2.What are the DISADVANTAGES of this approach?

Question Answer

Advantages

Disadvantages

CASE 4.3

• Higher EFFICIENCY- Automated processes- Lower labour skill and cost• Higher delivery VOLUME- More operations can be completed

• Less CUSTOMISATION- Customers receive standard service• Less FLEXIBILITY- Delivers standard service- Significant investment required to increase

volume

Service delivery

Other factors• ENHANCING services• Use of IT in service delivery• CUSTOMER participation in service delivery

CASE 4.4

SERVICE DELIVERY AT A LOCAL HIGH STREET BANK BRANCH

1.What are the key ADVANTAGES and DISADVANTAGES of the bank’s approach?

2.What are the key ADVANTAGES and DISADVANTAGES of the post office’s approach?

Question Bank Post office

Advantages

Disadvantages

• Higher EFFICIENCY- Higher utilization of staff

skills • Higher delivery SPEED- For each individual service• Higher delivery RELIABILITY- Narrow range of activities in

each delivery system

• Lower delivery SPEED- If want more than one

service • Less CUSTOMISATION- Each service delivered

separately

• Higher delivery SPEED- If want more than one

service• Higher CUSTOMISATION- Service tailored to customer

requirements

• Lower EFFICIENCY- Skill must be more skilled• Lower delivery SPEED- If want more than one

service• Lower delivery RELIABILITY- Wider range of activities

being delivered

CASE 4.4

SERVICE DELIVERY AT A LOCAL HIGH STREET BANK BRANCH

CASE 4.5

PROVIDING PERSONAL SERVICE ONLINE AT GARDEN ESCAPE

1.What are the ADVANTAGES of shopping online?

2.What are the DISADVANTAGES of shopping online?

Question Answer

Advantages

Disadvantages

• For CUSTOMERS- Check PURCHASE HISTORY- Check TECHNICAL DETAILS on plants- Get answers to GENERAL QUERIES• For GARDEN CENTRE- Reduces STAFF COSTS- Allows customers to CUSTOMISE the service- Helps build and manage customer RELATIONSHIP

CASE 4.5

• For CUSTOMERS- May get INCORRECT ADVICE if ask wrong question• For GARDEN CENTRE- Customer can easily COMPARE PRICES with competitors- Customers can use services and then BUY ELSEWHERE

CASE 4.6

SELF-SCANNING IN SUPERMARKETS

1.Why are supermarkets INTRODUCING self-checkout systems?

2.Why do CUSTOMERS like these systems?

CASE 4.6

Question Answer

SUPERMARKET advantages

CUSTOMER advantages

SELF-SCANNING IN SUPERMARKETS

• Higher EFFICIENCY- Lower staff costs as need less • Easier to manage CAPACITY- Customers serve themselves

• Higher delivery SPEED- Customers don’t have to wait • EASE of use- Simple and easy to use• Higher CUSTOMISATION- Customers serve themselves

Insurance companyHospital

Different approaches to serving customers

The Hospital(1971)

The Incredibles

(2004)

Film clip Hospital

FilmTitleDirector (year)

The HospitalArthur Hiller (1971)

ClipStartFinish

00:23:1500:26:36

What clip shows How customers are served in a hospital

Key learning objective

The different skills required in the back office and front office functionsThe impact of a breakdown in communication between front office and back office

Different approaches to serving customers

Film clip Insurance company

FilmTitleDirector (year)

The IncrediblesBrad Bird (2004)

ClipStartFinish

00:11:3400:13:31

What clip showsHow customers are served in an insurance company

Key learning objective

The different skills required in the back office and front office functionsThe impact of always putting the customer’s needs first within a business

Different approaches to serving customers

Question Answer

SALLY’S approach

BOB’S approach

POINTS highlighted

• BACK OFFICE function - has to come to front office if not getting necessary information

• INTERNALLY FOCUSED on processes - blue cross number• NOT customer focused

Different approaches to serving customers

• FRONT OFFICE function• Highly CUSTOMER FOCUSED - almost too much• NOT internally focused

• Require DIFFERENT SKILLS in back and front office• Need to BALANCE customer and internal business needs

Critical reflections

• Service DELIVERY SYSTEMS must be:- ALIGNED to its market ORDER-WINNERS and

QUALIFIERS- REFLECT its internal BUSINESS requirements- INCORPORATE IT and other DEVELOPMENT

opportunities

• Customers become MORE PROFITABLE the longer you RETAIN them

Summary• Services have distinctive

CHARACTERISTICS- Intangible and perishable

• Service delivery systems must SUPPORT- Technical and business requirements

• TECHNICAL requirements- The service specification

• BUSINESS requirements- Volumes and market order-winners and

qualifiers

The service delivery system design will reflect:

- The complexity of the service being delivered

- The business and technical requirements that have to be met

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