III SEMESTER

BA9189 SERVICE OPERATIONS MANAGEMENT

ERVICE OPERATIONS MANAGEMENT

REGULATION 2009

SYLLABUS

UNIT – I INTRODUCTION 9 Importance and role of Services -Nature of services -Service classification Service Package Service Strategy -Internet strategies - Environmental strategies. UNIT – II SERVICE DESIGN 9 New Service Development - Designing the Service delivery system: Service Blue-printing - Managing Service Experience - Front-office Back-office Interface - Service scape – Implication for Service Design UNIT – III SERVICE QUALITY 9 Service Quality- SERVQUAL, -Gap Model -Complaint management - Walk-through Audit -Service Recovery - Service Guarantees - Service Encounter. UNIT – IV OPERATING SERVICES 9 Service operational planning and control -Process Analysis - Process Simulation -Service Facility Location -Capacity Management in Services – Queuing models - Waiting Lines – Simulation - Yield management. UNIT – V TOOLS AND TECHNIQUES 9 Inventory Management in Services – Retail Discounting Model - Newsvendor Model - Vehicle

Routing and Scheduling -Productivity and Performance measurement - Data Envelopment

Analysis (DEA) -Scoring System – Method for customer selection.

TEXT BOOKS 1. James A. Fitzsimmons, Mona J. Fitzsimmons, Service Management – Operations, Strategy, Information Technology, Tata McGraw – Hill Edition 2006.

2. Richard Metters, Kathryn King-Metters, Madeleine Pullman, Steve Walton Service Operations Management, South-Western, Cengage Learning, 2006. REFERENCES 1. Cengiz Haksever, Barry Render, Roberta S. Russell, Rebert G. Murdick, Service Management and Operations, Pearson Education – Second Edition.

2. Robert Johnston, Graham Clark, Service Operations Management, Pearson Education, 2005.

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Unit - 1

SERVICE DEFINITIONS:

“Services are Deeds, processes and performances.” (Valarie A. Zeithmal &

Mary Jo Bitner)

“A Service is an activity or series of activities of more or less intangible nature

that normally, but not necessarily, take place in interactions between customer and

service employees and/or physical resources or goods and/or systems of the service

provider, which are provided as

solutions to customer problems.” (Chritian Gronoos).

“A Service is a time-perishable, intangible experience performed for a

customer acting in the role of co-producer.” (James Fitzsimmons)

ROLE OF SERVICES:

The inter-dependency of the services and manufacturing sectors of the economy

Many service industries provide transportation, banking, advertising, repair or

communication in support of the manufactured goods.

The success of the manufacturing requires rapid feedback from the market place,

ability to customize products and fast delivery-all of which are dependant on

integration of down-stream services

Increasingly, the profitability of manufacturers depends on exploiting value added

services.

NATURE OF SERVICES

The distinction between a product and a service is difficult to make, because the

purchase of a product is accompanied by some facilitating service (eg. Installation)

and the purchase of a service often includes facilitating goods (eg. Food at a

restaurant)

Each purchase includes a bundle of goods and services (Refer table 2.1 in text book)

SERVICE CLASSIFICATION

The service classification scheme can help to organize and breakdown the industry

barriers to share the learning.

Roger Schmenner proposed the service process matrix (refer fig 2.1 in text book) In

this matrix, services are classified across 2 dimensions that significantly affect the

character of the service delivery process. The vertical dimension measures the

degree of labor intensity which is defined as the ratio of labor cost to capital cost.

Thus, Capital-intensive services such as airlines and hospitals are found in the

upper row because of their considerable investment in plant and equipment relative

to labor cost.

Labor-intensive services such as schools and legal assistance are found in the bottom

row, because their labor cost are high relative to their capital requirements.

The horizontal dimensions measures the degree of customer interaction and

customization, which is marketing variable that describes the ability of the customer

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to affect personally, the nature of service being delivered.

Service factories provide a standardized service with high capital investment, much

like a line-flow manufacturing plant.

Service shops permit more service customization, but they do so in a high-capital

environment.

Customers of a mass service will receive an undifferentiated service in a labor-

intensive environment, but those seeking a professional service will be given

individual attention by highly trained specialist.

SERVICE PACKAGE

It is defined as bundle of goods and services that is provided in some environment.

It consists of 5 features

Supporting facility.

Facilitating goods.

Information

Explicit services

Implicit services.

SERVICE STRATEGY

Service strategy is complicated by the diversity of service firms in the economy and

their differing customer relationship.

Strategic insights that transcend industry boundaries are needed to avoid the

myopic view, which is prevalent among Service Managers that concepts do not

translate from one industry to another. (Refer pg 26, fig. 2.3)

Service strategy must begin with a vision of the place and purpose of the enterprise.

A Strategic service vision is formulated by target market, service concept, operating

strategy and delivery system. (Refer pg. 40)

DATA ENVELOPMENT ANALYSIS (DEA)

The DEA Model.

It is a technique developed with the ability to compare the efficiency of multiple

service units that provide similar services by explicitly considering their use of

multiple inputs(i.e., resources) to produce multiple outputs (i.e., services) This

technique circumvents the need to develop standard costs for each service, because

it can incorporate multiple inputs and multiple outputs into both the numerator and

the denominator of the efficiency ratio without the need for conversion to a common

dollar basis.. Thus the DEA measure of efficiency explicitly accounts for the mix of

inputs and outputs and consequently, is more comprehensive and reliable than a set

of operating ratios or profit measures.

DEA is a linear programming model that attempts to maximize a service unit’s

efficiency, expressed as a ratio of outputs to inputs, by comparing a particular unit’s

efficiency with the performance of a group of similar service units that are

delivering the same service. In the process, some units achieve 100 percent efficiency

and are referred to as the relatively efficient units, whereas other units with

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efficiency ratings of less than 100 percent are referred to as inefficient units.

The DEA linear programming model is formulated according to Charnes, Cooper,

and Rhodes, and is referred to as the CCR Model.

Definition of Variables.

Let Ek, with k = 1,2,….,K, be the efficiency ratio of unit k, where K is the total

number of units being evaluated.

Let uj, with j = 1,2,…,M, be a coefficient for output j, where M is the total

number of output types considered. The variable uj is a measure of the relative

decrease in efficiency with each unit reduction of output value.

Let vj, with i = 1,2,…,N, be a coefficient for input i, where N is the total number of

input types considered. The variable vj is a measure of the relative increase in

efficiency with each unit reduction of input value.

Let Ojk be the number of observed units of output j generated by service unit k

during one time period.

Let Ijk be the number of actual units of input i used by service unit k during one

time period.

Objective Function

The objective is to find the set of coefficient u’s associated with each output and of

v’s associated with each input that will give the service unit being evaluated the

highest possible efficiency.

Max Ee = u1O1e + u2O2e + ……+ uMOMe

_________________________

(1)

v1I1e + v2I2e +…..+ vNINe

where e is the index of the unit being evaluated.

This function is subject to the constraint that when the same set of input and

output coefficients (uj’s and vi’s) is applied to all other service units being

compared, no service unit will exceed 100 percent efficiency or a ratio of 1.0

Constraints

u1O1k + u2O2k +………+ uMOMk <- 1.0 k = 1,2,…,K

(2)

___________________________

v1I1k + v2I2k +……+ vNINk

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where all coefficient values are positive and non-zero

To solve this fractional linear programming model using standard linear

programming requires a reformulation. Note that both the objective function and

constraints are ratios rather than linear functions. The objective function in

equation (1) is restated as a linear function by arbitrarily scaling the inputs for the

unit under evaluation to a sum of 1.0

Max Ee = u1O1e + u2O2e + ……+ uMOMe

(3)

subject to the constraint that

v1I1e + v2I2e +…..+ vNINe = 1

(4)

For each service unit, the constraints in equation (2) are simply reformulated :

u1O1k + u2O2k +………+ uMOMk – (v1I1k + v2I2k +……+ vNINk) <- 0

k+1,2,...,k (5)

where

uj >- 0 j = 1,2,…,M

vi >- 0 i = 1,2,…,N

A question of sample size often is raised concerning the number of service units that

are required compared with the number of input and output variables selected in

the analysis. The following relationship relating the number of service units K used

in the analysis and the number of input N and output M types being considered is

based on empirical findings and the experience of DEA practitioners:

K >- 2 (N +M)

IMPACT OF THE INTERNET ON SERVICE LOCATION:

With a introduction of the internet in the mid-1990s, the potential for

electronic commerce has become a reality- customers shop from a desk at home and

surf at home and surf the web for interesting home pages to visit.

A Web site has become the virtual location of pure e-commerce firms (e.g.

Amazon.com) or an alternative channel of distribution for established click-and-

mortar retailers.(e.g. Barnes & noble)

The limits of a market area once defined by how far a customer would travel

to the site, but physical travel is irrevalent in the virtual world of internet.

This aspect of a business is now driven by access to overnight shippers (e.g.

Fedex)

Internet providers of electronic services, such as brokers are less reliant on

physical offices, and the location of an auction facilitator can be based on personal

preference of the owners or on access to talented employees.

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UNIT-2

NEW SERVICE DEVELOPMENT

Innovation is viewed both a process of creating something new as a actual product

or outcome.

For services, the outcome need not be a new service product, but rather some degree

of modification to an existing service. (Refer table 4.1) Classification of service

innovations within 2 major categories:

Radical innovations or offerings not previously available to customers

or new delivery systems for existing services.

Incremental innovations are changes to existing services that are

valued as improvements

SERVICE DESIGN ELEMENTS

The service design elements become a blue-print that communicates to customers

and the employees alike what service they should expect to give and to receive.

These system elements are:

Structural & Managerial (refer pg .81)

SERVICE BLUE PRINTING:

Introduction : When a building is developed, the design is captured on architectural

drawings called BLUE PRINTS, because the reproduction is printed on special

paper, creating blue lines. These blue prints show what the product should look like

and all specifications needed for its manufacture. Service blue print is a map or

flowchart of all the transactions constituting the service delivery process.

(Refer the diagram in text book) At the top “physical evidence” that customers will

see and experience.

Activities above the line of interaction are customer initiated steps, choices and

interactions the customer performs in the process of purchasing, consuming and

evaluating the service.

Any vertical flow line crossing the line of interaction depicts a direct contact

between the customer and the organization (Refer diagram in text book)

Above the line of visibility are actions in full view of the customer and thus on stage.

Below the line of visibility are activities that are back-staged and not seen by the

customer such as taking food orders over the telephone.

Below the line of internal interaction, we find the support processes that generate

questions concerning the capacity requirements of these back office systems, such as

Reservation Information system and Kitchen.

Finally, the position of the line of visibility in a service blue print can immediately

signal the level of involvement of the customer in the service delivery process.

STRATEGIC SERVICE VISION

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The purpose and place of a service firm in a market begins with an

entrepreneur’s idea and an unmet need.

To formulate a strategic service vision, the basic categories include service

delivery system, operating strategy, service concept, and target market

systems

Target market segments: Market to inter-state travelers with carry-on

luggage who are currently driving by auto and/or are frustrated by the poor

service of the major airlines.

Service concept : On-time performance and frequent departures are critical

and meals are un-necessary on these short flights (less than one hour)

Operating strategy : Airport gate turn around must be fast to make

productive use of aircraft and provide frequent departures

Service Delivery System: Cabin crews will be those who have the inter-

personal skills to create the fun atmosphere abroad the aircraft. No assigned

seating will facilitate fast gate turn around and simplify ticket sales.

SERVICESCAPE

The physical environment or servicescape of the supporting service facility

influences both customer and employee behavior and should be designed with an

image and feel that is congruent to a service concept. A typology of servicescapes

shown in the figure (Refer textbook) organized according to who participates within

the service environment and degree of complexity of the servicescape.

The servicescape for a self service operation plays a central role in guiding customer

behavior through the use of signage and intuitive design of interfaces.

For remote services, employee satisfaction, motivation and operational efficiency

are the primary physical design objectives because customers do not visit the site

physically.

Interpersonal services are the most challenging because social interactions between

employees and customers and among customers should be facilitated by the

servicescape.

SERVICESCAPE FRAMEWORK

As shown in the figure (pg. 225)

A mix of environmental dimensions consisting of ambient conditions, space/function

and signs/symbols/artifacts describes the servicescape, which is viewed as a holistic

environment by customers and employees.

The internal response measured cognitively, emotionally and physiologically is

moderated by one’s personal mood and tendency to seek or avoid arousal.

Arousal-seekers enjoys and look for high levels of stimulation (eg. a bright & loud

disco), whereas arousal-avoiders prefer lower levels of stimulation (e.g. a quiet

museum). The servicescape is designed to involve social interaction between and

among customers and employers.

A well-conceived servicescape will encourage an approach behavior for both

employees and customers.

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COMPETITIVE SERVICE STRATEGIES: Michael porter has given three generic competitive

strategies exist – Overall cost leadership strategy, differentiation, & focus.

OVERALL COST LEADERSHIP:

-An overall cost leadership strategy requires efficient- scale facilities, tight

cost & overhead control, & often innovative technology as well.

- Having a low-cost position provides a defense against competition, because

less efficient competitors will suffer from competitive pressures.

- Implementing a low-cost strategy usually requires high capital investment in

state-of the art equipment, aggressive pricing, &

Start-up losses to build market share.

- A cost leadership strategy can revolutionize an industry, by the success of

McDonald’s, Wal-mart& Federal Express.

- Service firms have been able to achieve low-cost leadership using a variety of

approaches.

SEEKING OUT LOW-COST CUSTOMERS:

Some customers cost less to serve than others, and they can be targeted by the

service provider. For eg: United States Automobiles Association (USAA) Occupies a

preeminent position among automobile insures because it servers only military

personnel & their families.

This group entails lower cost because its members, who are relatively nomadic, are

willing to do business by telephone, mail, or online are accustomed to doing so.

Example: Sam’s Wholesale Club & Costco, which target customers, are willing to

buy in quantity, do without frills, and serve themselves.

STANDARDIZING A CUSTOM SERVICE: - Typical, income tax preparation is considered to be a

customized service.

- Legal services and family health care centers are attractive

means of delivering routine professional services at low cost. The key

word is “routine”.

REDUCING THE PERSONAL ELEMENT IN SERVICE DELIVERY:

- The potentially high-risk strategy of reducing the

personal element in service delivery can be accepted

by customers if increased convenience results.

- For e.g. convenient access to ATM’s has weaned

customers from personal interaction with live tellers,

has reduced transaction costs for banks.

REDUCING NETWORK COSTS:

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- Start-up costs are encountered by service firms that

require a network to knit together providers&

customers.

- Electric utilities which have substantial fixed costs in

transmission lines provide the most obvious.

- For example: Federal Express conceived a unique

approach to reducing network costs by using a hub-

and-spoke network. The overnight air package carrier

was able to serve the US with no direct routes

between all the cities served. The efficiency of the hub-

and-spoke network strategy has not seen passenger

airline operator

TAKING SERVICE OPERATIONS OFFLINE:

-Many services such as haircutting& passenger transportation

are inherently “online” because they can only be performed with the customer

present.

- For services, in which the customer need not be present

transaction can be “decoupled” with some content performed

“offline”

-For example: American Airlines has one of its 800- number

reservations centers located in the carribbean,& absence of the customer in the

system. Decoupled service operation is run like a factory.

DIFFERENTIATION:

The essence of the differentiation strategy lies in creating a service

.i.e. perceived as being unique.

Approaches to differentiation can take many forms: Brand-image(Mcdonald’s

golden arches)

Technology (sprint’s fiber optics network)

Features (American Express)

Customer service ( Aqua guard).

Dealer network. & other dimensions.

* A Differentiation strategy does not ignore costs, its primary thrust

lies in creating customer loyalty.

* Differentiation to enhance the service often is achieved at some

cost that the targeted customer is willing to pay.

MAKING THE INTANGIBLE TANGIBLE:

- Services Often are Intangible and leave the

customer with no physical reminder of the purchase.

- Recognizing the need to remind customers of their

stay, many hotels now provide complimentary toiletry

with the hotel name prominently affixed.

CUSTOMIZING THE STANDARD:

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Providing a customized touch may endure a firm to its customers at very little cost.

A hotel operator who is able to address a guest by name can make an impression

that translates into repeat business.

Hair salons have added many personalizing features to differentiate themselves

from barber shops.

Burger King’s efforts to promote a Made-To-Order policy are an attempt to

differentiate itself from McDonald’s classic make-to-stock approach to fast-food

service.

REDUCING PERCEIVED RISK:

Lack of customers about the purchase of a service creates a sense of risk-taking for

many customers.

Lacking knowledge or self-confidence about services such as auto repair, customers

will seek out providers who take the extra time to explain the work to be done,

present a clean & organized facility, and guarantee their work.

Customers often see the “peace of mind” .i.e. engendered when this trusting

relationship develops as being worth the extra expense.

GIVING ATTENTION TO PERSONAL TRAINING:

- Investment in personal development and training that

result in enhanced service quality is a competitive

advantage .i.e. difficult to replicate.

- Firms that lead their industries are known among

competitors for the quality of their training programs.

- These firms have established college like training

center

CONTROLLING QUALITY:

- Delivering a consistent level of service quality at multiple

sites with a labor- intensive system is a significant challenge.

- Firms have approached this problem in a variety of ways,

including personnel training, explicit procedures, technology, limits on the scope of

the service, direct supervision , peer pressure, among others.

FOCUS:

The focus strategy is built around the idea of servicing a particular target market

very well by addressing customer’s specific needs.

The market segment could be a particular buyer group, service (federal express)or

geographic region.

The focus strategy rests on the premise that the firm can serve its narrow target

market more effectively & efficiently than other firms trying to serve a broad

market.

As a result, the firm achieves competitive advantage in its market segment by

meeting specific customer needs or by lower costs through specialization.

Thus, the focus strategy is the application of differentiation or overall cost

leadership to a particular market segment rather than the entire market.

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WINNING CUSTOMERS IN THE MARKETPLACE:

Depending on the competition and personal needs, customers select a

service provider using criteria listed:

Availability: The use of ATM’s by banks has created 24-hour availability of

some banking services. .i.e. .service beyond the traditional “bankers” hours.

Convenience: The location of the service defines convenience for customers

who must travel to that service. e.g.: Gasoline stations, fast-food service& dry

cleaners.

Dependability: How reliable is the service? Eg. A major complaint regarding

automobile repair services is the failure to fix the problem on the first visit.

Personalization: Are you treated as an individual? For eg: Hotels have

discovered that repeat customers respond to being greeted by their name. The

degree of customization allowed in providing the service, no matter how slight,

can be viewed as more personalized service.

Price: Competing on price is not as effective in services as it is with products,

because it often is difficult to compare the costs of services objectively.

Quality: Service quality is a function of the relationship between a customer’s

prior expectations of the service.

Unlike product quality, service quality is judged by both the process of service

delivery and the outcome of the service.

PROCESS STRUCTURE:

Preparing the service blueprint is the first step in developing a service process

structure that will position a firm in the competitive market.

Decisions still remain on the degree of complexity and divergence desired in the

service.

The steps and sequences in the process captured by the service blueprint and

measured by the number and intricacy of the steps represent the “degree of

complexity” of the service delivery structure.

The amount of discretion or freedom that the server has to customize the service is

the degree of divergence that is allowed at each service process.

The two dimensions of complexity and divergence, for example, allow us to create a

market-positioning chart for the financial services industry.

For example: A hair-styling salon for men represents a high-divergence strategy

reshaping the traditional barbering industry. High-divergence is characterized as a niche strategy that seeks out customers who

are willing to pay extra for the personalization.

Narrowing the scope of a service by specializing is a focused strategy that results in

low complexity.

Retailing recently has seen an explosion of specialty shops selling only one product,

such as strategy to succeed, the service or product must be perceived as being

unique or of very high quality.

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To gain greater market penetration or maximize the revenue from each customer, a

strategy of adding more services can be initiated, by creating a structure with high

complexity.

For eg: super markets have evolved into super stores through the addition of

banking services, flower shops, books, food preparation.

Repositioning need not be limited to changes in only one dimension of the process

structure. (Level of divergence or complexity)

SERVICE CONCEPT

Service is render for profit purpose and non-profit purpose.

e.g.: Bank, Airlines, and schools.

Service is directed to customer’s possessions, money property, business users-

advertisers, and insurances.

Service can be performed by individuals (household work) machines (ATM)

,Individuals& machines (taxi).

Service is actually deed or performance.

Introduction:

Services are usually perceived as intangible, invisible, perishable and

requiring simultaneous production and consumption.

While goods are tangible, visible and storable and don’t require direct

interaction between the producer and the consumer

Definition:

“ A service is an act or performance of an essentially intangible nature that

doesn’t result in the ownership of a tangible product or commodity, but

serves to create value and benefits for the customer ”

Characteristics of services

Services are

Intangible

Invisible

Perishable

Heterogeneous in nature

Cannot be separated by service providers

Requires simultaneous production and conception

Nature of services

Divided into 3 categories

• Degree of tradability

(Embodied service/pure service)

• Service directed towards individuals or things.

• Degree of merchantability (High/Medium/Low)

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Classification of Service:

List of services are

1. Retailing and whole selling

2. Transportation, distribution and storage

3. Banking and insurance

4. Real estate

5. Communication & info services

6. Public Utilities, Govt. & Defence

7. Healthcare

8. Business, Professional & personnel services

9. Recreational & Hospitality services

10. Education

11. Other Non-profit organization

Service Package Model

According to the service package model, the service as the product is

described as a package or bundle of different services, tangibles and

intangibles, which together form the total product.

The package is divided into two main categories: the main service, which

often is called the "core service" or "substantive service and auxiliary

services or "extras," which often are referred to as peripherals" or

“peripheral services" sometimes also as "facilitator services"

Eg: A hotel service may include the lodging element as the main or core

service, and reception service, valet service, room service, restaurant

services, and the concerned as auxiliary services or peripherals in the

package.

Managing the Service Offering

Based on a well-defined customer benefit concept, which states which benefits or

bundle of benefits customers seek or would appreciate, managing the service

offering requires four steps:

Developing the service concept

Developing a basic service package

Developing an augmented service offering

Managing perception (image and communication)

The Basic Service Package:

A distinction between core services and peripheral services is often made.

However, for managerial reasons, it is necessary to make a distinction among

three groups of services:

Core service;

Facilitating services (and goods)

Supporting services (and goods

Differential

The core service is the reason for being on the market. For a hotel it is

lodging and for an airline, transportation. A firm may also have many core

services. In order to make it possible for customers to use the core service

some additional services are often required. Reception services are needed in

a hotel, and check-in services are required for air transportation. Such

additional services are called facilitating services, because they facilitate the

use of the core service.

The third type of services are called supporting services. These, like

facilitating services, are also auxiliary services, but they fulfill another

mission.

Supporting services do not facilitate the consumption or use of the core service,

but are used to increase the value and/or to differentiate the service from the

services of competitors.

COMPONENTS OF SERVICE:

Physical product: It is a tangible and physical real product eg: computer, cars.

Service product: It refers to the core performance that is purchased by the customer

eg: car with strong service.

Service Environment: Physical background that refers to the service eg: ambience,

spacious layout.

Service delivery: It is how the service is actually working out, when the customer

buys.

GROWTH OF A SERVICE SECTOR

Service sector has emerged as field of study only after 1980’s.

When service industries have gained more importance in the economy,

Due to their largest share or contribution in the GDP and GNI of the nation.

There are four factors: demographical, economic, social,

Political & legal changes.

MARKETING STRATEGIES

Intangibility: lack of tangible assets that can be seen,touched,or smelled prior to the

purchase.

The strategies are: stressing tangible cues.

Using personal sources of information.

Stimulating word-of-mouth communication.

Creating a strong corporate image.

Encouraging employees to communicate with customers.

Perish ability

Inability of a service to be inventoried or stored.

Services must develop strategies to cope with fluctuating demand.

This goal can be accomplished by making simultaneous adjustments in

demand, supply and capacity.

Demand=supply=capacity.

ENVIRONMENT STRATEGIES

Environment strategies towards developing and maintaining sustainable

relationship differ from one organization to another depending on certain

factors.

1. Nature of business:(service provider, aqua water company.)

2. Its size:(provision stores,departmentstores)

UNIT-II

SERVICE DESIGN:

INDUSTRIALIZATION IN MANUF&SERVICES.

Service sector is more difficult than for manufacturing because of the

characteristics of intangibility, perish ability, inseparability, & variability.

Tangibility allows manufacturers to produce goods at factories then sell them

to consumers.

Because services are intangible, they cannot be mass produced.

Goods can be inventoried &stored after production; services cannot because

of perish ability.

The separation of production &consumption allows producers of goods to

use mass production and economies-of-scale. Because services &consumers

of services of services are inseparable, they cannot be produced until the

consumers are ready to consume them.

Providing consistent quality is difficult for services because of the

characteristic of variability.

New Service Development Fundamentally, there are no differences between service and manufacturing

operations! Both are concerned with:

Efficiency

Effectiveness

Quality

Cost

Service Blueprinting:

SERVICE DELIVERY

Availability of service (one site, multiple site)

Nature of delivery(continous,discrete)

Type of consumption (independent,collective,both).

Allocation of capacity

(reservation, order-of- arrival ,preferential).

SERVICE PACKAGE:

It is defined as a bundle of goods and services that is provided in some

environment.There are five features.

Supporting facility:(hospital)

Facilitating goods:(consumed by the buyer)

Information(include patient medical records)

Explicit services(absence of pain after a tooth is repaired)

Implicit services(worry-free auto repair)

EVALUATING THE PACKAGE:

Supporting facility:-location, interior decorating ,supporting equipment

,architectural appropriateness, facility layout.

Facilitating goods:-consistency, quantity ,selection.

Explicit services :training of service personnel ,comprehensiveness, consistency

,availability.

Implicit services :attitude of service ,atmosphere, waiting, status ,sense of well-

being, privacy and security ,convenience.

NATURE OF SERVICE ACT:

PEOPLE

THINGS

Services directed at people’s

bodies: Healthcare,

Beauty,Restaurants.

Services directed at goods and

other physical possessions :

Repair & Maintenance,

Veterinary care.

Services directed at people’s

minds: Education, Theaters,

Museums.

Services directed at intangible

assets : Banking, Accounting.

RELATIONSHIP WITH CUSTOMERS

Type of Relationship between Service Organization

& its Customers Vs Nature of Service Delivery.

CONTINUOUS DELIVERY OF SERVICE

DISCRETE

TRANSACTIONS

Strategic Service Vision

The purpose and place of a service firm in a market begins with an entrepreneurs

idea and an unmet need.

To formulate a strategic service vision, the basic categories include service delivery

system, operating strategy, service concept, and target market systems

Target market segments : Market to inter-state travelers with carry-on luggage who

are currently driving by auto and/or are frustrated by the poor service of the major

airlines.

Service concept : On-time performance and frequent departures are critical and

meals are un-necessary on these short flights (less than one hour)

MEMBERSHIP RELATIONSHIP :

INSURANCE,BANKING.

NO RELATIONSHIP :

RADIO STATION,

LIGHT

HOUSE,PUBLIC

HIGHWAY.

LONG-DISTANCE PHONE

CALLS, AIRLINE FREQUENT

FLYER.

TOLL HIGHWAY,

PAY PHONE.

Operating strategy : Airport gate turn around must be fast to make productive use

of aircraft and provide frequent departures

Service Delivery System : Cabin crews will be those who have the inter-personal

skills to create the fun atmosphere abroad the aircraft. No assigned seating will

facilitate fast gate turn around and simplify ticket sales.

UNIT-III

Service Facility Location Planning:

Flexibility: of a location is a measure of the degree to which the service can react to

changing economic situations. Therefore, in location decisions plan for future

economic changes and portfolio effect.

Competitive positioning: refers to methods by which the firm can establish itself

relative to its competitors. Multiple location or prime location can be barrier to

entry.

Demand management: it is the ability to control the quality, quantity, and timing of

demand. For example, a hotel can control demand by locating near a diverse set of

market generators that supply a steady demand .

Focus: can be developed by offering the same narrowly defined service at many

locations.

Geographic Representation:

Location options and travel distance can be represented on either a plane (flat

surface) or a network.

Plane provides infinite possibilities – you can move in any direction represented by

XY coordinates (sometimes called the latitude and the longitude). Distance between

locations is measured in two ways:

Euclidian metric or vector – using Pythagorean theorem

Metropolitan method – more like a grid travel in a city, where we move at

right angle.