You are on page 1of 33

Design of Services

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved.
Service Design Definitions

Service
Something that is done to, or for, a
customer
Service delivery system
The facilities, processes, and skills needed
to provide a service
Product bundle
The combination of goods and services
provided to a customer
Service Design

Begins with a choice of service strategy, which


determines the nature and focus of the service, and
the target market
Key issues in service design
Degree of variation in service requirements
Degree of customer contact and involvement
Characteristics of Services
(1 of 3)
1. Services are acts, they are intangible but highly
visible to the customers
2. Most services contain a mix of tangible and
intangible attributes
3. Services have customer contact
4. Service performance can be affected by workers
personal factors
5. Services are created and delivered at the same time
and are not consumed but experienced, cannot be
inventoried.
Characteristics of Services
(2 of 3)
6. Services are idiosyncratic
7. Everyone is an expert on service
8. In service business quality of work is not quality of
service
9. Services have low barriers to entry
10. Services are perishable
11. Location is important for service
Characteristics of Services
(3 of 3)
12. Services are inseparable from delivery
13. Service requirements are variable
14. Services tend to be decentralized and dispersed
15. Services are consumed more often than products
16. Services can be easily emulated
17. Services often take the form of cycles of encounters
involving face-to-face, phone, Internet,
electromechanical, and/or mail interactions
Service Businesses
A service business is the management of
organizations whose primary business requires
interaction with the customer to produce the
service

Facilities-based services: Where the customer


must go to the service facility

Field-based services: Where the production and


consumption of the service takes place in the
customers environment
Internal services are the
ones that are required to
Internal Services support the activities of
the larger organization.
Services including data
processing, accounting,
etc

Internal Supplier
Internal
Customer
External
Customer

Internal Supplier
Service Demand Variability
Demand variability creates waiting lines and idle
service resources
Service design perspectives:
Cost and efficiency perspective
Customer perspective
Attempts to achieve high efficiency may
depersonalize service and change customers
perception of quality
Customer participation makes quality and demand
variability hard to manage
Differences Between Product and
Service Design (1 of 2)

Service design often focuses more on


intangible factors
Less latitude in finding and correcting errors
before the customer, so training & process
design are important
As services are noninventoriable, capacity
issues are very important
Differences Between Product and
Service Design (2 of 2)
Services are highly visible to consumers and
must be designed with that in mind
Some services have low barriers to entry and
exit, so service design has to be innovative
and cost-effective
As convenience is a major factor, location is
important to service design
Service design with high customer contact
generally requires inclusion of the service
delivery package
Service Delivery System
Components of service delivery system:
Facilities
Processes
Skills
Service Design

Service design involves


The physical resources needed
The goods that are purchased or
consumed by the customer
Explicit services
Implicit services
Performance Priorities in Service
Design
Treatment of the customer
Speed and convenience of service delivery
Price
Variety
Quality of the tangible goods
Unique skills that constitute the service offering
Phases in Service Design

Conceptualize
Identify service package components
Determine performance specifications
Translate performance specifications into
design specifications
Translate design specifications into delivery
specifications
Three Contrasting Service Designs
The production line approach (ex. McDonalds)

The self-service approach (ex. automatic teller


machines)

The personal attention approach (ex. Ritz-


Carlton Hotel Company)
The Service Design Process
Desired service
experience
Service Concept Service Package
Targeted
customer Physical Sensual Psychological
items benefits benefits

Performance Specifications

Customer Customer
requirements expectations

Design Specifications Service


Customer
Provider

Provider Cost and time


Activities Facility
skills estimates

Delivery Specifications

Schedule Deliverables Location

Service
Service Systems

Service systems range from those with little or no


customer contact to very high degree of customer
contact such as:
Insulated technical core (software development)
Production line (automatic car wash)
Personalized service (hair cut, medical service)
Consumer participation (diet program)
Self service (supermarket)
Service-System Design Matrix
Degree of customer/server contact
Buffered Permeable Reactive
High core (none) system (some) system (much) Low
Face-to-face
total
customization
Face-to-face
Sales loose specs Production
Face-to-face
Opportunity tight specs
Efficiency
Phone
Internet & Contact
on-site
Mail contact technology

Low High
Design for High-and-Low Contact
Services (1 of 2)
DESIGN DECISION HIGH-CONTACT SERVICE LOW-CONTACT SERVICE
Facility location Convenient to customer Near labor or
transportation

Facility layout Must look presentable, Designed for efficiency


accommodate customer
needs, and facilitate
interaction with customer
Quality control More variable since customer Measured against
is involved in process; established standards;
customer expectations and testing and rework
perceptions of quality may possible to correct defects
differ; customer present when
defects occur
Capacity Excess capacity required to Planned for average
handle peaks in demand demand
Design for High-and-Low Contact
Services (2 of 2)
DESIGN DECISION HIGH-CONTACT SERVICE LOW-CONTACT SERVICE
Worker skills Must be able to interact well Technical skills
with customers and use
judgment in decision making
Scheduling Must accommodate customer Customer concerned only
schedule with completion date

Service process Mostly front-room activities; Mostly back-room


service may change during activities; planned and
delivery in response to executed with minimal
customer interference

Service package Varies with customer; includes Fixed, less extensive


environment as well as actual
service
Service Blueprinting

Service blueprinting
A method used in service design to describe
and analyze a proposed service
A useful tool for conceptualizing a service
delivery system
Major Steps in Service
Blueprinting
1. Establish boundaries
2. Identify sequence of customer interaction
3. Prepare a flowchart
4. Develop time estimates
5. Identify potential failure points
6. Determine which factors can influence
profitability
Example of Service Blueprinting
Standard Brush Apply Collect
execution time Buff
shoes polish payment
2 minutes
30 30 45 15
secs secs secs secs
Total acceptable
execution time
Wrong
5 minutes
color wax
Clean Fail
shoes point Materials
Seen by
(e.g., polish, cloth)
customer 45
secs

Line of Not seen by


visibility customer but Select and
necessary to purchase
performance supplies
Blueprint for an Installment Lending Operation
Loan
application Branch Officer
30 min. 1 hr. Pay book

W W
Line of visibility

Receive Final
payment payment
Notify
Decline
customer
Issue
Confirm
Deny
check F
F
Verify Print
Credit Close
income Accept payment Delinquent
check account
data book

1 day 2 days 3 days


F
Initial
screening
Verify
Confirm
payor
F Credit Branch
Employer
bureau records

Bank
F
Accounting
accounts

Data base
records

F Fail point W Customer wait Employee decision


Service Blueprint
Service Fail-safing
Poka-Yokes (A Proactive Approach)
Keeping a mistake
from becoming a
Task
service defect

How can we fail-


safe the three Ts? Treatment Tangibles
Have we
compromised
one of the
3 Ts?
1. Task
2. Treatment
3. Tangible
Applying Behavioral Science to
Service Encounters
The front-end and back-end of the encounter are
not created equal
Segment the pleasure, combine the pain
Let the customer control the process
Pay attention to norms and rituals
People are easier to blame than systems
Let the punishment fit the crime in service
recovery
Characteristics of a Well-Designed
Service System (1 of 2)
1. Each element of the service system is consistent
with the strategic and operating focus of the firm

2. It is user-friendly
FedEx
3. It is robust and easy to
sustain

4. It is structured so that consistent performance by


its people and systems is easily maintained
Characteristics of a Well-Designed
Service System (2 of 2)
5. It provides effective links between the back office and
the front office so that nothing falls between the cracks

6. It manages the evidence of service quality in such a


way that customers see the value of the service
provided

7. It is cost-effective

8. It ensures reliability and high quality


Challenges of Service Design

1. Variable requirements
2. Difficult to describe
3. High customer contact
4. Service customer encounter
Guidelines for Successful Service
Design
1. Define the service package
2. Focus on customers perspective
3. Consider image of the service package
4. Recognize that designers perspective is different
from the customers perspecticve
5. Make sure that managers are involved
6. Define quality for tangible and intangibles
7. Make sure that recruitment, training and rewards are
consistent with service expectations
8. Establish procedures to handle exceptions
9. Establish systems to monitor service

You might also like