Ch 9 Service Processes

Question 1

What is a service package?

Answer 1

A bundle of goods and services that is provided in some environment.

Question 2

Which features does a service bundle consist of?

Answer 2

1. Supporting facility (eg. Internet website, a golf course, a ski lift, an airline, and an auto repair facility)
2. Facilitating good (eg. golf clubs, skis, beverages, auto parts, and services sold by the firm)
3. Information (eg. detailed descriptions of the items offered, tee-off times, weather reports, medical records, seat preferences, and item availability)
4. Explicit services (eg. the response time of an ambulance, air conditioning in a hotel room, and a smooth-running car after a tune-up)
5. Implicit services (eg. the status of a degree from an Ivy League school, the privacy of a loan office, and worry-free auto repair)

Question 3

High and low degree of customer contact

Answer 3

a high degree of customer contact (eg. face to face) are more difficult to control and more difficult to rationalize than those with a low degree of customer contact (e-mail;low interaction). In high-contact systems, the customer can affect the time of demand, the exact nature of the service, and the quality, or perceived quality, of service because the customer is involved in the process. .

Question 4

One characteristic of services?

Answer 4

• We cannot inventory service. Implications are that we must meet demand as it arises and it will affect business planning.

Question 5

One important design parameter in service design?

Answer 5

So, an important design parameter in services is “What capacity should we aim for?” Too much capacity generates excessive costs. Insufficient capacity leads to lost customers. In these situations, of course, we seek the assistance of marketing to influence demand. This is one reason we have discount airfares, hotel specials on weekends, and so on. This is also a good illustration of why it is difficult to separate the operations management functions from marketing in services.

Question 6

Factors distinguishing service and manufacturing design?

Answer 6

• the process and the product must be developed simultaneously; indeed, in services, the process is the product
• although equipment and software that support a service can be protected by patents and copyrights, a service operation itself lacks the legal protection commonly available to goods production
• the service package, rather than a definable good, constitutes the major output of the development process
• many parts of the service package are often defined by the training individuals receive before they become part of the service organization
• many service organizations can change their service offerings virtually overnight

Question 7

The two categories of customer contact in virtual service?

Answer 7

• pure virtual customer contact where companies such as eBay and Second Life enable customers to interact with one another in an open environment
• mixed virtual and actual customer contact where customers interact with one another in a server moderated environments such as product discussion groups, YouTube, and Wikipedia.

Question 8

It is common to treat accommodation as a trade-off decision for customers, what are the standard trade-off?

Answer 8

The standard approach is to treat this decision as a trade-off between cost and quality. More accommodation implies more cost; less accommodation implies less-satisfied customers.

Question 9

Variability emerge when a customer interacts with the process, i.e. it happens in the service process. Which are The five basic types of variability?

Answer 9

• arrival variability—the arrival time of customers at a restaurant may be inconsistent with average demand, leading to times when servers are overloaded or underutilized;
• request variability—travelers requesting a room with a view at a crowded hotel;
• capability variability—a patient being unable to explain his or her symptoms to a doctor;
• effort variability—shoppers not bothering to put their shopping carts in a designated area in a supermarket parking lot;
• subjective preference variability— one bank customer interpreting a teller addressing him by his first name as a sign of warmth, while another customer feels that such informality is unbusinesslike.

Question 10

Which are the four basic accommodation strategies?

Answer 10

• classic accommodation, which entails eg. extra employees or additional employee skills to compensate for variations among customers;
• low-cost accommodation, which uses low-cost labor, outsourcing, and self-service to cut the cost of accommodation;
• classic reduction, which requires, eg. customers to engage in more self-service, use reservation systems, or adjust their expectations;
• uncompromised reduction, which uses knowledge of the customer to develop procedures that enable good service, while minimizing the variation impact on the service delivery system.

effective management of variability generally requires a company to influence customer behavior, eg. charging per DVD (incentive for returning back DVD) VS Netflix’s subscription model.

Question 11

3 aspects of service encounter?

Answer 11

the flow of the service experience (what’s happening),

• the flow of time (how long it seems to take),
• judging of encounter performance (what you thought about it later)

Question 12

Looking at the service encounter from this perspective has led to the following six behaviorally-based principles for service encounter design and management:

Answer 12

1. The front end and the back end of the encounter are not created equal. - a company is likely to be better off with a relatively weak start and a modest upswing on the end than having a great start and a so-so ending. the preference for improvement and the dominant effect of the ending in our recollections. “Finish strong”, “leave the customer with a good feeling”.
2. Segment the pleasure; combine the pain. - Events seem longer when they are segmented, break up the pleasant ones into mutiple stages and painfully into one stage.
3. Let the customer control the process. - In the medical area, allowing people to choose which arm a blood sample is drawn from reduces the perceived pain of the procedure, let them book a day etc.
4. Pay attention to norms and rituals - Deviations from norms are likely to be overly blamed for failures; be aware of the expectations.
5. People are easier to blame than system - We want to put a human face on the problem.
6. Let the punishment fit the crime in service recovery- A botched task calls for material compensation, while poor treatment from a server calls for an apology.

Question 13

What is service guarantees?

Answer 13

A promise of service satisfaction backed up by a set of actions that must be taken to fulfill the promise.

Question 14

Some guidelines for using service guarantees are the following:

Answer 14

1. Any guarantee is better than no guarantee. The most effective guarantees are big deals. They put the company at risk in the eyes of the customer.
2. Involve the customer as well as employees in the design.
3. Avoid complexity or legalistic language. Use big print, not small print.
4. Do not quibble or wriggle when a customer invokes the guarantee.
5. Make it clear that you are happy for customers to invoke the guarantee.

Question 15

What is a service blueprint?

Answer 15

The flowchart of a service process, emphasizing what is visible and what is not visible to the customer.

Question 16

Basic blueprinting describes the features of the service design but does not provide any direct guidance for how to make the process conform to that design. An approach to this problem is the application of poka-yokes, what is poka-yokes?

Answer 16

Procedures that prevent mistakes from becoming defects. They are commonly found in manufacturing but also can be used in service processes. eg. electronic switches that automatically shut off equipment if a mistake is made, These can be classified into warning methods, physical or visual contact methods.

“Fail safing”: height bars at amusement parks; indented trays used by surgeons to ensure that no instruments are left in the patient; chains to configure waiting lines; take-a-number systems; turnstiles; alarms on ATMs to warn people to take their cards out of the machine; beepers at restaurants to make sure customers do not miss their table calls; mirrors on telephones to ensure a “smiling voice”; reminder calls for appointments; locks on airline lavatory doors that activate lights inside; small gifts in comment card envelopes to encourage customers to provide feedback about a service; and pictures of what “a clean room” looks like for kindergarten children.

Question 17

Three contrasting approaches to delivering on-site service?

Answer 17

• The production-line approach pioneered by McDonald’s refers to more than just the steps required to assemble a Big Mac. Rather, McDonald’s treats the delivery of fast food as a manufacturing process rather than a service process.
• The Self-Service Approach: the service process can be enhanced by having the customer take a greater role in the production of the service.Company websites, automatic teller machines, self-service gas stations, salad bars, and e-tickets are approaches that shift the service burden to the consumer. Many customers like self-service because it puts them in control. Incentives such as the benefit of reduced cost, quicker speed, and convenience can be used. However, must be fail safied!
• The Personal-Attention Approach: a rather loose, unstructured process relies on developing a relationship between the individual salesperson and the customer (this is a face-to-face with total customization service). “the front line”

Question 18

Seven Characteristics of a Well-Designed Service System?

Answer 18

1. Each element of the service system is consistent with the operating focus of the firm. For example, when the focus is on the speed of delivery, each step in the process should help foster speed.
2. It is user-friendly. This means that the customer can interact with it easily—that is, it has good signage, understandable forms, logical steps in the process, and service workers available to answer questions.
3. It is robust. That is, it can cope effectively with variations in demand and resource availability. For example, if the computer goes down, effective backup systems are in place to permit service to continue.
4. It is structured so that consistent performance by its people and systems is easily maintained. This means the tasks required of the workers are doable, and the supporting technologies are truly supportive and reliable.
5. It provides effective links between the back office and the front office so that nothing falls between the cracks. In football parlance, there should be “no fumbled handoffs.”
6. It manages the evidence of service quality in such a way that customers see the value of the service provided. Many services do a great job behind the scenes but fail to make this visible to the customer. This is particularly true where a service improvement is made. Unless customers are made aware of the improvement through explicit communication about it, the improved performance is unlikely to gain maximum impact. 7. It is cost-effective. There is minimum waste of time and resources in delivering the service. Even if the service outcome is satisfactory, customers are often put off by a service company that appears inefficient.