Chapter 5

The Service Delivery Process

Stages of Operational Competitiveness

Philosophical viewpoint where operations move from necessary evil to the key source of competitive advantage.

Four Stages of Operational Competitiveness

Stage

1: Available for Service

operations are a necessary evil operations are reactive the primary mission is to avoid mistakes technological investment, training, and personnel costs are minimize management designs skill out of the work

Four Stages of Operational Competitiveness

Stage

2: Journeyman

prompted by the arrival of competition operations become outward-looking investment in technology is linked to long-term costs savings processes are developed, implemented, and monitored operations still viewed as a secondary function

Four Stages of Operational Competitiveness

Stage
the

3: Distinctive Competencies Achieved

firm has mastered the core service understands complexity of making changes operations are now viewed equal with other departments view of technology changes from cost savings to enhancing the customers experience

Four Stages of Operational Competitiveness

Stage

4: World Class Service Delivery

companys name is synonymous with service excellence become a fast learner and innovator
technology

provides a means to accomplish tasks that the competition cannot duplicate

Marketing and Operations: Balance is Critical

The marriage of customer needs with the manufacturing and technological capabilities of the firm The marriage involves compromise

customer needs can seldom be met completely and economically

Success in service marketing demands a much greater understanding of the constraints and opportunities posed by operations

Thompsons Perfect-World Model

Perfect-World

Model

To operate efficiently, a firm must be able to operate as if the market will absorb the single kind of product at a continuous rate and as if the inputs flowed continuously at a steady rate and with specified quality

The Focused-Factory Concept

An

operation that concentrates on performing one particular task in one particular part of the plant for promoting experience and effectiveness through repetition and concentration on one task necessary for success

Used

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The Plant within a Plant Concept

PWP
An

Concept

operation that that breaks up large, unfocused plants into smaller units buffered from one another so that they can each be focused separately buffer environmental influences by surrounding their technical core with input and output components

Organizations

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Applying Efficiency Models to Services

Servuction

system is an operations nightmare impossible to use inventories problems with decoupling production from the customer system is directly linked to the market
demand

varies day to day, hour to hour, minute to

minute
massive

problems in capacity planning and utilization

Possible Solutions to Service Operation Problems

1.

12

Isolate the technical core

Different

management philosophies should be adopted for each unit of operation technical core should be subjected to production-ling approaches high contact areas should sacrifice efficiency in the interest of the consumer

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Possible Solutions to Service Operation Problems

2. 3. 4. 5.

Production-lining the whole system Creating flexible capacity Increasing customer participation Moving the time of demand

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Service Blueprints
Blueprints

provide a means of communication between operations and marketing and can highlight potential problems on paper before they occur.

essentially a flowchart that shows lines visibility

Figure 5.3 Blueprint for Cafeteria-Style Restaurant

15

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Components of a Service Blueprint

Identify direction in which processes flow Identify the time it takes to move from one process to the next Identify the costs involved with each process step Identify the amount of inventory build-up at each step Identify the bottlenecks in the system

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Blueprinting and New- Product Development

Complexity--the number and intricacy of steps

Specialization strategy
decreases
by

Penetration strategy
increases
by

reducing the number of steps in the process it unbundles the service offering increasing the number of steps

complexity

complexity

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Blueprinting and New- Product Development

Divergence--degrees of freedom in decision making

Volume-oriented strategy (production-line)

decreases
produces

Niche

costs but does so at the expense of increasing conformity and inflexibility

standardized output and reduces

divergence

increases
Tailor

positioning strategy
divergence

the service experience to each customer