Chapter 4

Service Design
 Lecture Outline
1) Characteristics of Services
2) Service Design Process
3) Tools for Service Design
4) Waiting Line Analysis for Service
Improvement

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1. Characteristics of Services
Services
acts, deeds, or performances
Goods
tangible objects
Facilitating services
accompany almost all purchases of goods
Facilitating goods
accompany almost all service purchases

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Continuum From Goods to Services

Source: Adapted from Earl W. Sasser, R.P. Olsen, and D. Daryl Wyckoff, Management of
Service Operations (Boston: Allyn Bacon, 1978), p.11.

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 Designing Services

Service Characteristics
Pure services
Quasi-Manufacturing
Mixed services
Service Package
The physical goods
The sensual benefits
The psychological
benefits
Differing designs
Substitute technology
for people
Get customer involved
High customer
attention 5-5
 Characteristics of Services
Service are inseparable from delivery
Services tend to be decentralized and
dispersed
Services are consumed more often than
products
Services can be easily emulated
Services are intangible
Service output is variable
Services have higher customer contact
Services are perishable

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 Service Design
Service typically includes direct
interaction with the customer
Increased opportunity for customization
Reduced productivity
Cost and quality are still determined
at the design stage
Delay customization
Modularization
Reduce customer interaction, often
through automation
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 Service Design
(a) Customer participation in
Service typically includes direct interaction
design such as pre-arranged
funeral services or cosmetic
with the customer surgery

Increased opportunity for customization

Reduced productivity
(b) Customer participation
Cost and quality are still determined at the
in delivery such as stress
test for cardiac exam or
design stage delivery of a baby

Delay customization
(c) Customer participation in design
Modularization and delivery such as counseling,
college education, financial
Reduce customer interaction, often through
management of personal affairs, or
interior decorating
automation
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2. Service
Design
Process

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 Service Design Process

Service concept
purpose of a service; it defines target market
and customer experience
Service package
mixture of physical items, sensual benefits, and
psychological benefits
Service specifications
performance specifications
design specifications
delivery specifications

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Service Process Matrix

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 High vs. Low Contact
Services
Design High-Contact Service Low-Contact Service
Decision
Facility Near labor or
location Convenient to transportation source
customer
Facility Must look presentable, Designed for
layout accommodate efficiency
customer needs, and
facilitate interaction
with customer

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 High vs. Low Contact
Services
Design High-Contact Service Low-Contact
Decision Service
More variable since
Quality customer is Measured against
control involved in process; established
customer
expectations and standards; testing
perceptions of and rework
quality may differ; possible to correct
customer present defects
when defects occur
Capacity Excess capacity Planned for
required to handle average demand
peaks in demand

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 High vs. Low Contact
Services
Design High-Contact Service Low-Contact
Decision Service
Must be able to
Worker skills interact well with Technical skills
customers and use
judgment in
decision making

Scheduling Must accommodate Customer

customer schedule concerned only
with completion
date

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 High vs. Low Contact
Services
Design High-Contact Service Low-Contact
Decision Service
Service Mostly back-
process room activities;
Mostly front-room planned and
activities; service executed with
may change during
delivery in response minimal
to customer interference

Service Varies with customer; Fixed, less

package includes environment extensive
as well as actual
service

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 3. Tools for Service Design
Service
blueprinting
line of influence
line of interaction
line of visibility
Services capes
line of support space and function
ambient conditions
Front-office/Back-
signs, symbols, and
office activities artifacts
Quantitative
techniques

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 Service Blueprinting
Service blueprinting is a method used in service
design to describe and analyze a proposed service.
It is a useful tool for conceptualizing a service
delivery system
Major Steps in Service Blueprinting
1. Establish boundaries and decide on the level of
detail that is needed.
2. Identify steps involved and describe them. If
there is an existing process, get an input from
those who do it.
3. Prepare a flowchart of major process steps.

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 Service Blueprinting
4. Identify potential failure points. Incorporate
features that minimize the chances of failures.
5. Establish a time frame for service execution
and estimate of variability in processing time
requirements. Time is a fundamental
determinant of cost, so establishing a time
standard for service is important.
6. Analyze profitability. Customer waiting time
is important, leading to negative profitability

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Service Blueprinting

5-19
Service Blueprinting

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Service Blueprint
Components
CUSTOMER ACTIONS

line of interaction

ONSTAGE CONTACT EMPLOYEE ACTIONS

line of visibility

BACKSTAGE CONTACT EMPLOYEE ACTIONS

line of internal interaction

SUPPORT PROCESSES

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 Building a Service Blueprint

Step Step
Step66
Step
Step11 Step
Step22 Step33 Step
Step44 Step
Step55

Identify Identify Map the Map Link Add

Identify Identify Map the Map Link Add
the the process contact customer evidenc
evidenc
the the process contact customer
from eeofof
process
process custom
custom fromthe
the employe
employe and
and
totobe ereroror custom ee contact service
service
be custom contact
blue- custom ers actions, person atateach
each
blue- custom ers actions, person
point custom
printed.
printed. erer pointofof onstage
onstage activities
activities custom
segmen view. and totoneeded erer
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t.t. back- support action
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back- support
stage. functions. step.
step.
stage. functions.

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Application of Service
Blueprints
New Service Development
concept development
market testing
Supporting a Zero Defects Culture
managing reliability
identifying empowerment issues
Service Recovery Strategies
identifying service problems
conducting root cause analysis
modifying processes

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 Blueprints Can Be Used By:
Service Marketers Human Resources
creating realistic
customer expectations
service system design
promotion
Operations Management
rendering the service as
promised
managing fail points
training systems
quality control
empowering the human
element
job descriptions
selection criteria
appraisal systems
System Technology
providing necessary tools:
system specifications
personal preference databases
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 Characteristics of Well
Designed Service Systems
A well designed service system should be
consistent with the organizations vision as well as
mission. It should be user friendly, robust, easy to
sustain, cost effective and should bring value to
customers.
A good and well design should create an effective
linkage between back operations and front
operations. It should aim for a single unifying
theme. It should ensure reliability and high quality.

The reasons of a poor service design include

variable requirements, difficult to describe
requirements, high volume of customer contact.

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4. Elements of Waiting Line Analysis

Operating characteristics
average values for characteristics that describe
performance of waiting line system
Queue
a single waiting line
Waiting line system
consists of arrivals, servers, and waiting line
structure
Calling population
source of customers; infinite or finite

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5-27
 Elements of Waiting Line Analysis
Arrival rate ()
frequency at which customers arrive at a waiting
line according to a probability distribution,
usually Poisson
Service rate ()
time required to serve a customer, usually
described by negative exponential distribution
Service rate must be higher than arrival rate ( <
)
Queue discipline
order in which customers are served
Infinite queue
can be of any length; length of a finite queue is
limited
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Elements of Waiting Line Analysis
Channels
number of
parallel
servers for
servicing
customers
Phases
number of
servers in
sequence a
customer
must go
through

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 Operating
Characteristics
Operating characteristics are assumed to
approach a steady state

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Psychology of Waiting

Waiting rooms
magazines and
newspapers
televisions
Bank of America
mirrors
Supermarkets
magazines
impulse purchases

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 Psychology of Waiting

Preferential treatment
Grocery stores: express lanes for customers
with few purchases
Airlines/Car rental agencies: special cards
available to frequent-users or for an additional
fee
Phone retailers: route calls to more or less
experienced salespeople based on customers
sales history
Critical service providers
services of police department, fire department,
etc.
waiting is unacceptable; cost is not important

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 Waiting Line Models
Single-server model
simplest, most basic waiting line structure
Frequent variations (all with Poisson arrival
rate)
exponential service times
general (unknown) distribution of service times
constant service times
exponential service times with finite queue
exponential service times with finite calling
population

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Basic Single-Server Model
Assumptions
Poisson arrival rate
exponential service
times
first-come, first-
served queue Computations
discipline
= mean arrival
infinite queue length
rate
infinite calling = mean service
population rate
n = number of
customers in line

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Basic Single-Server Model
probability that no
customers are in queuing
average number of
customers in queuing

( )
system
system

P0 = 1 L=

probability of n customers
in queuing system
average number of

( ) ( )( )
customers in waiting line
n
n
2
Pn = P0 = 1 Lq =
( )

5-35
Basic Single-Server Model
average time customer
spends in queuing system

1 L
W= =
=that server is
probability

busy and a customer has
average time customer to wait (utilization factor)
spends waiting in line

I=1
Wq =
( probability that
server is
) idle and= customer
1 = Pcan
0 be
served

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Basic Single-Server Model Example

= 24
= 30

5-37
Basic Single-Server Model Example

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Service Improvement Analysis
Waiting time (8 min.) is too long
hire assistant for cashier?
increased service rate
hire another cashier?
reduced arrival rate
Is improved service worth the cost?

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Excel Single-Server
Solution

D4/(D5-D4)
(1/(D5-D4))*60

(D4/D5)*(D5-D4)*60

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Advanced Single-Server Models
Constant service times
occur most often when automated equipment
or machinery performs service
Finite queue lengths
occur when there is a physical limitation to
length of waiting line
Finite calling population
number of customers that can arrive is limited

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Advanced Single-Server Models

5-42
Advanced Single-Server
Model

Probability of zero
customers

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Basic Multiple-Server Model
Single waiting line and service facility
with several independent servers in
parallel
Same assumptions as single-server

model
s >
s = number of servers
servers must be able to serve customers
faster than they arrive

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Basic Multiple-Server Model
probability that there are no customers in
system 1
P0 = n = s 1

( ) + ( )( )
1 n 1 s s
n! s! s -
n=0

()
probability of n customers in system
1 n

{
P0, for n > s
s!s ns

Pn =

()
1 n
P0, for n s
n!

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 Basic Multiple-Server Model
probability that customer must wait

()
1 s
s
Pw = P0 Lq = L
s! s

(/)s
L= P0 + 1 Lq
(s 1)! (s ) 2
Wq = W =

L
W= =
s

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 Basic Multiple-Server Model Example

Three-server system

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Basic Multiple-Server Model Example

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Basic Multiple-Server Model Example

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Basic Multiple-Server Model Example

To cut waiting time, add another service rep

Four-server System

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Multiple-Server Waiting Line in Excel

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Multiple-Server Waiting Line in Excel

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