Chapter 5 Service Delivery Process. Chapter Objectives Discuss the stages of operational...

Chapter 5

Service Delivery Process

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Chapter Objectives

• Discuss the stages of operational competitiveness.

• Appreciate the relationship between operations and marketing as it pertains to developing service delivery systems.

• Describe the types of operational models that facilitate operational efficiency.

• Consider the challenges associated with applying peak efficiency models to service organizations and recommend strategies that overcome some of these difficulties.

• Explain the art of service blueprinting as it relates to the design of service delivery systems

©2011 Cengage Learning. All rights reserved.

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Opening Vignette: Netflix


Netflix has done its job well, and its major competitive advantage is all in its process.

Netflix process is the Internet-based ordering, shipping, and return system. Netflix typically ships 2.2 million discs a day to its over 10 million customers.

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Stages of Operational Competitiveness

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


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• 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


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• 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



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• Stage 3: Distinctive Competencies Achieved– the 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”



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• Stage 4: World Class Service Delivery– company’s name is synonymous with

service excellence– become a fast learner and innovator

–technology provides a means to accomplish tasks that the competition cannot duplicate



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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


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Thompson’s Perfect-World Model

• Perfect-World ModelTo 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”


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The Focused-Factory Concept

• An operation that concentrates on performing one particular task in one particular part of the plant

• Used for promoting experience and effectiveness through repetition and concentration on one task necessary for success


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The Plant within a Plant Concept

• PWP Concept

– An operation that that breaks up large, unfocused plants into smaller units buffered from one another so that they can each be focused separately

– Organizations buffer environmental influences by surrounding their technical core with input and output components


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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


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Possible Solutions to Service Operation Problems

1. 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. Production-lining the whole system

3. Creating flexible capacity

4. Increasing customer participation

5. 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


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Figure 5.3 Blueprint for Cafeteria-Style Restaurant


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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 complexity– by reducing the number of steps in the

process– it unbundles the service offering

– Penetration strategy• increases complexity

– by increasing the number of steps


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Blueprinting and New- Product Development

• Divergence--degrees of freedom in decision making– Volume-oriented strategy (production-line)

• decreases divergence – produces standardized output and reduces costs– but does so at the expense of increasing

conformity and inflexibility

– Niche positioning strategy• increases divergence

– Tailor the service experience to each customer


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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

Copyright © 2011 Cengage Learning.


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