operations chapter8

management of organizations whose primary business requires interaction with the customer to produce the service ; two types: facilities based and field based

where the customer must go to the service facility

where the production and consumption of the service takes place in the customer's environment

management of services required to support the activities of the larger organizations. services including supply chain functions that add value in getting the goods to the customer

• philosophical view that suggests the organization exists to serve the customer, and the systems and the employees exist to facilitate the process of service
• -4 circles on each point of triangle (service strategy, the systems, the people)
• -all connect to circle inside (the customer)

• 1. front end and back end of the encounter aren't equal
• 2. segment the pleasure, combine the pain
• 3. let the customer control the process
• 4. people are easier to blame than systems
• 5. pay attention to norms and rituals
• 6. let punishment fit the crime

• 1. treatment of customer
• 2. speed and convenience of service delivery
• 3. Price
• 4. variety
• 5. quality of goods
• 6. unique skills that constitute the service offering

• buffered core (none)
• permeable system (some) - penetrable by customer via phone or face-to-face contract
• reactive system (much)- both penetrable and reactive to customer's requirements

is low and vise versa

• keeping a mistake from being a service defect
• task, treatment, tangibles

• production line approach (McDonalds)
• Self-service approach (automatic teller machines)
• personal attention approach (Ritz-Carlton)

• 1 each element of service system is consistent with the operating focus of the firm
• 2. user-friendly
• 3. robust
• 4. structured for consisten performance by people and easily maintained
• 5. provides effective links between back office and front office
• 6. manages the evidence of service quality in such a way that customers see the value of the service provided
• 7. cost effective

• 1. classic accommodation (extra employees/additional skills)
• 2. low cost accommodation (use-cost labor, outsourcing, self-service)
• 3. classic reduction (customers to engage in more self-service, use reservation systems, or adjust expectations)
• 4. uncompromised reduction (uses knowledge of the customer to develop procedures that enable good service, while minimizing variation impact on the service delivery system

• 1. arrival (too few clerks to provide prompt service)
• 2. request (travelers requesting room with window at crowded hotel)
• 3. capability (patient being unable to explain symptoms to doctor)
• 4. effort (shoppers not bothering top put shopping carts in designated area in parking lot)
• 5. subjective preference (one bank customer interpreting a teller addressing him by his first name as a sign of warmth, while another customer feels it isn't business like)

the focal point of all decisions and actions of the service organization

physical presence of the customer in the system

work process involved in providing the service itself

percentage of time the customer must in the system relative to the total time it takes to perform the customer service

more difficult to control and rationalize than those with a low degree of customer contact. in high customer contact the customer can affect the time of demand, exact nature of the service, quality of service b/c the customer is involved in the process

services; the process is the product

process design flowchart

marketing tool designed to provide a peace of mind for customer unsure about trying their service