SERVICES MARKETING

CHAPTER 4

SERVICE DELIVERY PROCESS

HIGHLIGHTS

Marketing & Operations

Art of Blueprinting

OUTCOME

Identify & understand services’ unique delivery system

Importance of customer’s involvement in services

Know the basics of blueprinting

CUSTOMER’S INVOLVEMENT

Replace the work done by employees with work done by customers

Pro: convenient for customers, flexibility & accessibility

Cons: increased risk, less control & loss of human contact

MARKETING & OPERATIONS

1. Balance is critical

2. Service firms must be efficient (in a perfect world)

3. Applying the efficiency models

4. Art of blueprinting

1. BALANCE IS CRITICAL

A trade-off in terms of:

Type of demand; High-contact Vs. Low-contact

Cycle of demand; scheduling, production & capacity, planning & forecasting

Length of service experience

BALANCE: HIGH-CONTACT VS. LOW CONTACT

High-contact: operations must be near customers

Low-contact: operations must be placed near supply, transportation or labour

BALANCE: CYCLE OF DEMAND

Scheduling:

customer is part of schedule & must be accommodated (High-contact)

Customer is concerned mainly with completion date (Low-contact)

Production Planning:

Orders cannot be stored (High-contact)

Backlogging is possible (Low-contact)

BALANCE: CYCLE OF DEMAND

Forecasting:

Short term, time oriented (High-contact)

Long term, output oriented (Low-contact)

BALANCE: LENGTH OF SERVICE EXPERIENCE

High-contact: service time depends on customer’s needs

Low-contact: work is performed on customer surrogates (ex: forms), time standard can be tight

2. SERVICES FIRMS MUST BE EFFICIENT (IN A PERFECT WORLD)

i. Thompson’s Perfect-World Model

ii. Focused Factory Concept

iii. Plant-Within-A-Plant Concept

THOMPSON’S PERFECT-WORLD MODEL

Technical core: the place within a firm where primary operations are conducted

Perfect world: efficiency is possible only if inputs, outputs & quality happen at a constant rate and remain known & certain

FOCUSED FACTORY CONCEPT

An operation that concentrates on performing one particular task in one particular part of the service experience (specialization)

PLANT-WITHIN-A-PLANT CONCEPT

Breaking up large, unfocused activities into smaller units buffered from one another

Buffering: surrounding the technical core with input & output to shield it from outside influences

Done through smoothing, anticipating & rationing

APPLYING EFFICIENCY MODELS TO SERVICES

1. Isolating the technical core (decoupling)

&

2. Minimizing the servuction model (decoupling)

3. Production –lining the whole system

4. Creating flexible capacity

5. Moving the time demand

EFFICIENCY: DECOUPLING

Disassociating the technical core from the servuction model

EFFICIENCY: PRODUCTION-LINING

Production line approach: application of hard & soft technologies

Hard tech: hardware that facilitates the production of standardized services

Soft tech: rules, regulations & procedures

EFFICIENCY: FLEXIBLE CAPACITTY

Part time employees

Cross-training employees

Sharing capacity with other firms

THE ART OF BLUEPRINTING

Flowcharting of a service operation:

1. Identify the directions in which processes flow

2. The time it takes to move from one process to the next

3. Cost involved with each process

4. Amount of inventory build-up at each step

5. Bottlenecks in the system

Point where customers wait the longest

EXAMPLE OF SIMPLE BLUEPRINT

THANK YOU

Q&A