Transcript The Service Delivery System - Department of Business

New Service Development
and Process Design
1
Origin of new services
needs – stimulus for new services
 Need for survival and growth in the private
sector
 Social needs not adequately covered by
private sector – stimulus for public sector
 Human
2
Life cycle of a service
 Infancy:
many risks; high mortality rate; slow growth of
demand
 Growth: acceptance by customer
– Pressures for additional capacity
– More efficient service
– Adjustments in managerial style
 Maturity: demand reaches saturation level (long duration
for services that meet genuine need)
 Decline: changes in economy, new improved services,
changes in technology
3
When to introduce new services?
Steps in service design
 Idea
generation
 Selection: compatibility with organization’s
goals and resources
– Private sector, drop the idea if:
» Not much profit
» Deteriorates company image
» Incompatible with skills, facilities
– Public sector
» Goals less easily definable (public welfare)
» Little attention to operational issues
4
Steps in service design
 Preliminary
design: little product testing.
Marketing present
– Specify key attributes of service package
 Final
design: specify service level
5
New Service Development Cycle
• Full-scale launch
• Post-launch review
Full Launch
Development
Enablers
• Formulation
of new services
objective / strategy
• Idea generation
and screening
• Concept
development and
testing
People
• Service design
and testing
• Process and system
design and testing
• Marketing program
design and testing
• Personnel training
• Service testing and
pilot run
• Test marketing
Design
Product
Technology
Systems
Tools
Analysis
• Business analysis6
• Project authorization
Levels of Service Innovation
 Major
Innovation: new service driven by
information and computer based technology
 Start-up Business: new service for existing market
 New Services for the Market Presently Served:
new services to customers of an organization
(some courses on-line)
 Service Line Extensions: augmentation of existing
service line (e.g. new elective courses)
 Service Improvements: changes in features of
currently offered service (bidding system)
 Style Changes: modest visible changes in
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appearance
Technology Driven Service Innovation
 Power/energy
- International flights with jet
aircraft
 Physical design - Enclosed sports stadiums
 Materials - Astroturf
 Methods - JIT and TQM
 Information - E-commerce using the Internet
8
Classification of Service Automation
 Fixed-sequence
(F) - parking lot gate
 Variable-sequence (V) - ATM
 Playback (P) - answering machine
 Numerical controlled (N) - animation
 Intelligent (I) - autopilot
 Expert system (E) - medical diagnosis
 Totally automated system (T) - EFT
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Adoption of New Technology in
Services
 Challenges
of Adopting New Technology
The Process is the Product
Back Office vs Front Office Changes
Need for Standardization
 Managing the New Technology Adoption
Process
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Service Blueprinting
(Bank Lending Operation Example)
Loan application Branch
30min--1hr.
Officer
Pay book
===
====
====
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$ 0 $
====
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w
w
Line of visibility
Decline
F
Deny
Verify
income
data
Initial
screening
F
Receive
Payment
Notify
customer
Credit
check
1 day
Accept
2 days
Confirm
Print
payment
book
Delinquent
F
Close
account
F
Verify
payer
F
Bank
accounts
Issue
check
3 days
Credit
bureau
Employer
Final
payment
Branch
records
Accounting
F
Data base
records
F
Fail point
W
Customer wait
Employee decision
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Service Blueprint of Luxury Hotel
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Service Design and Process
Selection in HC system

Service design=process selection
Customer
Technology
Worker
Uncertainty and complexity
Service design = procedures through which workers carry out the
process
– Procedures for:
»
»
»
»
Information exchange
Material delivery/exchange
Monetary exchange
Contact
Variable sequence, occur concurrently, differ in duration
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Service Design and Process
Selection in LC system
 Similar
to manufacturing tangible output
Worker
Technology
 Process selection through a range of options
available with respect to equipment and
procedures
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Basic Types of Processes
 Project
– Long duration
– Low volume
– One of a kind
Well-defined activities
Duration affected by completion of critical
activities
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Basic Types of Processes
 Batch
(job shop)
– Short duration
– Low volume
– Custom made
Different sequence of activities for each
customer
Scheduling
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Basic Types of Processes
 Line
(flow shop)
– Short duration
– High volume
– Standard product
Standardised services
Routine sequencing
Line balancing
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Basic Types of Processes
 Continuous
Critical issue: deployment of service
resources
A measure of performance: travel time to
customer
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Process Selection
 Steps
arranged in a logical sequence
 Capacity at each step must be balanced to
minimise bottlenecks
 Certain steps can be eliminated, or process
shortened by paralleling steps
 Appropriate flexibility at each step
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Process Selection - Time
 Access
time: from first attempt to obtain
service until the start of customer service
 Queuing time: length of queue, integrity of
queue
 Action time: time to provide the service
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Strategic Positioning
Through Process Selection
 Degree
of Complexity: Measured by the
number of steps in the service blueprint.
For example a clinic is less complex than a
general hospital.
 Degree of Divergence: Amount of
discretion permitted the server to customize
the service. For example the activities of an
attorney contrasted with those of a
paralegal.
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Structural Alternatives for a Restaurant
LOWER COMPLEXITY/DIVERGENCE
CURRENT PROCESS
No Reservations
Self-seating. Menu on Blackboard
Eliminate
Customer Fills Out Form
TAKE RESERVATION
SEAT GUESTS, GIVE MENUS
SERVE WATER AND BREAD
TAKE ORDERS
PREPARE ORDERS
Pre-prepared: No Choice
Salad (4 choices)
Limit to Four Choices
Entree (15 choices)
Sundae Bar: Self-service
Dessert (6 choices)
Coffee, Tea, Milk only
Serve Salad & Entree Together:
Bill and Beverage Together
Cash only: Pay when Leaving
Beverage (6 choices)
SERVE ORDERS
COLLECT PAYMENT
HIGHER COMPLEXITY/DIVERGENCE
Specific Table Selection
Recite Menu: Describe Entrees & Specials
Assortment of Hot Breads and Hors D’oeuvres
At table. Taken Personally by Maltre d’
Individually Prepared at table
Expand to 20 Choices: Add Flaming Dishes;
Bone Fish at Table; Prepare Sauces at Table
Expand to 12 Choices
Add Exotic Coffees; Sherbet between
Courses; Hand Grind Pepper
Choice of Payment. Including House Accounts:
Serve Mints
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Production-line Approach to
Service Design
Design the system to control the process
 Limit Discretion of Personnel: standardization and
consistency
 Division of Labor: specialisation of skills; pay only
for required skills
 Substitute Technology for People: soft technology
(marker card in display for replenishment)
 Standardize the Service: limit service array
– Opportunity for pre-planning; predictability
– Uniformity in quality
– Franchising possible
23
Customer Participation
Ranges from self-service to complete dependence on
service provider
 Substitution of consumer labor for provider labor:
encourage co-production by customer (free air
miles for Internet ticketing). Lower cost service
 Promote Demand Smoothing: requires
participation of customer. They must adjust the
time of their demand to service availability
– Half-price drinks before 6:00pm
– Reservations & appointments: compensation for
customer is to avoid waiting time

Use customer to assume a diagnostic role
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Methodology for Process Selection
 Determine
service stages
 Determine alternative methods or
technologies to perform operations at each
stage (involves distributing tasks between
men and machines)
 Preliminary selection of alternative
methods: must meet expected level and
timing of output
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Methodology for Process Selection
 Detailed
alternative service production: combine
alternatives at each stage
– Methods must be compatible
– Each combination is analysed on the basis of
» Performance criteria: capacity
» Economic criteria: purchase, installation, start-up costs,
production costs)
» Qualitative criteria: operating flexibility, safety, intangibles,
negatives (noise)

Evaluation and final selection
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100 Yen Sushi House Layout
Dishwashing Counter in Back
CONVERSATION AREA
Miso and Tea Station
CONVEYOR
BELT
CONVERSATION AREA
TAKE-OUT
POSITION
ENTRANCE
= CHEF
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100 Yen Sushi House Blueprint
Customer
Activities
Enter
Seat Themselves
F
Make Paste
Make Selection
Eat
Stack Plates
Pay
Leave
Provider
Activities
Welcome Customers
Serve Accessories
Prepare Selections
Make Tea
F
Fill Tea
F
Count Plates
Thank Customer
Remove Accessories
F
F
Review Demand
Cook with Attn. to Flavor
Remove Uneaten Sushi
Get from Inventory
Stock Inventory
Line of Visibility
F
Tell Friends
Wash Plates, etc.
Provide High Quality Ingredients
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F