Operations Management
For Competitive Advantage
Operations Management
For Competitive Advantage
Chapter 6
Product Design & Process
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Operations Management
For Competitive Advantage
Chapter 6
Product Design and process Selection –
Services
 Service Generalizations
 Service Strategy: Focus & Advantage
 Service-System Design Matrix
 Service Blueprinting
 Service Fail-safing
 Characteristics of a Well-Designed Service
Delivery System
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Operations Management
For Competitive Advantage
Service Generalizations
1. Everyone is an expert on services.
2. Services are idiosyncratic.
3. Quality of work is not quality of service.
4. Most services contain a mix of tangible and
intangible attributes.
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Operations Management
For Competitive Advantage
Service Generalizations (Continued)
5. High-contact services are experienced,
whereas goods are consumed.
6. Effective management of services requires
an understanding of marketing and
personnel, as well as operations.
7. Services often take the form of cycles of
encounters involving face-to-face, phone,
internet, electromechanical, and/or mail
interactions.
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Operations Management
For Competitive Advantage
Service Businesses

Facilities-based services

Field-based services
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Operations Management
6
For Competitive Advantage
Internal Services
Internal Supplier
Internal
Customer
External
Customer
Internal Supplier
Operations Management
7
For Competitive Advantage
Exhibit 6.1
The Service Triangle
The Service
Strategy
The
Customer
The
Systems
The
People
Operations Management
For Competitive Advantage
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Service Strategy: Focus and Advantage
Performance Priorities

Treatment of the customer

Speed and convenience of service delivery

Price

Variety

Quality of the tangible goods

Unique skills that constitute the service offering
Operations Management
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For Competitive Advantage
Exhibit 6.6
Service-System Design Matrix
Degree of customer/server contact
High
Buffered
core (none)
Permeable
system (some)
Reactive
system (much)
Low
Face-to-face
total
customization
Face-to-face
loose specs
Sales
Opportunity
Face-to-face
tight specs
Internet &
on-site
Mail contact technology
Low
Production
Efficiency
Phone
Contact
High
Operations Management
10
For Competitive Advantage
Example of Service Blueprinting
Standard
execution time
2 minutes
Brush
shoes
30
secs
Total acceptable
execution time
5 minutes
Seen by
customer
Line of
visibility
Not seen by
customer but
necessary to
performance
Clean
shoes
45
secs
Apply
polish
30
secs
Fail
point
Buff
Collect
payment
45
secs
15
secs
Wrong
color wax
Materials
(e.g., polish, cloth)
Select and
purchase
supplies
Operations Management
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For Competitive Advantage
Service Fail-safing
Poka-Yokes (A Proactive Approach)

Keeping a
mistake from
becoming a
service defect.
Task
Treatment

How can we failsafe the three
Ts?
Tangibles
Operations Management
For Competitive Advantage
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Have we compromised one of the 3 Ts?
Operations Management
For Competitive Advantage
Three Contrasting Service Designs

The production line approach

The self-service approach

The personal attention approach
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Operations Management
For Competitive Advantage
Characteristics of a Well-Designed
Service System
1. Each element of the service system is
consistent with the operating focus of the firm.
2. It is user-friendly.
3. It is robust.
4. It is structured so that consistent performance
by its people and systems is easily maintained.
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Operations Management
For Competitive Advantage
Characteristics of a Well-Designed
Service System (Continued)
5. It provides effective links between the back
office and the front office so that nothing falls
between the cracks.
6. It manages the evidence of service quality
in such a way that customers see the value
of the service provided.
7. It is cost-effective.
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