Chapter 5 The Service Delivery System

Learning Objectives Prepare a blueprint for a service operation. Describe a service process using the dimensions of divergence and complexity. Classify a service using a taxonomy of service processes. Compare and contrast the generic approaches to service system design. Discuss the use of information technology for employee and customer empowerment.

Service Blueprinting (Bank Lending Operation) Loan application Branch Officer Pay book 30min--1hr. Line of visibility Deny 1 day 2 days 3 days Fail point Customer wait Employee decision === ==== ===== $ 0 $ ==== ===== w w Receive Payment Final payment Decline Notify customer Issue check Confirm F F Verify income data Print payment book Credit check Accept Delinquent Close account Initial screening F Verify payer Confirm Employer Credit bureau F Branch records F Bank accounts F Accounting Data base records F W

Strategic Positioning Through Process Structure 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.

Structural Alternatives for a Restaurant LOWER COMPLEXITY/DIVERGENCE CURRENT PROCESS HIGHER COMPLEXITY/DIVERGENCE TAKE RESERVATION SEAT GUESTS, GIVE MENUS SERVE WATER AND BREAD TAKE ORDERS PREPARE ORDERS Salad (4 choices) Entree (15 choices) Dessert (6 choices) Beverage (6 choices) SERVE ORDERS COLLECT PAYMENT No Reservations Self-seating. Menu on Blackboard Eliminate Customer Fills Out Form Pre-prepared: No Choice Limit to Four Choices Sundae Bar: Self-service Coffee, Tea, Milk only Serve Salad & Entree Together: Bill and Beverage Together Cash only: Pay when Leaving 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

Structural Positioning of Healthcare Services HIGH COMPLEXITY * Hospitals Services * General Practitioner * Forensic-Testing Lab * Diagnostic services only * Specialist: Treatment only LOW DIVERGENCE HIGH DIVERGENCE * Outpatient Clinic * Retailer of Orthopedic Supplies * X-Ray Lab * Medical Counseling LOW COMPLEXITY

Taxonomy of Service Processes

Production-line Approach to Service Design Limit Discretion of Personnel Division of Labor Substitute Technology for People Standardize the Service

Customer Participation Encourage Co-production by Customer Free air miles for Internet ticketing Promote Demand Smoothing Half-price drinks before 6:00pm

Information Empowerment Employees Relational Databases Customers Internet Web Site

Customer Contact View of Services Degree of Customer Contact Influences Potential Efficiency of Service Separate High- and Low-Contact Operations Consider Sales Opportunity and Production Efficiency Tradeoff

100 Yen Sushi House Blueprint Customer Provider Activities Activities Enter Welcome Customers Seat Themselves Serve Accessories Make Paste Make Selection Prepare Selections Review Demand Make Tea Cook with Attn. to Flavor Eat Fill Tea Remove Uneaten Sushi Stack Plates Get from Inventory Pay Count Plates Leave Thank Customer Stock Inventory Remove Accessories Line of Visibility Tell Friends Wash Plates, etc. Provide High Quality Ingredients F F F F F F F

100 Yen Sushi House Service Package Supporting Facility Facilitating Goods Explicit Service Implicit Service

Dishwashing Counter in Back 100 Yen Sushi House Layout Dishwashing Counter in Back CONVERSATION AREA Miso and Tea Station CONVEYOR BELT CONVERSATION AREA TAKE-OUT POSITION ENTRANCE = CHEF

100 Yen Sushi House Questions What features differentiate 100 Yen Sushi House and how do they create a competitive advantage? How has the 100 Yen Sushi House incorporated the just-in-time system into its operations? Suggest other services that could adopt the 100 Yen Sushi House service delivery concept.