1. Service Delivery Process
Chapter 5
Service Delivery Process

2. Chapter Objectives Discuss the stages of operational competitiveness.
Appreciate the relationship between operations and marketing as it pertains to developing service delivery systems.
Describe the types of operational models that facilitate operational efficiency.
Consider the challenges associated with applying peak efficiency models to service organizations and recommend strategies that overcome some of these difficulties.
Explain the art of service blueprinting as it relates to the design of service delivery systems
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3. Opening Vignette: Netflix
Netflix has done its job well, and its major competitive advantage is all in its process.
Netflix process is the Internet-based ordering, shipping, and return system. Netflix typically ships 2.2 million discs a day to its over 10 million customers.
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4. Stages of Operational Competitiveness
Philosophical viewpoint where operations move from “necessary evil” to the key source of competitive advantage.
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5. Four Stages of Operational Competitiveness
Stage 1: Available for Service
operations are a “necessary evil”
operations are “reactive”
the primary mission is to avoid mistakes
technological investment, training, and personnel costs are minimize
management designs skill out of the work
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6. Four Stages of Operational Competitiveness
Stage 2: Journeyman
prompted by the arrival of competition
operations become outward-looking
investment in technology is linked to long-term costs savings
processes are developed, implemented, and monitored
operations still viewed as a secondary function
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7. Four Stages of Operational Competitiveness
Stage 3: Distinctive Competencies Achieved
the firm has mastered the core service
understands complexity of making changes
operations are now viewed equal with other departments
view of technology changes from “cost savings” to “enhancing the customers experience”
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8. Four Stages of Operational Competitiveness
Stage 4: World Class Service Delivery
company’s name is synonymous with service excellence
become a fast learner and innovator
technology provides a means to accomplish tasks that the competition cannot duplicate
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9. Marketing and Operations: Balance is Critical
The marriage of customer needs with the manufacturing and technological capabilities of the firm
The marriage involves compromise
customer needs can seldom be met completely and economically
Success in service marketing demands a much greater understanding of the constraints and opportunities posed by operations
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10. Thompson’s Perfect-World Model
To operate efficiently, a firm must be able to operate “as if the market will absorb the single kind of product at a continuous rate and as if the inputs flowed continuously at a steady rate and with specified quality”
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11. The Focused-Factory Concept
An operation that concentrates on performing one particular task in one particular part of the plant
Used for promoting experience and effectiveness through repetition and concentration on one task necessary for success
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12. The Plant within a Plant Concept
PWP Concept
An operation that that breaks up large, unfocused plants into smaller units buffered from one another so that they can each be focused separately
Organizations buffer environmental influences by surrounding their technical core with input and output components
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13. Applying Efficiency Models to Services
Servuction system is an operations nightmare
impossible to use inventories
problems with decoupling production from the customer
system is directly linked to the market
demand varies day to day, hour to hour, minute to minute
massive problems in capacity planning and utilization
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14. Possible Solutions to Service Operation Problems
Isolate the technical core
Different management philosophies should be adopted for each unit of operation
technical core should be subjected to production-ling approaches
high contact areas should sacrifice efficiency in the interest of the consumer
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15. Possible Solutions to Service Operation Problems
Production-lining the whole system
Creating flexible capacity
Increasing customer participation
Moving the time of demand
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16. Service Blueprints
Blueprints provide a means of communication between operations and marketing and can highlight potential problems on paper before they occur.
essentially a flowchart that shows lines visibility
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17. Figure 5.3 Blueprint for Cafeteria-Style Restaurant
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18. Components of a Service Blueprint
Identify direction in which processes flow
Identify the time it takes to move from one process to the next
Identify the costs involved with each process step
Identify the amount of inventory build-up at each step
Identify the bottlenecks in the system
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19. Blueprinting and New- Product Development
Complexity--the number and intricacy of steps
Specialization strategy
decreases complexity
by reducing the number of steps in the process
it unbundles the service offering
Penetration strategy
increases complexity
by increasing the number of steps
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20. Blueprinting and New- Product Development
Divergence--degrees of freedom in decision making
Volume-oriented strategy (production-line)
decreases divergence
produces standardized output and reduces costs
but does so at the expense of increasing conformity and inflexibility
Niche positioning strategy
increases divergence
Tailor the service experience to each customer
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21. Copyright © 2011 Cengage Learning.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright © 2011 Cengage Learning.  
©2011 Cengage Learning. All rights reserved.