Product Design and Process Selection—Services - Review Notes

Services are different from manufacturing, with the key service difference being the interaction of the customer in the delivery process. Service design is no longer considered to be an art form as logical approaches to better design and management of service systems are emerging.

In a facilities-based service, the customer must go to the service facility. In contrast, in a field-based service, the production and consumption of the service takes place in the customer's environment. Internal services refer to services required to support the activities of the larger organization. There is a blurring of manufacturing and service firms since the manufacturer product always has a certain percentage of service content. Services are also seen as the next source of competitive advantage for firms.

In services we also consider the amount of customer contact or the physical presence of the customer in the system. Service systems range from those with a high degree of customer contact to those with a low degree of customer contact.

Service encounters can be configured in a number of different ways. The service-system design matrix includes six common alternatives. Flowcharting, like in manufacturing process design, is the standard tool for service process design. The flowchart, or service blueprint, emphasizes the importance of design. Poka-yoke systems applied to services prevent mistakes from becoming service defects.

Approaches to services include the production line approach, the self-service approach, and the personal attention approach. Service guarantees are not only a marketing tool for services but, from an operations perspective, these guarantees can be used as an improvement incentive and can focus the firm's delivery system on things it must do well to satisfy the customer. Finally the case on Pizza USA provides an example of design of services.

Waiting Lines

Understanding waiting lines or queues and learning how to manage them is one of the most important areas in operations management. Queuing theory is used in both manufacturing and service organizations to understand queues and to arrive at solutions to eliminate or minimize them.

The waiting line system consists of six major components: the source population, the way customers arrive at the service facility, the physical waiting line itself, the way customers are selected from the line, the characteristics of the service facility, and the condition of the customer exiting the system.

Arrivals at a service system may be drawn from a finite or limited customer pool or from a population that is large enough in relation to the service system so that changes do not significantly affect the system probabilities.

Another determinant of waiting line formation is the arrival characteristics of the queue members. The arrivals are far more controllable than normally recognized. Coupons, discounts, sales, and other methods can control demands on a system.

Queue lines can vary in length, in the number of lines used, and in the queue discipline or rules used for determining the order of service to customers. First come, first serviced is the most common priority rule. The service facility itself, with its particular flow and configuration can influence the queue. Computer spreadsheets are used to arrive at answers to waiting line problems. Computer simulations can also be used to arrive at solutions of more complex or dependent waiting line situations. Waiting line problems present challenges to management to attempt to eliminate them.

Chapter outline

The Nature of Services
Service Businesses and Internal Services
Facilities-Based Services Defined
Field-Based Services Defined
A Customer-Centered View of Service Management

An Operational Classification of Services
High and Low Degree of Customer Contact Defined

Designing Service Organizations
Service Strategy: Focus and Advantage

Structuring the Service Encounter: Service-System Design Matrix
Strategic Uses of the Matrix

Service Blueprinting and Fail-Safing
Service Blueprint Defined
Poka-Yokes Defined

Three Contrasting Service Designs
The Production-Line Approach
The Self-Service Approach
The Personal-Attention Approach

Applying Behavioral Science to Service Encounters

New Service Development Process

Service Guarantees as Design Drivers
Service Guarantee Defined


Case: Pizza U.S.A.: An Exercise in Translating Customer Requirements into Process Design Requirements.

Case: Contact Centers Should Take a Lesson From Local Businesses

Outline of the technical notes on Waiting lines

Queues Defined

Economics of the Waiting Line Problem
Cost-Effectiveness Balance
The Practical View of Waiting Lines

The Queuing System
Queuing System Defined
Customer Arrivals
Arrival Rate Defined
Exponential Distribution Defined
Poisson Distribution Defined
Distribution of Arrivals
The Queuing System: Factors
Service Rate Defined

Waiting Line Models

Approximating Customer Waiting Time

Computer Simulation of Waiting Lines


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