The Service Delivery System - University of Texas at Austin

The Service Delivery System - University of Texas at Austin

New Service Development Learning Objectives Discuss the new service development process. Prepare a blueprint for a service operation. Describe a service process using the dimensions of divergence and complexity. Use the taxonomy of service processes to classify a service operation. Compare and contrast the generic approaches to service system design. Levels of Service Innovation Radical Innovations

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 Incremental Innovations Service Line Extensions: augmentation of existing service line (e.g. new menu items) Service Improvements: changes in features of currently offered service Style Changes: modest visible changes in appearances 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 Service Design Elements Structural - Delivery system - Facility design - Location - Capacity planning Managerial - Service encounter - Quality - Managing capacity and demand - Information New Service Development Cycle

Full-scale launch Post-launch review Full Launch Design Or ga n Co izatio nte na l xt People s am Te Service design and testing Process and system design and testing

Marketing program design and testing Personnel training Service testing and pilot run Test marketing Development Enablers Product Technology Formulation of new services objective / strategy Idea generation and screening Concept development and testing Systems

Tools Analysis Business analysis Project authorization Service Blueprint of Luxury Hotel 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 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 Doeuvres 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 Taxonomy of Service Processes

Low divergence (standardized service) Processing Processing of goods Information Dry Check Cleaning processing Restocking Billing for a a vending credit card machine Ordering groceries from a home computer No Customer Contact Indirect customer

contact Direct Customer Contact No customerservice worker interaction (selfservice) Customer service worker interaction Operating a vending machine Assembling premade furniture Withdrawing cash from

an ATM Food service in a restaurant Hand car washing Giving a lecture Handling routine bank transactions Processing of people High divergence (customized service) Processing Processing of goods Information Auto repair Computer

Tailoring a programming suit Designing a building Processing of people Supervision of a landing by an air controller Operating an elevator Riding an escalator Providing public transporta tion Providing mass vaccination

Sampling food at a buffet dinner Bagging of groceries Home carpet cleaning Landscaping service Documenting medical history Searching for information in a library Portrait painting Counseling Driving a rental car Using a

health club facility Haircutting Performing a surgical operation Generic Approaches to Service Design Production-line Limit Discretion of Personnel Division of Labor Substitute Technology for People Standardize the Service Customer as Coproducer Self Service Smoothing Service Demand

Customer Contact Degree of Customer Contact Separation of High and Low Contact Operations Information Empowerment Employee Customer Customer Value Equation Re sults Pr oduced Pr ocessQuality Value Pr ice CostsofAcquiringtheService Discussion Questions What are the limits in the production-line approach to service? Give an example of a service in which isolation of the technical core would be inappropriate. What are some drawbacks of customer

participation in the service delivery process? What ethical issues are raised in the promotion of sales during a service transaction? 100 Yen Sushi House 1. 2. 3. 4. Prepare a service blueprint for the 100 Yen Sushi House. 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. 100 Yen Sushi House Layout Dishwashing Counter in Back CONVERSATION AREA Miso and Tea Station CONVEYOR BELT

CONVERSATION AREA TAKE-OUT POSITION ENTRANCE = CHEF Commuter Cleaning - New Venture Proposal 1. 2. 3. 4. Prepare a service blueprint for Commuter Cleaning. What generic approach to service design is illustrated by Commuter Cleaning, and what competitive advantage does this offer? Using the data in Table 4.6 calculate a break-even price per shirt if monthly demand is expected to be 20,000 shirts and the contract with a cleaning plant stipulates a charge of $0.50 per shirt.

Critique the business concept, and make recommendations for improvement. Golfsmith 1. 2. 3. Prepare a service blueprint for Golfsmith. What generic approach to service design does Golfsmith illustrate and what competitive advantages does this design offer? Why is Golfsmith a good candidate for Internet sales? INTERACTIVE CLASS EXERCISE The class breaks into small groups and prepares a service blueprint for Village Volvo.

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