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 30min--1hr.
=== ==== ==== w

Officer

Pay book

=====

$ 0 $ w

====

=====

Line of visibility
Decline F Verify income data Initial screening 1 day Deny Credit check 2 days Notify customer Receive Payment Final payment

Issue check
Print payment book

Confirm

F Close account

Accept 3 days

Delinquent F Verify payer

Employer
Bank accounts Data base records

Credit bureau F

Branch records
Accounting F

Fail point

Customer wait

Employee decision

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
No Reservations Self-seating. Menu on Blackboard Eliminate Customer Fills Out Form

CURRENT PROCESS
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

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

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

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

COLLECT PAYMENT

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 * Outpatient Clinic HIGH DIVERGENCE

* Retailer of Orthopedic Supplies

* X-Ray Lab LOW COMPLEXITY

* Medical Counseling

Taxonomy of Service Processes

Low Divergence (Standardized Service) Processing of No customer contact Goods Dry Cleaning Information People Check processing Goods High Divergence (Customized Service) Information People Auto repair Computer Tailor programmin g, building design Air traffic control Operating Bagging of Documentin Using a an groceries g medical health elevator history club Mass Landscapin Counseling transporta g service tion systems Haircut Taxi service

Indirect customer contact No interaction (sefservice) Buying form vending machine

Internet purchase ATM transaction

Direct Customer contact

Customer- Food Class service service in a lectures worker restaurant interaction

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 Activities Enter Seat Themselves F Make Paste Make Selection Eat Stack Plates Pay Leave Provider Activities Welcome Customers Serve Accessories Prepare Selections Make Tea F Fill Tea
F

F F

Review Demand Cook with Attn. to Flavor Remove Uneaten Sushi Get from Inventory

Count Plates Thank Customer Remove Accessories

Stock Inventory

Line of Visibility
F

Tell Friends

Wash Plates, etc. Provide High Quality Ingredients

100 Yen Sushi House Service Package

Supporting Facility
Facilitating Goods Explicit Service Implicit Service

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.