CHAPTER 8

DESIGNING AND MANAGING SERVICE PROCESSES

This chapter emphasizes the importance of designing and managing service processes from the
customer’s experience. It introduces service blueprints as a key tool to gain an in-depth
understanding of service processes and to guide process redesigns, emphasizes the role of the
customer as a co-producer and the increasing use of self serving technologies (SSTs) in service
production. Noting that the customer is not always right, it highlights some of the problems
posed by “jaycustomers” and offers guidelines for dealing with these dishonest, disruptive, or
abusive customers.

LEARNING OBJECTIVES

By the end of this chapter, students should be able to:

 Determine how blueprints a service can be used to design a service and create a satisfying
experience for the customers
 Tell the difference between flowcharting and blueprinting
 Understand what can be done to reduce the likelihood of failures during service delivery
 Recognize how service redesign can help improve both quality and productivity
 Know under what circumstances customers should be viewed as “co-producers” of service,
and what the implications are of this perspective
 Understand what factors lead customers to embrace or reject new self-service technologies
 Know what managers should do to control uncooperative or abusive customers, including
the adoption of SSTs.

CHAPTER OUTLINE

Determine how service flowcharting can be used to design a service and create a satisfying
experience for the customers

Students should have little difficulty in appreciating the value of a blueprint once they have been
exposed to Figure 8.4 (pp. 204-207). The horizontal line of front-stage activities clarifies the
overall customer experience, the desired output, and the sequence in which delivery of that output
should occur. Specific timeframes can be established for completion of each task and the
acceptable wait between each customer activity. The vertically stacked boxes clarify what tasks
are involved backstage in order to complete a specific front-stage activity. Work assignments for
specific individuals can be attached to each task. The blueprint also identifies the need for purchase
and delivery of supplies and the role of information systems. Once the blueprint is ready, service
standards can be set for each activity keeping in mind customers’ expectations and special attention
be paid to points of potential failure.

Understand the differences between flowcharts and blueprints

A key tool we use to design new services (or redesign existing ones) is known as blueprinting.
It’s a more sophisticated version of flowcharting. As we distinguish between these terms in a
service context, a flowchart describes an existing process often in fairly simple form; a blueprint
specifies in detail how a service process should be constructed and includes details as to what is
visible to the customer and where
there are potential fail points in the service process.

Understand what can be done to reduce the likelihood of failures during service delivery

A good blueprint draws attention to points in service delivery where things are particularly at risk
of going wrong. A careful analysis of each activity reveals opportunity for failure proofing. Fail-
safe methods should to be designed not only for employees but also for customers, especially in
services where the latter participate actively in creation and delivery processes. There should be
no hesitation to redesign the processes so as to make them failure proof.

Service Perspectives 8.1: This article highlights how Poka-Yokes can be an effective
tool to design fail points out of service processes. Students can be encouraged to come up
with other creative ideas on how else to prevent fail points from occurring.

Recognize how service redesign can help improve both quality and productivity

The goal of services business is to achieve synergies between productivity and quality strategies
so that value can be created for both customers and the firm. Service standards should reflect both
productivity and quality goals. Redesign efforts typically focus on achieving:

1) Reduced number of service failures

2) Reduced cycle time
3) Enhanced productivity
4) Increased customer satisfaction.

Although performance measures 2) and 3) above focus on productivity, 1) and 4) contribute to a

better perception of quality.

Know under what circumstances customers should be viewed as “co-producers” of service, and
what the implications are

In co-production, customers work as partial employees whose performance will affect the
productivity and quality of output. Services such as a weight reduction program, marriage
counseling, and management consulting require highly customized service. Client’s ineffective
participation will jeopardize the quality of service outcome in such cases so customers should co-
produce the outcome by active participation. Service managers need to educate and train customers
so they will have the skills needed to perform their co-production tasks well.
Understand what factors lead customers to embrace or reject new self-service technologies

People love self-service technologies (SSTs) because they operate 24/7 at many locations, making
them convenient and providing quick service. ATM machines are a good example of SSTs. Users
may angry when machines are out of service or when they are poorly designed which make it
difficult for customers to understand the process and use them properly. Companies must act
smartly to enable customers to call the company when they need more information than the SSTs
provide or when SSTs are down. Poorly designed technology and improper training are the main
reasons for customers to reject SSTs.

Know what managers should do to control uncooperative or abusive customers

Students should recognize that although procedures must be developed to deal with problem
customers, service businesses can not allow fear and suspicion of possible abuses to degrade the
experience of the vast bulk of honest, well-behaved customers. Educating customers about the
rules, through signboards and warnings should reduce the need for taking corrective action.
Employees should be trained to deal with abusive customers and a course of action needs to be
laid down explicitly to protect employees and punish wrongdoings by customers.

Service Perspectives 8.3: Service Perspective 8.3 identifies ways of addressing customer
resistance to change, particularly when the innovation is a radical one. Once the nature of
the changes has been decided, marketing communications can help prepare customers for
the change, explaining the rationale, the benefits, and what customers will need to do
differently in the future.

TEACHING SUGGESTIONS

A key concept in this chapter is the use of blueprinting as a powerful tool to understand, make
tangible, analyze, and improve service processes.

Developing a service blueprint requires identifying all the key activities involved in service
delivery and production and specifying the linkage between these activities. You should plan to
work through the restaurant example (Figure 8.4) in detail, asking students to identify what may
go wrong at the various fail points (marked as “F” on the diagram), and how such problems might
be avoided or minimized. Students love the term OTSU (p. 240) and you may want to make
reference to OTSUs at subsequent points in the course. Ask them too, about how much wait time
is acceptable at each point marked with a “W” As a follow up, you may want to invite students to
identify the key activities involved in providing specified services that they use themselves. At the
conclusion of this discussion, be sure to relate the learning from discussion of service blueprints
to service product policy, new service design, and the concept of the augmented service product
(Flower of Service) from Chapter 3.
Customers as co-producers. Clarify how the level of customer participation varies across
services. You should seize the opportunity to discuss the implications of replacing human contact
with self-service through new electronic (or mechanical) technologies, thus moving the service
from high contact to low(er) contact. Ask students to describe their experiences with SSTs and
state if it was better or worse (and why) than their interaction with a service employee. Ask them
what could have been done to make their experiences better. To wrap up their discussion, draw
their attention to TLContact.com’s efforts to develop a truly user-friendly web site (Best Practice
in Action 8.1. Note that there is also a case on TLContact.com)

QUESTIONS AND EXERCISES

Review Questions

1. How does flowcharting help us to understand the difference between people, possession-,
mental and information-processing services?

Flowcharting is a technique for displaying the nature and sequence of the different steps in
delivering service to customers. It is a way to understand the total customer service experience.
Flowcharting allows us to see the way customer involvement is different for each of the four
categories of services introduced in Chapter 1—people processing, possession processing, mental
stimulus processing, and information processing.

Students should have little difficulty in appreciating the value of a flowchart once they have been
exposed to Figure 8.2. The horizontal line of front stage activities clarifies the overall customer
experience, the desired output, and the sequence in which delivery of that output should occur.
Specific timeframes can be established for completion of each task and the acceptable wait
between each customer activity. The vertically stacked boxes clarify what tasks are involved
backstage in order to complete a specific front stage activity.

2. How does blueprinting help in designing, managing, and redesigning service processes?

Service design is a complex task, which can benefit from a more sophisticated version of
flowcharting. Blueprint distinguishes between customer experience at front stage and the support
activities at backstage. Because blueprint clarifies the interaction between customer and
employees, it is easier to integrate activities across various departments, in the completion of a
service. Therefore, blueprints help us to think from a service point of view. As a result of this
perspective, we can redesign the processes that are not as conducive to the completion of a service.

3. How can fail-safe procedures be used to reduce service failures?

Blueprinting gives the manager an opportunity to identify the potential fail points. Once fail points
are identified, fail-safe procedures can be used to prevent failures resulting from errors committed
by both employees and customers. Physical design of objects, signboards, electronic reminders,
and other techniques can be used to prevent these failures.
Many service firms are adopting the application of poka-yoke, which is a Total Quality
Management (TQM) method, which advocates fail-safe methods to prevent errors in
manufacturing.

In understanding poka-yoke, service firms are ensuring that all employees follow certain
procedures to ensure consistency in the delivery of service quality.

A framework to reduce service failures would be to:

 Systematically collect information on the most common failure points
 Identify the root causes of the service breakdowns
 Create strategies to prevent the failures identified

4. How do creation and evaluation of a service blueprint help managers understand the role of
time in service delivery?

Speed has become a key aspect of both good service and competitive positioning, because today’s
busy customers are increasingly time sensitive. For each step in the blueprint, service standards
should be set sufficiently high to satisfy customers, and service time is one of the most important
parameters here. The impression formed in the initial stages of service encounter remains for a
long time on a customer’s mind so managers should take utmost care in designing processes most
efficiently, to create a sound impression on a customer’s mind.

5. Why is periodic process redesign necessary and what are the main types of service process
redesign?

Periodic process design becomes necessary due to external environmental factors and internal
factors. External factors may be changes in legislation, technology, or customer needs. Internal
factors may be deterioration of internal processes, bureaucracy, or evolution of spurious standards
over time. Service processes can be mainly classified as follows:

 Eliminating non-value adding steps

 Shifting to self service
 Delivering direct service
 Bundling services
 Redesigning the physical aspects of service processes
6. Why does the customer’s role as a co-producer need to be designed into service processes?
What are the implications of considering customers as partial employees?

In many services, customers act as “co-producers” in the process of creating and delivering
services. It requires active inputs from customers to ensure successful service delivery. Customer
performance in the process needs, however, to be appraised and procedures be redesigned to
change their roles if performance is not up to the mark. Self-service technologies are the ultimate
form of a customer acting as co-producer, where customer’s efforts and time replace those of a
service provider. In this case, service process should be designed to make it convenient for
customers to understand the technology and encourage adoption, by providing the advantage of
cost and speed. When customers become partial employees, part of the service costs get transferred
to customers.

7. Explain what factors make customers like and dislike self-service technologies.

Research suggests that customers both love and hate SSTs. They love SSTs when
they bail them out of difficult situations. However, customers hate SSTs when they fail. Users get
angry when they find that machines are out of service, their PINs are not accepted, websites are
down, or tracking numbers do not work. Even when SSTs do work, customers are frustrated by
poorly designed technologies that make service processes difficult to understand and use.
Companies must be smart to enable customers to call the company when they need more
information than the SSTs provide or when SSTs are down. Poorly designed technology and
improper training are the main reasons for customers to reject SSTs.

8. How can you test whether a SST has the potential to be successful, and what can a firm do
to increase its chances of customer adoption?

Does the SST work reliably?

Is the SST better than the interpersonal alternative?
If it fails, what systems are in place to recover?

APPLICATION EXERCISES

1. Review the blueprint of the restaurant visit in Figure 8.4. Identify several possible OTSUs
for each step of the front-stage process. Consider possible causes underlying each potential
failure and suggest ways to eliminate or minimize these problems.

Restaurant service (Figure 8.4, pp. 204-207) indicates many points at which failures might occur
or the customer might encounter excessive waits. At each step marked as a potential failure point
or excessive wait, management should review possible causes and solutions. To the extent that
breakdowns in information might cause these problems, the solution may lie in more effective
capture and sharing of information through IT systems. In other instances, a process redesign may
be needed to speed up service and minimize the waits.
2. Prepare a blueprint for a service with which you are familiar. Upon completion, consider:
a) What are the tangible cues or indicators of quality from the customer’s perspective
considering the line of visibility?
b) Whether all the steps in the process are necessary?
c) The extent to which standardization is possible and advisable throughout the process?
d) The location of potential fail points and how they could be designed out of the process,
or what service recovery procedure could be introduced ?
e) What are potential measures of process performance?

Make sure that students are aware of the intricacies of the processes and take time to study then
well.

3. Think about what happens in a doctor’s office when a patient comes for a physical
examination. How much participation is needed from the patient in order for the process
to work smoothly? If a patient refuses to cooperate, how can that affect
the process? What can the doctor do in advance to ensure the patient cooperates in the
delivery of the process?

This question can serve as the basis for an excellent class discussion. Get students to prepare a
service blueprint of a scenario in a doctor’s office. Students should also consider the three acts or
stage of the servicescape:

Act I – introductory scenes

Act II – Delivery of the core product
Act III – Drama ends

4. Observe supermarket shoppers who use self-service check lanes and compare those shoppers
to ones who use the services of a checker. What differences do you observe? How many of those
conducting self-service scanning appear to run into difficulties and how do they resolve their
problems?

Analyze the two different situations in terms of quickness of service delivery and perception of
service by customers. List advantages and disadvantages of self-service lanes. For example, some
customers may be too slow with self-service and the need to identify and help such customers.

5. Identify three situations in which you use self-service delivery. For each situation, what is
your motivation for using self-service delivery, rather than having service personnel do it for
you?

Have students discuss what they like and dislike about the self-service delivery.
6. What actions could a bank take to encourage more customers to bank by phone, mail,
Internet, or through ATMs rather than visiting a branch?

Students can interview bank managers and identify strategies that are used such as reward
programs and advertisements.

7. Identify one web site that is exceptionally user friendly and another that is not. What factor
makes for a satisfying user experience in the first instance and a frustrating one in the second?
Specify recommendations for the improvement in the second web site.

A good web site assumes minimum IT awareness from the customer. It should be measured in
terms of speedy access, easy navigation, and up-to-date content. Web sites may provide a link to
self-service options or service personnel, depending on the context. Remember that a technically
advanced web site does not necessarily make a good web site.