Professional Documents
Culture Documents
By Dr. Swatantra Kumar
By Dr. Swatantra Kumar
Swatantra Kumar
The concept of guaranteed overnight airfreight delivery of packages and letters was the subject of a college term paper by the Fedex founder, Frederick W. Smith. As the story is told, the term paper received a C because the idea was so unbelievable, but the business now is a model for the industry.
Traditionally, air freight has been slow and unreliable, an ancillary service provided by airlines that primarily are interested in passenger service. The genius of Smith, an electrical engineer, was in recognizing the analogy between freight transport and an electrical network connecting many outlets through the junction box.
From this insight was born the hub-andspoke network of Federal Express, with Memphis serving as the hub and sorting center for all packages. Arriving at night from cities throughout the United States, planes would upload their packages and wait approximately two hours before returning to their home cities with packages ready for delivery the next morning.
Thus, a package from Los Angeles destined for San Diego would travel from Los Angels to Memphis on one plane, then from Memphis to San Diego on another. With the exception of severe weather grounding an aircraft or a sorting error, the network design guaranteed that a package would reach its destination overnight.
Thus, the design of the service delivery system itself contained the strategic advantage that differentiated FedEx from the existing air-freight competitors. Today, FedEx has expanded to several hubs and uses trucks to transport packages between nearby large urban centers
Basic Research: Pursue a planned search for new knowledge regardless of possible application.
Like the case of FedEx, where a new idea was put in place
Radical Innovations Major Innovation: new service that customers did not know they needed. Start-up Business: new service for underserved 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 service delivery process (e.g. self-service boarding kiosk). Style Changes: modest visible changes in appearances.
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examples
New service for markets as yet Wells Fargo internet banking undefined. These innovations launched in may 1995 are usually driven by information and computer based technologies New service in a market that is Mondex USA, a subsidiary of already served by existing MasterCard international, that services designs and distributes smart cards for retail transactions New service offering to existing customers of an organization (Although the service may be available from other companies A bank offers Credit card facility to its current customers
Start-up business
Descriptions (Incremental innovations) Augmentations of the existing service line such as adding new menu items, new routes, and new courses
Service improvements
Changes in features of services Delta Airlines use the ATM like that are currently being offered kiosks to distribute boarding passes to passengers The most common of all new services, these are modest forms of visible changes that have an impact on customer perceptions, emotions, and attitudes. Style changes not change the service fundamentally, only its appearances Funeral homes, such as Calvary Mortuary in Los Angeles, now offer abbreviated ceremonies that celebrate life instead of mourn death, full-service flower shops, and facilities with more pastels, bighted walls, and more windows and lights
Source of Technology
Power/energy
Service Example
Jet aircraft Nuclear energy Hotel reception area Enclosed sports stadium Photochromic glass Synthetic engine oil Just-in-time (JIT) Six Sigma E-commerce Satellite TV
Facility design
Materials
Methods
Information
Front-end Planning
Idea generation
Screen ideas against new service strategy
Business analysis
Test for profitability and feasibility
Implementation
Market testing
Test service and other marketing-mix elements
Markets Offerings
Current Customers New Customers
Existing Services
Share building
Market development
New Services
Service development
Diversification
Full Launch
Enablers
Development
Formulation of new services objective / strategy Idea generation and screening Concept development and testing
People
Service design and testing Process and system design and testing Marketing program design and testing Personnel training Service testing and pilot run Test marketing
Product
Technology
Tools
Systems
Design
Analysis
Business analysis Project authorization
Consider a building, which begins in the minds eye of the architect and is translated onto paper in the form of engineering drawings for all the buildings systems: foundation, structure, plumbing, and electrical. An analog to this design process is the service concept with the system elements outlined here. These elements must be engineered to create a consistent service offering that achieves the strategic service vision.
Structural
Delivery system Facility design Location Capacity planning Service encounter Quality Managerial capacity and demand Information
Managerial
Delivery system: front and back office, automation, customer participation Facility design: size, aesthetics, layout Location: customer demographics, single or multiple sites, competition, site characteristics Capacity planning: managing queues, number of servers, accommodating average or peak demand
Service encounter: Service culture, motivation, selection and training, employee empowerment Quality: measurement, monitoring, methods, expectations Vs perceptions, service guarantee Managing capacity and demand: strategies for altering demand and controlling supply, queue management Information: competitive resource, data collection
Design Elements
Topics
Structural
Delivery system Facility design Location Process structure, service blueprint, strategic positioning Servicescapes, architecture, process flows, layout Geographic demand, site selection, location strategy
Capacity planning
Managerial Information Quality Service encounter Managing Capacity and Demand
Technology, scalability, use of Internet Measurement, design quality, recovery, tools, six-sigma Encounter triad, culture, supply relationships, outsourcing Strategies, yield management, queue management
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When a building is developed, the design is captured on architectural drawings, called blueprints, because the production is printed on special paper, creating blue lines. These blue prints show what the product should look like and all the specifications needed for its manufacture.
G. Lynn Shostack has proposed that a service delivery system also can be captured in a visual diagram (Service Blueprint) and used in the similar manner for the design of the services
A tool for simultaneously depicting the service process, the points of customer contact, and the evidence of service from the customers point of view.
Process
Service Blueprint
Customer Actions
line of interaction Onstage Contact Employee Actions line of visibility Backstage Contact Employee Actions line of internal interaction
Support Processes
Truck Packaging Forms Hand-held Computer Uniform Customer Calls Customer Gives Package
CUSTOMER
PHYSICAL EVIDENCE
Line of interaction
CONTACT PERSON (On Stage) (Back Stage) Driver Picks Up Package Deliver Package
Line of visibility
Customer Service Order
Dispatch Driver
Fly to Destination
Load On Truck
PHYSICAL EVIDENCE
Menu
Food
CUSTOMER
Arrive at Hotel
Check in
Go to Room
Receive Bags
Sleep Shower
Receive Food
Eat
Line of Interaction
Greet and Take Bags Process Registration Deliver Bags Deliver Food Process Check Out
Line of Visibility
Take Bags to Room Take Food Order
SUPPORT PROCESS
Step 1
Identify the process to be blueprinted
Step 2
Identify the customer or customer segment
Step 3
Map the process from the customers point of view
Step 4
Map contact employee actions, onstage and back-stage, and/or technology actions
Step 5
Link contact activities to needed support functions
Step 6
Add evidence of service at each customer action step
Service blueprints also use Poke-Yokes procedures that block the inevitable mistake from becoming a service defect. Poka-yokes (roughly translated from the Japanese as avoid mistakes) are common in factories and consist of such things as fixtures to ensure that parts can only be attached in right way, electronic switches that automatically shut off equipments if a mistake is made.
Poka-yokes were intially created for manufacturing operations, but they have wide range of applications to service operations as well. These can be classified into warning methods, physical or visual contact methods, and by what we call the three Ts the task to be done (was the car fixed right); the treatment accorded to the customer (was the service manager courteous?); and the tangible or environmental features of the service facility (was the waiting area clean and comfortable)
Height bars at amusement parks Indented trays used by surgeons to ensure that no instrument are left in the patient. Chains to configure waiting lines. Beepers on ATMs to warn people to take their card out of the machine Mirrors on phones to ensure a smiling voice
Production-line Limit Discretion of Personnel Division of Labor Substitute Technology for People Standardize the Service McDonalds
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ATMs, Coffee makes in hotel rooms shift some service burden onto customers
Customer Contact Degree of Customer Contact Separation of High and Low Contact Operations Sales Opportunity and Service Delivery Options Consider this:
After several visits to a stores mens clothing department,
a customers suit still did not fit. He wrote the company president, who sent a letter to the customers office with a new suit in fitting. When the alterations were completed, the suit was delivered to the customer free of charge. The company involved was Nordstrom, a specialty clothing retailer
Information Empowerment Employee Customer Now customers are empowered through information to even track their parcels through FedEx website.
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.
Low
Low
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
Determine service stages Determine alternative methods or technologies to perform operations at each stage (involves distributing tasks between men and machines) Preliminary selection of alternative methods: must meet expected level and timing of output
Service encounters can be configured in a number of different ways. The service system design matrix identifies six common alternatives
Low
Sales Opportunity
Purchasing efficiency
Mail contact
Low
High