Services and Service Thinking - MTUamlan/sse2300/pdfs/note_week1.pdfServices and Service Thinking SSE2300 January 20th, 2009 Service Definions • Many definions of service are available
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ServicesandServiceThinking
SSE2300January20th,2009
ServiceDefini>ons
• Manydefini>onsofserviceareavailablebutallcontainthecommonthemesof“intangibility”andconsump>onatthepointofcrea>on.
• Consumerinvolvedinhelpingtocreatetheproduct• Twodefini>ons:
– Servicesaredeeds,processes,andperformances.(ZeithamlandBitner)
– Aserviceisa>me‐perishable,intangibleexperienceperformedforacustomerac>ngintheroleofco‐producer.(JamesFitzsimmons)
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Dis>nc>veCharacteris>csofServices
• CustomerPar>cipa>onintheServiceProcess:Howdoesacustomergetinvolved?Facilityissues?Customer‘ownership’oftheprocess.
• Simultaneity:Occurring/exis>ngatthesame>me(e.g.,opportuni>esforpersonalselling,interac>oncreatescustomerpercep>onsofquality).
• Perishability:Subjecttodecay,spoilage,ordestruc>on(e.g.,cannotinventory,opportunitylossofidlecapacity,needtomatchsupply&demand).
• Intangibility:assetsaresaleablethoughnotphysical(e.g.,crea>veadver>sing,nopatentprotec>on,importanceofreputa>on).
• Heterogeneity:serviceexperiencesdifferent,diversequality/variability–customerengagementindeliveryprocess.
Dis>nguishingServicesFromGoods
• Inseparabilityofprovider&consumer– Servicesarecreatedandconsumedatsame>me– Servicescannotbeinventoried– Demandfluctua>onscannotbesolvedbyinventoryprocesses
– Qualitycontrolcannotbeachievedbeforeconsump>on
• Dogoodscustomizedtoacustomer'sdemandsalsosuggestinseparability?
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Dis>nguishingServicesFromGoods
• Heterogeneity– Personalizedservicesincreasesleadstoheterogeneousnature
– Fromconsumer’sperspec>ve,typicallyawidevaria>oninserviceofferings
– Perceivedquality‐of‐servicevariesfromoneclienttothenext
• Goodsmanufacturer–homogeneousqualitypercep>on‐‐‐doprinciplesexistthatwecanapplytotheidiosyncra>cnatureofserviceprocess?
Dis>nguishingServicesFromGoods
• Intangibility– Servicesoeenideasandconcepts–nottangible– Clientrelianceonserviceproviders’reputa>on‐‐predictorofquality‐of‐service–guidanceinmakingservicechoices
– Howtoensuresomeacceptablequality‐of‐servicelevel
• Mostservicesinvolvesomegoods.
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Dis>nguishingServicesFromGoods
• Perishability– Servicecapacitythatgoesunusedperishes– Servicescannotbestored.Serviceproviderlosesopportuni>eswhenmaximumcapacityisnotachieved
– Servicecapabilityes>ma>onandplanning–keyaspectsforservicemanagement
• Consumerswhopar>cipateinserviceprocessgainknowledge–isthispartofvalue?Impact?
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TheServicePackage
• Suppor>ngFacility:Thephysicalresourcesthatmustbeinplacebeforeaservicecanbesold.Examples:golfcourse,skilie,hospital,airplane.
• Facilita>ngGoods:Materialconsumedbybuyeroritemsprovidedbytheconsumer.Examples:fooditems,legaldocuments,golfclubs,medicalhistory.
• Informa>on:Dataprocessedintoinforma>onthatpermitsservicetobecustomized.Examples:pa>entmedicalrecords,flightseats,customerpreferences,customerloca>ontodispatchtaxi.
TheServicePackage(cont.)
• ExplicitServices:Benefitsreadilyobservablebythesenses.Theessen>alorintrinsicfeatures.Examples:qualityofmeal,ahtudeofwaiter,on‐>medeparture.
• ImplicitServices:Psychologicalbenefitsorextrinsicfeaturesthatconsumermaysenseonlyvaguely.Examples:privacyofloanoffice,securityofawell‐litparkinglot.
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ServiceProcessMatrix
Degreeoflaborintensitythera>ooflaborcosttocapitalcost
Degreeofinterac1onandcustomiza1onabilityoftheclienttoaffectspecializa>on
(AdaptedfromLovelock(1983)andFitzsimmons&Fitzsimmons(2003))
ServiceDominantView
• Threeprincipalno>ons
– Co‐crea>onofvalue–providerandconsumerbothpar>cipate
– Rela>onships–connec>onbetweenproviderandconsumercri>cal
– Serviceprovisioning–deliveryiscri>cal
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WhatisCo‐Produc>on?
• Viewingservicesaspayforperformance–valueisco‐producedbyclientandprovider(IBM,2006)
• Customers’par>cipa>oninserviceco‐produc>onprocesseshasincreasedwithrapiddevelopmentofself‐servicetechnologies.Customers’involvementincomple>onofserviceproduc>onanddeliveryprocesses(XueandHarker,2003).
• Emerging‘co‐produc>on’sector–bothinsideandoutsidepublicservices–serviceusersareregardedasassets,involvedinsupportanddeliveryofservices(InformedChangeFindings,2006).
WhatisCo‐Crea>on?
• Co‐Crea>onseemstobereplacingthetermCo‐Produc>on
• Defini>onthesame??• Althoughservicesareproduced,soaregoodsandsotherewassomeperceptualissuesassociatedwithterm"Co‐Produc>on"
• Thecustomer/clientplaysanac>veroleincrea>onoftheservice.Thisistrueformostservices.
• Whatdocrea>onandproduc>onmeaninthecontextoftangiblegoods?
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Provider‐ClientRela>onship
• Provider– Anen>ty(person,business,orins>tu>on)thatundertakesac>vi>esto
meetaneed– Anen>tythatserves
• Client– Anen>ty(person,business,orins>tu>on)thatengagestheserviceof
another– Anen>tybeingserved
• Generalrela>onshipcharacteris>cs–Theclient– Par>cipatesintheserviceprocess(alsoknownastheservice
engagement)– Co‐producesthevalue– Thequalityofservicedelivereddependsoncustomers'preferences,
requirements,andexpecta>ons
CurrentServicesThinking
• Serviceisaprovider‐clientinterac>onthatcreatesanddeliversvaluewhilesharingrisks
• Serviceshavevaluethatcanberented
• Servicesaretheapplica>onofspecializedcompetences(skillsandknowledge)
• Servicesareautonomous,plasorm‐independent,func>ons
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ServiceProcessEfficiencyandEffec>veness
• Customerasco‐producer• Frontandbackofficeperspec>ves• Serviceprofitchainfocusoninternalandexternalcustomers
• Quality(percep>onsvs.expecta>ons)• Focusonbothefficiencyandeffec>veness• UseI.T.asproduc>vityenablerforbothinternalandexternalcustomers
ClassifyingServices
• Generally,not"blackandwhite"–rathertheyfallalongacon>nuum…
• But,extremesserveuswellinaneduca>onalprocess
• Waysofclassifying– NatureoftheServiceAct– Rela>onshipwithCustomers– Customiza>onandJudgment– NatureofDemandandSupply– MethodofServiceDelivery
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StrategicServiceClassifica>on(NatureoftheServiceAct)
Direct Recipient of the Service People Things
Nature of the Service Act
Tangible Actions
Services Directed at People’s Bodies:
Healthcare Passenger transportation Beauty salons Exercise clinics Restaurants
Services Directed at Goods and other Physical
Possessions: Freight transportation Repair and maintenance Laundry and dry cleaning Veterinary care
Intangible Actions
Services Directed at People’s Minds:
Education Broadcasting Information Services Theaters Museums
Services Directed at Intangible Assets:
Banking Legal services Accounting Securities Insurance
StrategicServiceClassifica>on(Rela>onshipwithCustomers)
Type of Relationship between Service Organization and its Customers
“Membership” Relationship No Formal Relationship
Nature of the Service Delivery
Continuous Delivery of Service
Insurance Telephone subscription Electric Utility Banking
Radio station Police protection Lighthouse Public highway
Discrete Transactions
Long-distance phone calls Theater series tickets Transit pass Wholesale buying club Airline frequent flyer
Toll highway Pay phone Movie theater Public transportation Restaurant
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StrategicServiceClassifica>on(Customiza>onandJudgment)
Extent to which Service Characteristics are Customized
High Low
Extent to which Customer Contact Personnel Exercise Judgment in Meeting Individual Customer Needs
High Surgery Taxi service Gourmet restaurant
Education (large classes) Preventive health programs Family restaurants
Low Telephone service Hotel services Retail banking Cafeteria
Public transportation Movie theater Spectator sports Institutional food service
StrategicServiceClassifica>on(NatureofDemandandSupply)
Extent of Demand Fluctuations over Time
Wide Narrow
Extent to which Supply is Constrained
Peak demand can usually be met without delay
Electricity Telephone Hospital maternity unit Police emergencies
Insurance Legal services Banking Laundry and dry cleaning
Peak demand regularly exceeds capacity
Tax preparation Passenger transportation Hotels and motels
Fast food restaurant Movie theater Gas station
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StrategicServiceClassifica>on(MethodofServiceDelivery)
Availability of Service Outlets Single Site Multiple Site
Nature of Interaction Between Customer and Service Organization
Customer Travels to Service Firm
Theater Barbershop
Bus service Fast food chain
Service Provider Travels to Customer
Pest control service Taxi
Mail delivery AAA emergency repairs
Transaction is at Arm’s Length
Credit card company Local TV station
National TV network Telephone company
OpenSystemsViewofServiceOpera>ons
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Tradi>onalandEmergingServicesComparison
Tien,J.M.andD.Berg,(2003)“ACaseforServiceSystemsEngineering,”JournalofSystemsScienceandSystemsEngineering,12(1),pp.13‐38.
TopicsforDiscussion
• Whatservicecharacteris>csaremostappropriateforInternetapplica>ons?
• Whendoescollec>nginforma>onthroughservicemembershipbecomeaninvasionofprivacy?
• Listsomemgmt.problemsassociatedwithallowingemployeestousejudgmentinservingcustomers.
• Whatfactorsareimportanttoconsiderwhenawemp>ngtoenhanceaservicefirm’simage?
• Whatcontribu>onstothemanagementandopera>onofaprofessionalservicefirmcananengineeringgraduateprovide?
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