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" Typical strategies to improve service productivity:
! Careful control of costs at every step in process ! Efforts to reduce wasteful use of materials or labor ! Replacing workers by automated machines ! Installing expert systems that allow paraprofessionals to take on
work previously performed by professionals who earn higher salaries
" Although improving productivity can be approached incrementally, major gains often require redesigning entire processes
Questions When Developing Strategies to Improve Service Productivity
" How to transform inputs into outputs efficiently? " Will improving quality hurt productivity? " Will improving productivity hurt quality? " Are employees or technology the key to productivity? " Can customers contribute to higher productivity?
Define �big picture� before �drilling down� to obtain a higher level of detail
" Identify key activities in creating and delivering service
" Which persons are involved?
" Distinguish between �front stage� and �backstage�
" Clarify interactions between customers and staff, and support by backstage activities and systems (key elements of the script).
" Identify potential fail points; take preventive measures; prepare contingency
" Develop standards for execution of each activity— times for task completion, maximum wait times, and scripts to guide interactions between employees and customers
1. Identify principal customer actions 2. Front-stage actions by customer-contact personnel 3. Identify & define scripts (detailed)
4. Define standards for front-stage activities 5. Specify physical evidence 6. Line of interaction (customers and front-stage personnel) 7. Line of visibility (between front stage and backstage) 8. Backstage actions by customer contact personnel 9. Support processes involving other service personnel 10. Support processes involving IT
- Identify fail points and risks of excessive waits - Set service standards and do failure-proofing (detailed) - Points to improve profitability (e.g. SST)
" Develop a detailed blueprint for your service company
Including customer actions, Front-stage actions, scripts (detailed), standards, physical evidence, Line of interaction, Line of visibility, Backstage actions, Support processes involving other service personnel, Support processes involving IT, Fail Points, Waiting time
" E-mail me till Monday your blueprint (e.g. ppt, photo, scan)
Define �big picture� before �drilling down� to obtain a higher level of detail
" Identify key activities in creating and delivering service
" Which persons are involved?
" Distinguish between �front stage� and �backstage�
" Clarify interactions between customers and staff, and support by backstage activities and systems (key elements of the script).
" Identify potential fail points; take preventive measures; prepare contingency
" Develop standards for execution of each activity— times for task completion, maximum wait times, and scripts to guide interactions between employees and customers
" Service providers should design standards for each step sufficiently high to satisfy and even delight customers ! Standards may include time parameters, script for a technically correct
performance, and prescriptions for appropriate style and demeanor
! Must be expressed in ways that permit objective measurement
" First impression is important as it affects customer’s evaluations of quality during later stages of service delivery ! Research by Marriott Hotels indicates that four of five top factors
contributing to customer loyalty come into play during the first 10 minutes of service delivery
" Customer perceptions of service experiences tend to be cumulative
" For low-contact service, a single failure committed front stage is relatively more serious than in high-contact service
! Viewed more seriously because there are fewer subsequent opportunities to create a favorable impression
Improving Reliability of Processes by Failure Proofing
" Analysis of reasons for failure often reveals opportunities for failure proofing to reduce/eliminate future risk of errors
" Need fail-safe methods for both employees and customers " Errors include:
! Treatment errors—human failures during contact with customer ― e.g., lack of courteous or professional behavior, failure to acknowledge, listen
to, or react appropriately to the customer
! Tangible errors—failures in physical elements of service ― e.g., noise pollution, improper standards for cleaning of facilities and uniforms,
equipment breakdown
" Goal of fail-safe procedures is to prevent errors such as: ! Performing tasks incorrectly, in the wrong order, too slowly ! Doing work that wasn’t requested in the first place
" Not profitable anymore " Rising Quality issues (e.g. waiting time) " Revitalizes process that has become outdated " Changes in external environment make existing practices obsolete
and require redesign of underlying processes ! Creation of brand-new processes to stay relevant
" Rusting occurs internally ! Natural deterioration of internal processes; creeping bureaucracy; evolution of
spurious, unofficial standards - Extensive information exchange
- Data redundancy
- High ratio of checking or control activities to value-adding
activities, increased exception processing
- Customer complaints about inconvenient and unnecessary procedures
Process Redesign: Approaches and Potential Benefits (1) (Table 8.1)
" Eliminating non-value-adding steps
! Streamline front-end and back-end processes of services with goal of focusing on benefit-producing part of service encounter
! Eliminate non-value-adding steps ! Improve efficiency ! More customized service ! Differentiate company
" Delivering direct service
! Bring service to customers instead of bringing customers to provider ! Improve convenience for customers ! Productivity can be improved if companies can eliminate expensive retail locations ! Increase customer base
Process Redesign: Approaches and Potential Benefits (2) (Table 8.1)
" Shifting to self-service
! Increase in productivity and service quality ! Lower costs and perhaps prices ! Enhance technology reputation ! Greater convenience
" Bundling services
! Involves grouping multiple services into one offer, focusing on a well-defined customer group
! Often has a better fit to the needs of target segment ! Increase productivity ! Add value for customers through lower transaction costs ! Customize service ! Increase per capita service use
! Actions and resources supplied by customers during service production
and/or delivery
! Includes mental, physical, and even emotional inputs
" Three Levels
! Low—Employees and systems do all the work - Often involves standardized service
! Medium—Customer inputs required to assist provider - Provide needed information and instructions - Make some personal effort; share physical possessions
! High—Customer works actively with provider to co-produce the service - Service cannot be created without customer’s active participation - Customer can jeopardize quality of service outcome (e.g., weight loss, marriage