Ops MGMT Exam 2

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Elements of a service blueprint

1. Physical evidence 2. Customer actions 3. Onstage/visible contact employee actions 4. Backstage/invisible contact employee actions 5. Support processes

Service Package 5 elements

1. Supporting Facility 2. Explicit Services 3. Service Experience 4. Implicit Services 5. Information 6. Facilitating goods

Strategic Service Classification

1. Nature of the Service Act 2. Relationship with customers 3. Customization and judgement 4. Nature of demand and capacity 5. Method Service Delivery

Service blueprinting

A customer focused approach for service innovation and service improvement

Operations Strategy

A plan for acquiring and allocating company resources to deliver an effective product or service to the customer. The operations strategy is guided by the corporate strategy.

Mass Customization

A way to get the cost advantages of high-volume continuous and repetitive processes while increasing variety.

Volume Flexibility

Accelerating or decelerating the rate of production of service or products quickly to handle large fluctuations in demand -Processes must be designed for excess capacity -Example: USPS

How do business deal with waits

Animate: disneyland distractions, elevator mirror, recorded music Discriminate: avis frequent renter treatment (out of sight) Automate: use computer scripts to address 75% of questoins) Obfuscate: Disneyland staged waits (house of horrors)

Method of Service Delivery

Availability of service outlets Nature of service delivery Top: single site and multiple site Side: Customer travels to service organization -Service firm delivers -Transaction at arm's length

Performance measures

Average time in Line= wq Average time in system= ws Average number in line:Lq average number in system: Ls

Continuous Process

Commodities with high volume, little variety -Aluminum cans, laundry detetgent, gasoline -products follow sequence, operations often run 24/7, line stoppages are very costly, highly specialized equipment, low-skilled operators.

Service Quality Gap Model

Customer Expecations -> Understanding the customer Management perceptions of customer expectations--> Service design Service standards-> conformance Service delivery-> Managing the evidence Customer perceptions-> Customer satisfaction

Project

Customer is highly involved with the design process. Type, sequencing, and complexity of activities changes from project to project. Manager plans and organizes the project, and activities are often outsourced to suppliers. -Unique, one of a kind -Unique sequencing, high complexity, employees and equipment must be flexible, actitives are often outsourced to specialists

Managerial elements

Information, quality, service encounter, matching capacity and demand

Delivery Speed

Quickly filling a customers order -Design processes to reduce lead time -Example: Dell

Development Speed

Quickly introducing a new science or product Cross-functional integration and involvement of critical external suppliers -Example: Li & Fung

Customization

Satisfying the unique needs of each customer by changing service or products design -Low volume, close customer contact, and easily reconfigured -Example: Ritz Carlton

Service Business

Service enterprises are organizations that facilitate the production and distribution of goods, support other firms in meeting their goals, and add value to our personal lives -James Fitzsimmons

Noodles Team Member Actions

Smile! Greet Maintain eye contact Positive body language Make the effort Be professional

Cellular Manufacturing

The complexity off job shop and small batch production environments can be reduced and efficiency increased by producing products that have similar processing characteristics using small assembly lines referred to as cells. The cellular approach also works well in services where information or customer needs can be grouped by their similar processing characteristics.

Cycle Time

The time that it takes to process a unit at a workstation. the ________ at each workstation in a process cannot exceed the takt time

Service Factory

Trucking, airlines, hotels. Customer contact, customization, and labor intensity are low while investment in faciltiies and equipment is high. A range of standard services is offered to customers who tend to value low price above all else. Managers are mainly concerned with utilizing equipment and facilities to a maximum extent. Matching capacity and demand to keep equipment and facilities busy is important to competitiveness and profitibaility

Relationship with Customers

Type of relationship between service organization and its customers Top: Membership Relationship and No formal Relationship Side: Continous delivery of service and discrete transactions

Job Shop

Typically made to order for a specific customer. Because of the high variety of inputs and activites, planning and scheduling jobs can be challenging. Products can spend a lot of time waiting to be worked on, resulting in high work-in-process inventory and the need for expediting. customized, low volume -auto repair, beauty salon -High variety of inputs and process flows, job sequencing is challenging, high work-in-process inventory,highly skilled and flexible workers, general purpose equipment

Improving customer satisfaction

We learned that customer satisfaction is based on difference between expectations and perception -While studies have repeatedly shown that customer perceived wait time is greater than actual wait time -It is the gap between perceived wait time and expected wait time that is critical component of customer satisfaction -IN services where the wait time is five minutes or less, the gap between perceived and actual wait time is approximately 40%(this decreases as the wait time for the service increases) -Closing this gap is important for frequent users who already have a realistic expectation of wait time -for new or infrequent users, managing expected wait time and perceived wait time is critical

Support processes

are all activities carried out by employees who do not have direct contact with customers, but whose functions are crucial to the service.

Engineer to Order

are designed for individual customers and generally have long lead times. (custom built house). Customers must place an order before work begins. Typically use either project or job shop process structures.

Back office/invisible contact employee actions

are nonvisible interactions with customers, such as telephone calls, as well as other activities employees undertake to prepare to serve customers

Front office/visible contact employee actions

are the actions of frontline contact employees that occur as part of a face-to face encounter with customers

Product Layout

arranges resources according to a regularly occuring sequence of activities in the process. An automotive assembly line. Repetitive processes and continuous processes typically use this. Minimize processing times and simplify planning, scheduling, and control because work centers are positioned in a sequence that mirrors the steps needed to assemble the product or serve th ecustomer. the flow of products or customers is visible an easy to trace.

Service Process Matrix

categorizes services base upon the degree of customization/customer interaction and labor/capital intensity involved. Services in the same industry can compete in different ways by adopting process structures.

incremental

changes to an existing service that are valued by customers

Co-Creation of Value

customer is part of process

Customer Actions

include all of the steps that customers take as part of the service delivery process

Servqual

is a survey instrument that asks customers about their expectations and experiences relative to the following five dimensions reliability responsiveness assurance empathy tangibles

Service Blueprinting

is a tool that focuses on understanding the interfaces between customers and service providers, technology, and other key aspects of the process. A cross functional team identifies the service process to be blueprinted, documents the process step-by-step, analyzes the process enhancements or causes of problems, implements improvements, and monitors the results.

Empathy

means caring. The service provider cares that the customer is satisfied or shows concern when something goes wrong. Example: Leaving nuts off a meal if customer says they have an allergy or replaced a meal if it is not cooked properly.

Reliability

means consistency. The service is performed dependably and accurately every time. Example: The postal service delivers your mail at the same time each day

Responsiveness

means meeting customer needs. The service provider is willing to help and do what is needed to fulfill expectations. Example: Having dry cleaning completed a day early if requested.

Tangibles

means the physical environment and/or product associated with the service. The service provider has a clean environment that enhances the experience and supplies products that are satisying to the customer. Example: An upscale restaurant puts designer soaps and lotions in the restrooms. This matches the feel of the restaurant and enhances the overall experience.

Assurance

means trust. The service provider is knowledgeable and the customer can trust the service has been completed properly Example: trusting that the cap to the oil reservoir has been replaced after an oil change.

Functional Layout

multiple copies of similar resources are grouped together in this. Fitness centers and beauty salons use this. Different departments at macy's for shoes, mens clothing

Back-office processes

processes behind the scenes. Back office is the kitchen

Front-office processes

processes involving customer contact. Dining room

Flexible Manufacturing Systems

produce a wider range of products in a wider range of volumes than is economically feasible using conventional equipment.

Assemble to order

products are standardized and do not change with customer orders. However, the components and modules can be assembled in different ways to create end product configurations that meet individual customer needs. (Paint stores mixing colors subway) Use Repetitive processes, and many firms use mass customization

Make to Order

products cover the needs of broad groups of customers but allows for some customization during production. (jet airplane, haircut). Typically use job shop, batch, and cellular process structures

Corporate Strategy

provides an overall direction that serves as the framework for carrying out all the organizations functions. Treacy and Wiersema wrote the book The Discipline of Market Leaders and identified 3 main strategies: Product leadership, customer intimacy, operational excellence

Customer Contact

refers to the presence of the customer in a service process. Services range from those with high customer contact, such as a haircut, to those with low customer contact such as a package delivery. Creates unique challenges in designing, controlling, and operating service processes.

Service Quality Dimensions

reliability responsiveness assurance empathy tangibles

Service Shops

repair shops and hospitals. High degree of capital intensity and high customer interaction/customization.

Physical evidence

represents all of the tangibles that customers see or collect during their contact with a company.

Mass Services

retail banks and gas stations. Meet the standard needs of a large volume of customers. Low customer interaction/customization and high labor intensity.

Competitive Dimensions Def

the _______ of the company are determined by the corporate strategy. The operations strategy will then work to achieve excellence in those areas in which the company has chosen to compete

Takt Time

the maximum total task time allowable at each workstation based on customer demand

Fixed position layout

when a product cannot be moved during its production. Typically used for projects involving large products such as homes. All of the resources and inputs must come together at the products location. A supply chain challenge is ensuring the right people, equipment, and materials all arrive at the work site at the right time. Scheduling is very complex.

Takt Time equation

(Available production time in a time period)/ output needed in that time period to meet customer demand. =(8 hours/shift x 60 minutes/hour)/ 200 pizzas=2.4 minutes per workstation

Efficiency Equation

(sum of all task times/(acutal work stations x takt time) x 100

Theoretical number of stations (N) equation

(total of all task times)/ (takt time)

Challenges faced by service innovation

-Ability to protect intellectual and property technologies -Incremental nature of innovation -Degree of integration required -Ability to build prototypes of conduct tests in a controlled environment

Service Distinctions

-Co-creation of value: Customer is part of process -Relationships are critically important -Service Capability must be flexible -Information created during process often remains available for use by others

Competitive Dimensions

-Cost -Quality -Time -Flexibility

How to address perceived wait time

-Keeping customer occupied in line -Making sure customers are not waiting alone -Explaining wait time for new users

Main Corporate Strategies

-Product Leadership -Customer intimacy -Operational Excellence

Noodles Operations Plan

-Value over low cost -Consistent Quality -Delivery speed -Customization -Variety

Make To Stock

Groceries, retail clothing, electronics, and cars are examples. Products are immediately available, finished products are made in advance of customer orders and held in inventory. Firms must make products baed on forecasts of customer demand. Typically standardized, mature products. Use repetitive assembly lines and continuous processes.

Variety

Handling a wide assortment of services or products efficiently -Capable of larger volumes than processes supporting customization -Example: Amazon.com

On-Time Delivery

Meeting delivery time promises -Planning processes to increase percent of customer orders shipped when promised -Example: UPS

Batch

Moderate volume and variety -Bakery, automotive parts, cinema -Dominant flow patterns, some common inputs, setup time can be high, moderately flexible employees and equipment

Radical

New offerings not previosuly available or new delivery systems

Product Process Matrix

Processes progress through a life cycle just as products do. Describes many service processes. To achieve high performance, a firm's process structure must be aligned with its competitive priorities and marketing strategies. Project (software installation) - Job shop (beauty shop) - Batch (local bakery) - Repetitve process (cell phone assembly) Continous process (oil refinery) Cellular manufacturing Mass customization

Consistent Quality

Producing services or products that meet design specifications on a consistent basis -Processes designed and monitored to reduce errors and prevent defects -Example: Mcdonalds

Service Quality Assessment

1. Expectations exceeded ES<PS (quality surprise) 2. Expectations met ES-PS (satisfactory quality) 3. Expectations not met ES> PS (unacceptable quality)

Service Economy

1. Financial Services -Financing, leasing insurance 2. Manufacturing: Services inside the company: finance, accounting, legal, R&D and design 3. Business Services: Consulting, auditing, advertising, waste disposal 4. Infrastructure Service: Communications, Transportation, utilities, banking 5. Distribution Services: Wholesaling, retailing, repairing 6. Government Services: Military, education, judicial, police and fire protection 7. Personal Services: Healthcare, restaurants, hotels 8. Consumer: (self-service)

Psychology of waiting lines

David Maister, Harvard professor and well-known researcher on service management, has documented several psychological issues with waiting lines or queus. 1. Unoccupied time feels longer than occupied time 2. Pre-process waits feel longer than in-process waits 3. Anxiety makes waits seem longer 4. uncertain waits seem longer than certain waits 5. unexplained waits seem longer than explained waits 6. unfair waits seem longer than equitable waits 7. More valuable the service, the longer people will wait 8. solo waiting feels longer than group waiting 9. uncomfortable waits seem longer than comfortable waits 10) new(or infrequent users) feel they wait longer than frequent users

Low cost Operations

Delivering a service or product at the lowest possible cost -Processes must be designed and operated to make them efficient -Example: Costco

Top Quality

Delivering an outstanding service or product -May require a high level of customer contact and may require superior product features -Example: Ferrari

Design elements

Delivery, facility, location, capacity

Nature of the Service Act

Direct Recipient of the Service People and Things Tangible and intangible actions Peoples Bodies Peoples Minds Physcial possessions Intangible assets

Nature of Demand and capacity

Extent of demand fluctuation over time Extent to which demand exceeds capacity Top: Wide and narrow Side: Peak demand can meet without a major delay. Peak demand regularly exceeds capacity

Customization and Judgement

Extent to which personell excersize judgement in meeting customers needs Degree of customizatoin

Professional Services

Lawyers, doctors interact closely with clients to deliver customized servuces. Tend to be time-consuming and costly because providers are highly skilled and educating.

Repetitive Process

Many customers who want a similar product. Typically made to stock. Standard products with a range of options -Apliances, automobiles, buffet restaruant -All products follow the same sequence, standard methods and materials are used, low-skilled workers specialize in completing a number of activities.

Perceived Quality

Word of mouth Personal needs Past experience Expected service Perceived service


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