Ops MGMT Exam 2
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
