Service Process
Process Structure
One of the first decisions a manager makes in designing a well-
functioning process is to choose a process type that best achieves the
competitive priorities for that process. Strategies for designing
processes can be quite different depending on whether a service is
being provided or a product is being manufactured.
Process Structure in Services (1 of 2)
• Customer Contact
– The extent to which the customer is present, is actively involved,
and receives personal attention during the service process
• Customization
– Service level ranging from highly customized to standardized
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Process Structure in Services (2 of 2)
Dimensions of Customer Contact in Service Processes
Dimension High Contact Low Contact
Physical presence Present Absent
What is processed People Possessions or information
Contact intensity Active, visible Passive, out of sight
Personal attention Personal Impersonal
Method of delivery Face-to-face Regular mail or e-mail
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Customer-Contact Matrix for Service
Processes
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Service Process Structuring
• Front Office
• Hybrid Office
• Back Office
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Service process types
High
Diverse/ Professional
Intermittent
complex service
Front Office
Service shop
Process Process Variety Hybrid Office
tasks flow
Mass service
Low
Repeated/ Back Office
Continuous
divided
Low Volume High
Different process types imply different volume–variety characteristics for the process
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Professional service – Front Office
High levels of customer (client) contact.
Clients spend a considerable time in the service process.
High levels of customization with service processes being highly adaptable.
Contact staff are given high levels of discretion in servicing customers.
People-based rather than equipment-based.
A Front-office process has high customer contact where the service provider interacts directly with
the internal or external customer. Because of the customization of the service and the variety of of
service options, many of the steps in it have have considerable divergence. Workflows are flexible,
and they vary from one customer to the next. The high-contact service process tends to be
adapted or tailored to each customer.
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Service shops – Hybrid Office
Medium levels of volumes of
customers.
Medium, or mixed, levels of customer contact.
Medium, or mixed, levels of
customization.
Medium, or mixed, levels of staff discretion.
A hybrid office tends to be in the middle of of the five dimensions of customer contact, or perhaps
high on some contact measures and low on others. A hybrid-office process has moderate levels of
customer contact and standard services, with some options available from which the customer
chooses. The workflow progresses from one workstation to the next, with some dominant paths
apparent.
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Mass service – Back Office
High levels of volumes of customers.
Low to medium levels of customer contact.
Low, or mixed, levels of customization.
Low, or mixed, levels of staff discretion.
A back-office process has low customer contact and little service customization. The work is
standardized and routine, with line flows from one service provider to the next until the service is
completed. Preparing the monthly client fund balance reports in the financial services industry is a
good example. It has low customer contact, low divergence, and a line flow.
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Customer Involvement
• Possible Advantages
– Increased net value to the customer
– Better quality, faster delivery, greater flexibility, and lower cost
– Reduction in product, shipping, and inventory costs
– Coordination across the supply chain
• Possible Disadvantages
– Can be disruptive
– Managing timing and volume can be challenging
– Quality measurement can be difficult
– Requires interpersonal skills
– Multiple locations may be necessary
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Special Considerations for Service
Process Strategies
• Some interaction with customer is necessary, but this
often affects performance adversely
• The better these interactions are accommodated in the
process design, the more efficient and effective the
process
• Find the right combination of cost and customer
interaction
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Service Process Matrix (1 of 3)
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Service Process Matrix (2 of 3)
Mass Service and
Professional Service
• Labor involvement is high
• Focus on human
resources
• Selection and training
highly important
• Personalized services
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Service Process Matrix (3 of 3)
Service Factory and
Service Shop
• Automation of
standardized services
• Restricted offerings
• Low labor intensity
responds well to process
technology and
scheduling
• Tight control required to
maintain standards
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Improving Service Productivity
Techniques for Improving Service Productivity
STRATEGY TECHNIQUE EXAMPLE
Separation Structuring service so Bank customers go to a
customers must go where manager to open a new
the service is offered account, to loan officers
for loans, and to tellers
for deposits
Self-service Self-service so customers Supermarkets and
examine, compare, and department stores
evaluate at their own Internet ordering
pace
Postponement Customizing at delivery Customizing vans at
delivery rather than at
production
Focus Restricting the offerings Limited-menu restaurant
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Improving Service Productivity
(continued)
Techniques for Improving Service Productivity
STRATEGY TECHNIQUE EXAMPLE
Modules Modular selection of Investment and insurance
service selection
Modular production Prepackaged food
modules in restaurants
Automation Separating services that Automatic teller machines
may lend themselves to Ordering via an app
some type of automation
Scheduling Precise personnel Scheduling airline ticket-
scheduling counter personnel at 15-
minute intervals
Training Clarifying the service Investment counselor,
options funeral directors
Explaining how to avoid After-sale maintenance
problems personnel
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