Designing Effective Service Delivery Systems
Uploaded by
BharathKumarMDesigning Effective Service Delivery Systems
Uploaded by
BharathKumarM- Introduction
- Distinctive Characteristics
- Product/Service Mix
- Intangible Nature of Services
- Simultaneity
- Time Dependent Capacity
- Customer Management
- Multi-site Management
- Factors involved in delivering services
- Service Delivery Systems
- Service Delivery System Design
- Service Profiling
Module 8
Designing Service Delivery System
Introduction
A service delivery system is the way in which the service concept and
service package are provided to the consumer.
The service delivery system is dictated by and defined by the service
concept.
Key aspects considered are:
Core service
Supporting goods and services
Facilitating goods and services
Role of staff
Entertainment provided
Distinctive Characteristics
Services differ from products in that they have a few defining
characteristics:
Participation of the customer in the service process
Simultaneity - Services need to be produced and consumed
simultaneously.
Perishability A service is perishable. It cannot be stored. If it is not
consumed, it is wasted.
Intangibility Services are not tangible like products.
Heterogeneity Service differs from customer to customer. This
happens due to the service being intangible and the customer being a
part of service process.
Product/Service Mix
Product/service mix or a product service
system is when a firm offers a mix of both
products and services instead of just products.
Product service mix emerged as a result of the
efforts of traditional manufacturing firms to
cope with the changes in the market.
This also provides higher profits than products
alone.
Intangible Nature of Services
Services are ideas and concepts; products are things
Service innovations are not patentable
To secure the benefits of a novel service concept, the firm must expand extremely rapidly
and preempt any competitors
Franchising has been the vehicle to secure market areas and establish a brand name
Intangibility of a service also poses a problem to customers
Customers cannot hold and feel a service like a product.
Customers depend on the reputation of a service firm.
In many areas the government has set up acceptable service levels.
Registration, licensing and other regulations are imposed to control and guarantee
acceptable standards in service.
This could, however, potentially stifle innovation.
Simultaneity
Services must be consumed as they are produced. They cannot be stored.
Services are open systems as opposed to how product systems are closed
systems.
Manufacturing systems use inventory as a buffer to absorb the impact of
changing demand.
Service systems, however, cannot have such a buffer. They must absorb
all the impact of changing demand directly.
In a service system, customer waiting/queuing is used to decouple various
stages of the service.
Quality control is more difficult to incorporate in a service system as the
services are produced and consumed simultaneously.
Time Dependent Capacity
One of the major side effects of services being simultaneous and
perishable is that the capacity of a service system cannot be fixed.
Most customer interactions will be cyclic, with peaks and troughs.
Three ways of managing this are:
1.
2.
3.
Smooth demand by:
a)
Using reservations or appointments.
b)
Using price incentives (e.g., giving telephone discounts for evening and weekend calls).
c)
De-marketing peak times (e.g., advertising to shop early and avoid the Christmas rush).
Adjust service capacity by:
a)
Using part-time help during peak hours.
b)
Scheduling work shifts to vary workforce needs according to demand (e.g., telephone
companies staff their operators to match call demand).
c)
Increasing the customer self-service content of the service.
Allow customers to wait.
Customer Management
Customers are a part of the service process
Since they are not just onlookers, their presence creates a dynamic that needs
to be managed.
The service area should have facilities that meet the customers
expectations.
Staff need to be sensitized to the impact that their role will have on the
customer.
The extent to which staff is allowed to customize the service offering within
the service specification needs to be identified, agreed and managed.
The social dynamics of the customer experience from entering the
system to leaving it must be accommodated within the system. The system
must be designed with these goals factored into the design.
Multi-site Management
In service systems, most often, customers have to meet with the service
provider. The customer and the service have to be physically present in the
same location.
Due to such a constraint, most service organizations consist of many units
of small capacity, spread out over multiple locations.
Each location may be selected for its proximity to existing and potential
customers.
Managing such systems having multiple locations brings along with
it he challenge of operating on the field, instead of a controlled
factory environment.
To maintain consistence of service across locations, service
providers have to combine standardization within the system with
extensive training, licensing and reviews by external agencies.
Factors involved in delivering services
1) TECHNOLOGY/PEOPLE MIX.
- Technology needed for providing a service
- People with the necessary skills for providing the service.
2) NATURE OF THE SERVICES TO BE DELIVERED.
- Services could be of different complexities.
- What is processed in the service.
3) CATEGORIES OF SERVICES.
- Tangible actions to people's bodies haircutting, restaurants
- Tangible actions to physical goods laundry, courier service etc.
- Intangible actions directed at people's minds training,
education etc.
- Intangible actions directed at people's intangible assets
Insurance, legal services.
4) ORDER-WINNERS AND ORDER QUALIFIERS.
SERVICE DELIVERY SYSTEMS:
Service Delivery System is where the final assembly of the elements takes place and
the product is delivered to the customers - Christopher Lovelock.
All apparatus physical and procedural required by front-line and support staff
Service Delivery System (SDS) should be
- Customer friendly.
- Employee friendly. (Because service failures are often caused by delivery systems not
supporting, or even making it hard for staff to deliver service)
- Incorporate a feedback loop. (It should be easy to give feedback. Research has found
that less than 5% of the complaints reach the head-office and it is very important to
close the loop)
- Albrecht and Zemke.
SERVICE DELIVERY SYSTEM DESIGN:
1) Service Concept.
2) Service Package.
3) Performance Specifications (Customer Requirements & Expectations).
4) Design Specifications (Activities, Facilities, Provider Skills, Cost and time
estimates).
5) Delivery Specifications (Schedule, Deliverable, Locations).
IT BASED AND OTHER SERVICE SYSTEM DESIGN:
Service Profiling
