Chapter 5

The Service
Delivery
Process
 Opening Vignette:
Chipotle Mexican Grill

• Chipotle sells only fresh foods and prepares everything

by hand
• Speed is critical
• Chipotle’s delivery system is much like an assembly line
– Employees manage throughput by preparing food and setting up
the line before customers arrive
– An expeditor and manager back up the line employees to move
customers through the line quickly, minimize bottlenecks, and fill
unmet service needs
• More than 1,600 stores reap more than $4 billion in sales
per year

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Stages of Operational Competitiveness

• Strategically, the service firm can choose to view its

operations as a necessary evil to complete day-to-day
tasks, or use its operations as the key component of its
competitive strategy
• The manner in which “operational competitiveness” is
embraced can be described by four stages:
1. Available for Service
2. Journeyman
3. Distinctive Competencies Achieved
4. World-Class Service Delivery

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Stage 1: Available for Service

• Operations are viewed as a necessary evil

• Operations are at best reactive to the
needs of the rest of the organization and
deliver the service as specified
• Primary mission is to avoid mistakes
• Technological investment, investment in
training, and personnel costs are
minimized

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 Stage 2: Journeyman

• Prompted by the arrival of competition

• Operations become more outward-looking
• Characterized by the introduction of
technologically based systems for the
primary purpose of cost savings
• Employees are given procedures to follow
• Management focuses on ensuring that
standardized procedures are followed

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Stage 3:
Distinctive Competencies Achieved

• The firm has mastered the core service and understands

the complexity of changing current operations
• View of technology changes from “cost savings” to
“enhancing the effectiveness of service to customers”
• Involves a philosophical change of balancing efficiency
with effectiveness
• Front-line workers may select from alternative procedures

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Stage 4:
World-Class Service Delivery

• The company’s name is synonymous with

service excellence
• Operations become adaptive and
innovative
– Technology provides a means to accomplish
tasks that the competition cannot easily
duplicate

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Figure 5.1: Major Design Trade-Offs in High- and
Low-Contact Systems

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 Marketing and Operations:
Balance Is Critical

• The marriage of consumers’ needs with the

technology and manufacturing capabilities of the
firm
– The marriage involves compromise
• Customer needs can seldom be met completely and
economically
• Success in services marketing demands a much
greater understanding of the constraints and
opportunities posed by the firm’s operations

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Figure 5.2: Sources of Cooperation/Conflict
Between Marketing and Operations

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Applying Efficiency
Models to Services

• The servuction system itself is an operations

nightmare
– It is impossible to use inventories
– It is impossible to decouple production from the
customer
– The system is linked directly to the market
• Demand varies from day to day, hour to hour, minute to
minute
– Massive problems in capacity planning and utilization

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Operations Solutions
for Service Firms

1. Isolate the technical core

– Different management philosophies should be
adopted for each separate unit of production
– The technical core should be subjected to
production-lining approaches
– High-contact systems should sacrifice
efficiency in the interest of the consumer
– Decoupling: dissociating the technical core
from the servuction system

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Operations Solutions
for Service Firms (cont’d)

2. Production-lining the whole system

– Production-line approach: the application of
hard and soft technologies in a service
operation in order to produce a standardized
service product
• Hard technologies: hardware that facilitates the
production of a standardized product
• Soft technologies: rules, regulations, and
procedures that facilitate the production of a
standardized product

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Operations Solutions
for Service Firms (cont’d)

3. Creating flexible capacity

4. Increasing customer participation
5. Moving the time of demand

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 Flowcharts

• Identify directions in which processes flow

• Identify the time it takes to move from one
process to the next
• Identify the costs involved with each process step
• Identify the amount of inventory buildup at each
step
• Identify bottlenecks in the system
– Bottlenecks: points in the system at which consumers
wait the longest periods of time

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Art of Blueprinting

• Blueprinting: the flowcharting of a service

operation

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 Figure 5.3: Blueprint for
Cafeteria-Style Restaurant

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Art of Blueprinting

• Service cost per meal: the labor costs associated with

providing a meal on a per-meal basis (total labor
costs/maximum output per hour)
• Process time: calculated by dividing the activity time by
the number of locations at which the activity is performed
• Activity time: the time required to perform one activity at
one station
• Stations: a location at which an activity is performed
within a service blueprint
• Maximum output per hour: the number of people that
can be processed at each station in one hour

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Figure 5.4: Modified Blueprint for
Cafeteria-Style Restaurant

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Figure 5.5: Alternate Blueprint for
Cafeteria-Style Restaurant

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Figure 5.6: Flowchart of a Discount Brokerage
Service

• Fail points: (represented by “F” in the figure) points in the system at which the
potential for malfunction is high and at which a failure would be visible to the customer
and regarded as significant

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 Constructing the Service Blueprint

• One-sided blueprint: an unbalanced blueprint based on management’s

perception of how the sequence of events should occur
• Convergent scripts: employee/consumer scripts that are mutually
agreeable and enhance the probability of customer satisfaction
• Divergent scripts: employee/consumer scripts that “mismatch” and
point to areas in which consumer expectations are not being met
• Two-sided blueprint: a blueprint that takes into account both employee
and customer perceptions of how the sequence of events actually occurs
• Script norms: proposed scripts developed by grouping together events
commonly mentioned by both employees and customers, and then
ordering those events in their sequence of occurrence

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 Blueprinting and New-Product Development:
The Roles of Complexity and Divergence

• Complexity—a measure of the number and

intricacy of the steps and sequences that
constitute a process
– Specialization positioning strategy
• Reduces complexity
– By unbundling the different services offered
– Penetration positioning strategy
• Increases complexity
– By adding more services and/or enhancing current services to
capture more of a market

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Blueprinting and New-Product Development:
The Roles of Complexity and Divergence (cont’d)

• Divergence—a measure of the degrees of

freedom service personnel are allowed when
providing a service
– Volume-oriented positioning strategy
• Reduces divergence
– Produces standardized output and reduces costs but does so at
the expense of increasing conformity and inflexibility
– Niche positioning strategy
• Increases divergence
– Tailors the service experience to each customer

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Figure 5.7: Park Avenue Florist

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Figure 5.8:
Florist Services: Alternative Design

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.