Service Operations Management

Transcription

1 Service Operations Management An overview Saara Brax Saara Brax Academy Postdoctoral Researcher Department of Industrial Engineering and Management Aalto University, School of Science Service Operations Management Today s agenda Service offering Service frameworks and models Service logic Current [research] themes in SOM 1

2 Reasons favouring service business 1) the markets for many manufactured products are maturing 2) many service sectors are less sensitive to economic fluctuations than manufacturing 3) customers increasingly desire a fuller coverage of their needs, which can be provided by goodsservices combinations 4) services provide opportunities to deepen and lengthen the relationships of manufacturing firms with customers Service offering 2

3 What is service? Customer service Service offering Service offering The augmented service offering The service may involve tangible goods and systems Grönroos 2000, Normann 1991, etc. Core service Supporting services Complementary services Satisfies the customer s need Required in order to provide the core service Not critical but enhance the 6 quality and value of the offering 3

4 the core of the offering, provided for a client as a part of a business exchange, is an activity or performance. Service thus is an activity, and therefore can be considered as process-based. Service definition (Brax 2013, 39) Services are offerings in which at least the core part of the market exchange between a provider and a customer is provided in the form of process-based components that are inseparable from their production resources and coinvolve both parties. 4

5 Product services? Satisfies the customer s need Product core Required in order to provide the core service Supporting services Complementary services Not critical but enhance the quality 9 and value of the offering Product services? Satisfies the customer s need Product core Required in order to provide the core service Support services Complementary services Not critical but enhance the quality 10 and value of the offering 5

6 Service frameworks and models A product consists of two kinds of elements: Services and goods as dimensions of the product Goods dimension Service dimension Information is considered as an intangible good (i.e. not a process) 6

7 Typology of offerings Kotler 2003, pp : Pure tangible good Tangible good with accompanying services Hybrid Major service with accompanying minor goods and services Pure service Product business Solution business Service business IHIP: palvelujen geneeriset piirteet Intangibility Heterogeneity Inseparability Perishability Aineettomuus Palvelut tuottavat pääasiallisesti hyötyjä aineettomassa muodossa Heterogeenisyys Palvelut eivät ole keskenään identtisiä Samanaikaisuus Palvelun tuottaminen ja kuluttaminen tapahtuu samalla hetkellä Katoavaisuus Palvelu on olemassa vain sillä hetkellä kuin se tuotetaan 7

8 IHIP: palvelujen geneeriset piirteet Intangibility Heterogeneity Inseparability Perishability Aineettomuus Palvelut tuottavat pääasiallisesti Palvelua hyötyjä ei aineettomassa voi omistaa muodossa Heterogeenisyys Palvelut eivät ole Asiakas keskenään identtisiä vaikuttaa palveluprosessiin Samanaikaisuus Palvelun tuottaminen Ei voi ja kuluttaminen varastoida - Kapasiteetin/ tapahtuu samalla kysynnän hetkellä hallinta Katoavaisuus Palvelu on olemassa vain sillä hetkellä Myydään kuin se tuotetaan lupausta Environment Image & reputation Situational factors Knowledge & competence Culture, organizational climate Motivation Quality systems, etc. Individuals Relationships Customer knowledge Tools Contracts Equipment Object of service Material components Structure Partners and networks Client Physical goods Performance criteria Pricing Value Costs Resource dimension Competences Context Organization Value capturing model Concept dimension Value proposition model Service outcome Focus of value creation Value creation model Observed/material output Target markets Process dimension Quality concept Product strategy Service experience Management Benefit Maintenance Integration Production&delivery process Client process The service offering a system view Elements and combination Process model Resource model 8

9 Process views 17 The key difference between goods and service offerings CLOSED vs. OPEN system/process Client Production chain for goods Production process Output (physical product) Client benefit Client Service production Production process Outcome Client benefit 9

10 The system has two subsets Customer interface operations (front office, service encounter) Open system Internal operations (back office processes) Closed system Line of visibility Openness of the system as a design principle Client Production process Service blueprint components Physical evidence Menu The catered meal Service Blueprinting Customer actions Onstage contact employee actions Calls room service Receive food Deliver food Line of interaction Line of visibility Backstage contact employee actions Support processes (Muokattu; Bitner et al. 2007, 7.) Takes food order Prepare food Line of internal interaction 10

11 Organizational design: The decoupling logic in services FRONT OFFICE Direct customer contact Responsive interface Customer oriented effectiveness Multi skilled employees L I N E O F V I S I B I L I T Y BACK OFFICE Hidden from the customer Buffered technical core Classic OM principles more applicable Specialization 11

12 A failure in service delivery typically means the service needs to be performed again A failure free process described in the previous example contains 19 process steps and 7 decision points If each decision point turns out negative the first time, the process is 42 steps and 16 decision points long Processes as algorithms STANDARD PROCESS Pre-defined, is repeated, go/no-go decisions ROUTINE PROCESS Robust process structure and alternatives pre-defined, choice decisions NON-ROUTINE PROCESS Cannot be pre-defined, decisions based on investigation and search for choices (Based on Lillrank 2003) 12

13 For further consideration: the rules your process follows? What/who triggers or initiates your process? Who makes decisions regarding your process? Is your process demand-critical, i.e. all demand must be satisfied, or resource-critical: i.e. all capacity should be used? What are the main restrictions/bottlenecks for your process? Is your service value based on the experience (the process itself) or the outcome (produced endstate)? Analytical services case example 13

14 Customer Activity Chain Service growth opportunities can be analyzed with the CAC mapping Temporal reconfiguration: services are not added but activities in the primary activity chain are altered and taken charge by the service provider. Spatial expansion: services are introduced to adja-cent opportunity spaces, customer relationship is broadened. The connection be-tween adjacent chains and the primary chain activities do not have to be shared activities. CAC is a chronologically structured description of the activities associated with the use of the product, from end to end, and each activity in it is linked logically. The CAC leads to defined customer outcomes, i.e. benefits. Sawhney et al Temporal expansion: adding activities before, after or in between activities of the primary activity chain, customer relationship is deepened. Spatial reconfiguration: taking charge of activities in customer s adjacent activity chains. A service operation is a network of processes In the process based service offering, several process layers intertwine Provider s processes - Actors, functions, job roles, units Customer s processes - Customer, payer, consumer/user - Customer s customers Third parties - Partners, contractors, suppliers - Other stakeholders, e.g. regulators, the public 14

15 Quality in services Grönroos service quality model Expected service Perceived Service Quality Experienced service Market communication Image Word-of-Mouth Customer Needs Modified from: Grönroos 1998; Donabedian 1980 Giving promises The relatively stable characteristics of the service provider (Donabedian 1980) Technical quality: OUTCOME Keeping promises IMAGE Structural quality: RESOURCES Functional quality: PROCESS 15

16 The SERVQUAL model of service quality Re-drawn. Source: Parasuraman, Zeithaml & Berry 1985, p. 44 Quality gaps have impact on perceived quality: GAP 1 between consumer expectations and management perceptions of those expectations GAP 2 between management perceptions of consumer expectations and the firms service quality specifications GAP 3 between service quality specifications and service delivery GAP 4 between actual service delivery and communications about service GAP 5 is a function of all gaps and is the quality that the customer perceives Increasing expectations 16

17 Service logic Target of the service Product Supporting Services (PSS) Customer Supporting Services (CSS) Service Supporting Customer s Networks Mathieu 2001b, Cova et al

18 Servitization typology Levels of organizational intensity The service addition does not redefine or extend the firm s existing main product lines The service addition extends the existing firms offering and practices but does not influence basic beliefs The firm redefines itself as a service business, practices and basic beliefs change accordingly Tactic Strategic Cultural (Based on Mathieu 2001b, modified) Organizationalintensity Servitization typology Levels of service specificity Service specificity Service as a product Product services Customer service The service can be sold as a stand-alone offering; the customer does not have to purchase any goods to consume the service The service offering is an additional module used to extand a product bundle (e.g. installation of the product) The service is provided without additional costs and its main purpose is to facilitate the benefits + sales of the good 18

19 Servitization typology Service specificity Service as a product Product services Customer service Marketing benefits + (Based on Mathieu 2001b, modified) Tactic Strategic Cultural Organizationalintensity Servicedominant logic Vargo & Lusch 2008 FP1: Service is the fundamental basis of exchange FP2: Indirect exchange masks the fundamental basis of exchange FP3: Goods are a distribution mechanism for service provision FP4: Operant resources are the fundamental source of competitive advantage FP5: All economies are service economies FP6: The customer is always a cocreator of value FP7: The enterprise cannot deliver value, but only offer value propositions FP8: A service-centered view is inherently customer oriented and relational FP9: All social and economic actors are resource Integrators FP10: Value is always uniquely and phenomenologically determined by the beneficiary 19

20 Current [research] themes in SOM Service modularity, Process modularity A B C D E Customer s customer Customer s back office Line of visibility Customer s front office Shared process layer Provider s front office Line of visibility Provider s back office Provider s supply chain etc. 20

21 Servitization: from manufacturer to service provider Source: Oliva & Kallenberg 2003, 162 IoT and use of data, big or small 21

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