topic 4 new service developmnt.ppt

7/29/2019 Topic 4 New Service Developmnt.ppt

1/23

New Service Development

and Process Design


2/23

Customer Benefit Package

HierarchyLevel

Element Core GoodExample

Core ServiceExample

Category Business Custom

clothier

Business

hotel

First Core Business

suits

Room for

the night

Second Peripheral

Good

Garment

bag

Bath robe

Peripheral

Service

Deferred

payment

plans

In house

restaurant

Third Variant Coffee

lounge

Airport

shuttle


3/23

Learning Objectives Discuss the new service development process.

Prepare a blueprint for a service operation.

Describe a service process using the dimensions of

divergence and complexity.

Use the taxonomy of service processes to classify a service

operation.

Compare and contrast the generic approaches to service

system design.

Place an example of service automation in it proper

category.

Discuss the managerial issues associated with the adoption

of new technology.


4/23

Levels of Service Innovation

Radical Innovations Major Innovation: new service driven by information and

computer based technology

Start-up Business: new service for existing market

New Services for the Market Presently Served: newservices to customers of an organization

Incremental Innovations

Service Line Extensions: augmentation of existing service

line (e.g. new menu items) Service Improvements: changes in features of currently

offered service

Style Changes: modest visible changes in appearances


5/23

New Service Development Cycle

People

Technology Systems

Product

Full Launch Development

Design AnalysisTools

Enablers

Formulation

of new servicesobjective / strategy

Idea generation

and screening

Concept

development and

testing

Business analysis

Project authorization

Full-scale launch

Post-launch review

Service design

and testing

Process and system

design and testing

Marketing program

design and testing Personnel training

Service testing and

pilot run

Test marketing


6/23

Technology Driven Service Innovation

Power/energy - International flights with jet

aircraft

Physical design - Enclosed sports stadiums

Materials - Astroturf

Methods - JIT and TQM

Information - E-commerce using the Internet


7/23

Classification of Service Automation

Fixed-sequence (F) - parking lot gate

Variable-sequence (V) - ATM

Playback (P) - answering machineNumerical controlled (N) - animation

Intelligent (I) - autopilot

Expert system (E) - medical diagnosis

Totally automated system (T) - EFT


8/23

Adoption of New Technology in

Services

Challenges of Adopting New Technology

The Process is the Product

Back Office vs Front Office Changes

Need for Standardization

Managing the New Technology Adoption

Process

Ten step process with concern for

employees and customers


9/23

Example of Service Blueprinting

Brush

shoes

Apply

polish

Fail

point

BuffCollect

payment

Clean

shoes Materials

(e.g., polish, cloth)

Select and

purchase

supplies

Standard

execution time

2 minutes

Total acceptable

execution time5 minutes

30

secs

30

secs

45

secs

15

secs

Wrong

color wax

Seen by

customer 45

secs

Line of

visibility

ot seen by

customer but

necessary to

performance


10/23

Service Blueprinting

(Bank Lending Operation Example)

Loan application Branch Officer Pay book

30min--1hr.

Line of visibility

Deny

1 day 2 days 3 days

Fail point Customer wait Employee decision

===========

===== $ 0 $ ==== =====

ReceivePayment

FinalpaymentDecline Notify

customerIssuecheck

Confirm

Creditcheck

AcceptPrint

paymentbook

DelinquentClose

account

Verifyincome

dataInitial

screening

VerifypayerEmployer Credit

bureau Branchrecords

Bankaccounts

Accounting

Data baserecords

FW

ww

F

F

F

F

F

F


11/23

Service Blueprint of Luxury Hotel


12/23

Strategic Positioning

Through Process Structure

Degree of Complexity: Measured by the

number of steps in the service blueprint.

For example a clinic is less complex than a

general hospital.

Degree of Divergence: Amount of

discretion permitted the server to customize

the service. For example the activities of an

attorney contrasted with those of a

paralegal.


13/23

Structural Alternatives for a Restaurant

No Reservations

Self-seating. Menu on Blackboard

Eliminate

Customer Fills Out Form

Pre-prepared: No Choice

Limit to Four Choices

Sundae Bar: Self-service

Coffee, Tea, Milk only

Serve Salad & Entree Together:Bill and Beverage Together

Cash only: Pay when Leaving

TAKE RESERVATION

SEAT GUESTS, GIVE MENUS

SERVE WATER AND BREAD

TAKE ORDERS

PREPARE ORDERS

Salad (4 choices)

Entree (15 choices)

Dessert (6 choices)

Beverage (6 choices)

SERVE ORDERS

COLLECT PAYMENT

Specific Table Selection

Recite Menu: Describe Entrees & Specials

Assortment of Hot Breads and Hors Doeuvres

At table. Taken Personally by Maltre d

Individually Prepared at table

Expand to 20 Choices: Add Flaming Dishes;

Bone Fish at Table; Prepare Sauces at Table

Expand to 12 Choices

Add Exotic Coffees; Sherbet between

Courses; Hand Grind Pepper

Choice of Payment. Including House Accounts:

Serve Mints

LOWER COMPLEXITY/DIVERGENCE CURRENT PROCESS HIGHER COMPLEXITY/DIVERGENCE


14/23

Structural Positioning of

Healthcare Services

HIGH COMPLEXITY

* Hospitals Services

* General Practitioner:

* Forensic-Testing Lab Diagnosis & Treatment

* Diagnostic services only

Specialist:

* Treatment only

LOW DIVERGENCE HIGH DIVERGENCE

Outpatient Clinic: Limited

* Treatment: e.g. Broken

Bones/Minor Burns only

* Retailer of

Orthopedic Supplies

* X-Ray Lab * Medical

Counseling

LOW COMPLEXITY


15/23

Taxonomy of Service ProcessesLow divergence High divergence

(standardized service) (customized service)

Processing Processing Processing Processing Processing Processing

of goods Information of people of goods Information of people

Dry Check Auto repair Computer

No Cleaning processing Tailoring a programming

Customer Restocking Billing for a suit Designing a

Contact a vending credit card building

machine

Ordering Supervision

Indirect groceries of a landing

customer from a home by an air

contact computer controller

No Operating Withdrawing Operating Sampling Documenting Driving a

customer- a vending cash from an elevator food at a medical rental car

service machine an ATM Riding an buffet dinner history Using a

worker Assembling escalator Bagging of health club

interaction premade groceries Searching for facility

(self- furniture information

Direct service) in a library

Customer Customer Food Giving a Providing Home Portrait Haircutting

Contact service service in a lecture public carpet painting Performing

worker restaurant Handling transport- cleaning Counseling a surgical

interaction Hand car routine bank a tion Landscaping operation

washing transactions Providing service

massvaccination


16/23

Generic Approaches to Service Design

Production-line

Limit Discretion of Personnel

Division of Labor

Substitute Technology for People

Standardize the Service Customer as Coproducer

Substitution of Customer Labor for Provider Smoothing Service Demand

Customer Contact Degree of Customer Contact Separation of High and Low Contact Operations

Information Empowerment Employee and Customer


17/23

Production-line Approach to

Service Design

Limit Discretion of Personnel

Division of Labor

Substitute Technology for People

Standardize the Service


18/23

Customer Participation

Encourage Co-production by Customer

Free air miles for Internet ticketing

Promote Demand SmoothingHalf-price drinks before 6:00pm


19/23

Customer Contact View of Services

Degree of Customer Contact Influences

Potential Efficiency of Service

Separate High- and Low-Contact

Operations

Consider Sales Opportunity and Production

Efficiency Tradeoff


20/23

Service-System Design Matrix

Mail contact

Face-to-face

loose specs

Face-to-face

tight specsPhone

Contact

Face-to-face

totalcustomization

Buffered

core (none)

Permeable

system (some)

Reactive

system (much)

High

LowHigh

Low

Degree of customer/server contact

Internet &

on-site

technology

Sales

Opportunity

Production

Efficiency


21/23

Information Empowerment

Employees

Relational Databases

Customers

Internet Web Site


22/23

Discussion Questions

What ethical issues are raised in the promotion ofsales during a service transaction?

What are some drawbacks of customerparticipation in the service delivery process?

What are the limits in the production-lineapproach to service?

Give an example of a service in which isolation ofthe technical core would be inappropriate.


23/23

INTERACTIVE CLASS EXERCISE

The class breaks into small groups and

prepares a service blueprint for Village

Volvo.

topic 4 new service developmnt.ppt

Documents