Ch. 4 Product & Service Design
SCM 352 Operations Mgt
Dr. Ron Lembke
How are Services Different?
 Everyone is an expert on services
 What works well for one service provider doesn’t




...
Degree of Customer Contact
 More customer contact, harder to standardize

and control
 Customer influences:
 Time of de...
3 Approaches
 Which is Best?
 Production Line
 Self-Service
 Personal attention
What do People Want?
 Amount of friendliness and helpfulness
 Speed and convenience of delivery
 Price of the service
...
Service-System Design Matrix
Degree of customer/server contact
High

Buffered
core (none)

Permeable
system (some)

Reacti...
Impact of Life Cycle
iTunes

CDs

DVD
Audio

Cassettes
Records
MiniDisc
DAT
8-Tracks

Introduction

Growth

Maturity

Decl...
Impact of Life Cycle

Records
DAT
Introduction

Growth

Maturity

Decline
Applying Behavioral Science
 The end is more important to the lasting






impression (Colonoscopy)
Segment pleasure...
Restaurant Tipping
Normal

Experiment

Introduce self(Sun brunch)
15%
23%
Smiling (alone in bar)
20%
48%
 Waitress
28%
33...
Modular Components
 Take advantage of modules: parts or products

previously prepared
 Restaurants: prepared ingredients...
Mass Customization
 Highly customized
 Integrate design, processes, supply network

 Supply components cheaply to produ...
Fail-Safing
 “poka-yokes” – Japanese for “avoid mistakes”
 Not possible to do things the wrong way






Indented t...
Blueprinting
Fancy word for making a flow chart
“line of visibility” separates what customers can see
from what they can’t...
Review on Flow Chart Mapping
Symbols
Start or finishing point
Step or activity in the process
Decision point (typically re...
Our Flow Chart Example
Dealer
Faxes
Order

Paper
Order
Created
4% of
orders lost

Order Sits
In Fax
In Box
0 to 4 hours
2 ...
Group
 Group yourselves into three (3)
 Design a service and create a flow chart

describing the flow of the service you...
Buspro infosheet4
Buspro infosheet4
Buspro infosheet4
Buspro infosheet4
Buspro infosheet4
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Buspro infosheet4

  1. 1. Ch. 4 Product & Service Design SCM 352 Operations Mgt Dr. Ron Lembke
  2. 2. How are Services Different?  Everyone is an expert on services  What works well for one service provider doesn’t      necessarily carry over to another Quality of work is not quality of service “Service package” consists of tangible and intangible components Services are experienced, goods are consumed Mgmt of service involves mktg, personnel Service encounters mail, phone, F2F
  3. 3. Degree of Customer Contact  More customer contact, harder to standardize and control  Customer influences:  Time of demand  Exact nature of service  Quality (or perceived quality) of service
  4. 4. 3 Approaches  Which is Best?  Production Line  Self-Service  Personal attention
  5. 5. What do People Want?  Amount of friendliness and helpfulness  Speed and convenience of delivery  Price of the service  Variety of services  Quality of tangible goods involved  Unique skills required to provide service  Level of customization
  6. 6. Service-System Design Matrix Degree of customer/server contact High Buffered core (none) Permeable system (some) Reactive system (much) Low Face-to-face total customization Face-to-face loose specs Sales Opportunity Face-to-face tight specs Internet & on-site Mail contact technology Low Production Efficiency Phone Contact High
  7. 7. Impact of Life Cycle iTunes CDs DVD Audio Cassettes Records MiniDisc DAT 8-Tracks Introduction Growth Maturity Decline
  8. 8. Impact of Life Cycle Records DAT Introduction Growth Maturity Decline
  9. 9. Applying Behavioral Science  The end is more important to the lasting     impression (Colonoscopy) Segment pleasure, but combine pain Let the customer control the process Follow norms & rituals Compensation for failures: fix bad product, apologize for bad service
  10. 10. Restaurant Tipping Normal Experiment Introduce self(Sun brunch) 15% 23% Smiling (alone in bar) 20% 48%  Waitress 28% 33%  Waiter (upscale lunch) 21% 18% “…staffing wait positions is among the most important tasks restaurant managers perform.”
  11. 11. Modular Components  Take advantage of modules: parts or products previously prepared  Restaurants: prepared ingredients, assembled to order  Suppliers can develop new, interesting products to use more quickly, cheaply  Variety is gained by different combinations of same components
  12. 12. Mass Customization  Highly customized  Integrate design, processes, supply network  Supply components cheaply to production points  Fast, responsive production, quick delivery  Higher weight, lower value
  13. 13. Fail-Safing  “poka-yokes” – Japanese for “avoid mistakes”  Not possible to do things the wrong way      Indented trays for surgeons ATMs beep so you don’t forget your card Pagers at restaurants for when table ready Airplane bathroom locks turn on lights Height bars at amusement parks
  14. 14. Blueprinting Fancy word for making a flow chart “line of visibility” separates what customers can see from what they can’t Flow chart “back office” and “front office” activities separately.
  15. 15. Review on Flow Chart Mapping Symbols Start or finishing point Step or activity in the process Decision point (typically requires a “yes” or “no”) Input or output (typically data or materials) Document created Delay Inspection Move activity Typical, but others may be used as appropriate © 2008 Pearson Prentice Hall --- Introduction to pter 3, Slide 20 Operations and Supply Chain Management, 2/e --- Bozarth and Handfield, ISBN: 0131791036
  16. 16. Our Flow Chart Example Dealer Faxes Order Paper Order Created 4% of orders lost Order Sits In Fax In Box 0 to 4 hours 2 hours on average Order Sits In Clerk’s In Box Internal Mail Delivers Fax 0.5 to 1.5 hours 1 hour on average 1% of orders lost 0 to 2 hours 1 hour on average Clerk Processes Order 5 minutes 10 to 45 minutes 20 minutes on average Dealer Receives Order Transport Firm Delivers Order 1 to 3 hours 2 hours on average No history of lost, damaged, or incorrect deliveries Inspector Checks Order Worker Picks Order 2 minutes 0.5% of orders incorrect © 2008 Pearson Prentice Hall --- Introduction to pter 3, Slide 21 Operations and Supply Chain Management, 2/e --- Bozarth and Handfield, ISBN: 0131791036 YES Is Item In Stock? NO Clerk Notifies Dealer and Passes Order On to Plant
  17. 17. Group  Group yourselves into three (3)  Design a service and create a flow chart describing the flow of the service you will introduce. (Use proper flowchart symbols)  Submit this on Jan. 16, 2013 (short bondpaper)

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