Service Design and Layout Types Quiz

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Questions and Answers

Which layout type is best suited for high-volume, standardized services?

  • Fixed-Position Layout
  • Functional Layout
  • Product Layout (correct)
  • Cell Layout

What is a key feature of Functional Layout in service design?

  • Arranging service delivery in a linear sequence
  • Providing resources at a fixed location for services
  • Clustering similar functions together (correct)
  • Grouping related services in distinct areas

Which layout design type could potentially lead to increased customer wait times?

  • Fixed-Position Layout
  • Product Layout
  • Cell Layout
  • Functional Layout (correct)

What distinguishes Fixed-Position Layout from other layout types?

<p>It requires careful coordination and remains in one location. (B)</p> Signup and view all the answers

Which layout type is designed for varied services to enhance efficiency?

<p>Cell Layout (A)</p> Signup and view all the answers

What does Service Dominant Logic (SDL) emphasize about value creation?

<p>Value is co-created during customer interactions. (B)</p> Signup and view all the answers

How can services and products be characterized in relation to each other?

<p>Goods serve as exchange mechanisms for services. (B)</p> Signup and view all the answers

What are 'explicit services' as defined in the content?

<p>Observable benefits experienced by the senses. (B)</p> Signup and view all the answers

What does the service package primarily involve?

<p>The customer's contact with both physical items and service. (C)</p> Signup and view all the answers

Why is it more difficult to set performance standards for services compared to physical goods?

<p>Individuality and intangibility complicate standards assessment. (D)</p> Signup and view all the answers

During which situations does production and consumption occur simultaneously?

<p>At a restaurant when dining. (D)</p> Signup and view all the answers

Which of the following describes implicit services?

<p>They are psychological benefits perceived vaguely. (C)</p> Signup and view all the answers

What aspect of customer experience is particularly emphasized in service delivery?

<p>Managing the customer experience throughout the process. (C)</p> Signup and view all the answers

What refers to features that surprise and delight customers in a service environment?

<p>Delighter (A)</p> Signup and view all the answers

Which term describes the basic characteristics taken for granted in a service setting?

<p>Must have (B)</p> Signup and view all the answers

What is the primary goal of service recovery?

<p>To positively handle customer complaints (A)</p> Signup and view all the answers

What does the term 'zero defections' refer to?

<p>Retaining every customer that can be profitably served (B)</p> Signup and view all the answers

Which of the following statements correctly describes the Servqual model?

<p>It assesses the difference between expected and perceived service (B)</p> Signup and view all the answers

How does word of mouth influence prospective customers?

<p>It can enhance confidence in using a service (D)</p> Signup and view all the answers

What does effort variability impact in a service context?

<p>Service quality and cost (A)</p> Signup and view all the answers

Which of the following best describes 'consistency in personal manner' in services?

<p>Providing a reliable and trustworthy interaction style (C)</p> Signup and view all the answers

What governs perceived quality in a service or product?

<p>The gap between customer expectations and perceptions (C)</p> Signup and view all the answers

What is described as the value of products ordered but still in transit?

<p>Pipeline inventory (B)</p> Signup and view all the answers

Which of the following is a significant challenge in supply chain management?

<p>Achieving seamless integration and coordination (D)</p> Signup and view all the answers

Which component is essential for a successful supply chain?

<p>Power and trust (D)</p> Signup and view all the answers

What does service supply chain management involve?

<p>Overseeing service performance and resources from suppliers to customers (B)</p> Signup and view all the answers

What characterizes a bi-directional supply chain?

<p>Customers provide inputs which are transformed into outputs by the service provider (C)</p> Signup and view all the answers

What is an effective strategy for addressing issues in supply chain processes?

<p>Continuous improvement and adoption of best practices (A)</p> Signup and view all the answers

What type of service does a production process requiring customer participation represent?

<p>Service operation (B)</p> Signup and view all the answers

What is the primary reason for the high failure rate of outsourcing relationships?

<p>Inadequate planning and expectation management (B)</p> Signup and view all the answers

Which of the following issues is NOT listed as a common problem in outsourcing?

<p>Insufficient technological integration (A)</p> Signup and view all the answers

What is the 'IKEA effect' related to in the context of labor?

<p>The satisfaction derived from one's labor (D)</p> Signup and view all the answers

How does service supply chains differ from traditional supply chains?

<p>Customers also act as suppliers in a bi-directional manner. (B)</p> Signup and view all the answers

What factor is highlighted as influential in the success or failure of an outsourcing relationship?

<p>The quality of internal communication (B)</p> Signup and view all the answers

Which of these statements reflects a misconception about outsourcing?

<p>Cost should be the only factor when outsourcing. (A)</p> Signup and view all the answers

What role does technology play in service encounters?

<p>It enhances the efficiency of service delivery. (D)</p> Signup and view all the answers

What can lead to greater satisfaction in labor output according to research on the 'IKEA effect'?

<p>Constructing and assembling one's own products (D)</p> Signup and view all the answers

What is considered a service qualifier in the context of customer expectations?

<p>Cleanliness of a fast-food restaurant (B)</p> Signup and view all the answers

Which of the following is a driver of globalization?

<p>Technological advancements (D)</p> Signup and view all the answers

Which option best describes a service loser?

<p>A late delivery of a package (D)</p> Signup and view all the answers

What is a major challenge of service internationalization?

<p>Cultural differences in service expectations (B)</p> Signup and view all the answers

How is 'capacity' defined in the context of service operations?

<p>The maximum production capability over time under normal conditions (A)</p> Signup and view all the answers

Which of the following options represents a service winner?

<p>Affordable pricing over competitors (D)</p> Signup and view all the answers

What aspect is critical for managing service capacity and demand effectively?

<p>Understanding customer preferences (C)</p> Signup and view all the answers

What is a key element to consider in selecting a global service strategy?

<p>Localizing service offerings based on culture (C)</p> Signup and view all the answers

Which of the following is NOT considered a part of the service profit chain?

<p>Stock market performance (B)</p> Signup and view all the answers

What is a significant factor affecting service delivery in remote regions?

<p>Utilization of advanced drones (B)</p> Signup and view all the answers

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Flashcards

Service Dominant Logic (SDL)

The idea that value is not created solely by companies, but is co-created through interactions between customers and companies' offerings.

Service vs Manufacturing: Uncertainty

Services are intangible and often involve direct interaction with the customer, leading to more variability and uncertainty compared to manufacturing processes.

Goods as Exchange Mechanisms for Service

Goods provide access to the skills and expertise of those who made them. Therefore, even buying a product is essentially a service transaction.

Front Office Activities

The direct interaction between customers and service providers.

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Back Office Activities

The behind-the-scenes operations that support the front office.

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Service Contextualization Matrix

A framework classifying service types using the degree of interaction/customization and labor intensity.

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Explicit Services

The tangible features of a service that customers can directly perceive, such as the quality of food or the attitude of a waiter.

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Implicit Services

The intangible or psychological benefits of a service that customers may only sense vaguely, such as the privacy of a loan office or the security of a well-lit parking lot.

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What is involved in layout decisions?

The process of arranging resources and tasks within a service operation to maximize efficiency and flow.

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Product Layout

A service layout where services are organized in a specific order, like an assembly line, for high-volume, standardized services.

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Cell Layout

A service layout designed to group related services together, like different departments in a hospital.

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Functional Layout

A service layout where similar functions are grouped together, like different sections in a library.

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Fixed-Position Layout

A service layout where the service provider comes to the customer, like a mobile mechanic or a house painter.

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Capacity in Services

The maximum level of activity an operation can handle under normal conditions within a defined period (e.g., how many meals a restaurant can serve per hour).

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Drivers of Globalization

Factors that drive a business to expand internationally (e.g., saturated local markets, reduced global trade barriers, and convergent consumer tastes).

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Mismatch between Capacity and Demand

The difference between the amount of service a business can provide and the actual demand for that service (e.g., a restaurant having empty tables during off-peak hours).

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Service Winner

Factors that influence a customer's decision to choose a specific service provider, like Price, Quality, or Guarantees.

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Service Qualifier

Aspects of a service that are considered basic and essential for any provider to be taken seriously (e.g., cleanliness for a restaurant or safety for an airline).

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Service Expansion Strategies

Strategies to expand a service operation into new markets, such as offering new services, targeting new customer segments, or expanding geographically.

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Service Profit Chain

The chain of activities connecting employee satisfaction, customer loyalty, and profitability (e.g., satisfied employees lead to excellent service, attracting loyal customers and higher profits).

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Service Loser

A factor that can negatively impact the success of a service (e.g., a mechanic failing to fix a car, rude customer service, or a delayed delivery).

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Personalization in Services

The process of customizing services to meet individual customer needs and preferences (e.g., tailoring a financial plan to a client's specific financial goals).

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Dependability in Services

The ability of a service to consistently deliver as promised, on time, and with good quality (e.g., a mechanic fixing a car correctly on the first try).

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Must Have (Basics)

Characteristics or features customers take for granted. They are essential for a basic level of satisfaction. For example, clean sheets and hot water in a hotel.

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More is Better (Performance)

Features that customers appreciate more of, leading to increased satisfaction as they are better met. For example, response time for room service in a hotel.

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Delighter

Features that go beyond expectations and delight customers in a positive way. For example, a complimentary bottle of wine upon arrival at a hotel.

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Reversal (Tontini)

Features that annoy customers, potentially undoing any positive elements of the service. For example, a malfunctioning TV in a hotel room.

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Service Guarantee

An effective method to signal service quality and ensure internal processes are refined. It's a way to guarantee customer satisfaction.

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Zero Defections

A strategy aimed at retaining every customer who is profitable to serve. It focuses on making each customer feel valued and ensuring their loyalty.

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Service Recovery

A positive approach to handling customer complaints, ultimately leading to increased satisfaction and loyalty. It aims to turn a negative experience into a positive one.

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Servqual

A questionnaire-based method used to measure customer perceptions of service quality. It evaluates the gap between expected and perceived service.

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Perceived Service Quality Gap

The difference between what a customer expects and their actual perception of a product or service. This gap determines the customer's perceived quality.

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Service Supply Chain

The interconnected network of suppliers, service providers, consumers, and supporting businesses involved in creating and delivering services. It encompasses the entire process from raw materials to the final service delivery.

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Service Supply Chain Management

The process of managing information, processes, resources, and service performance throughout the entire service supply chain, from the initial supplier to the end customer.

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Trust and Power in Service Supply Chains

The core of effective service supply chain operation. This includes mutual understanding, dependable collaboration, and a commitment to shared success between the various entities in the supply chain.

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Customer Participation in Service Creation

The fact that customers often play an active role in the service creation process, directly contributing to the final service output.

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Bi-directional Service Supply Chains

Services with a two-way flow of information and resources: Customers provide input, the service provider transforms it, and the output goes back to the customer.

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Outsourcing Failure

A situation where outsourcing fails to deliver expected results, often due to factors like cost-centric decision making, neglecting security considerations, inadequate planning, lack of communication, and poor transition management.

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IKEA Effect

A phenomenon where individuals develop a stronger liking for products or services they have actively contributed to, even if they are objectively of lower quality. This is similar to taking pride in a homemade cake.

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Service Encounter Technology

The integration of technology into service encounters, enabling customers to access and manage services independently. Examples include online banking, self-service checkouts, and automated customer support.

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Bi-Directional Service

Services where the customer is not just a recipient, but also actively contributes to the creation of value. This makes the interactions more complex and requires careful attention to both provider and customer perspectives.

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Service Provider Perspective

The process of delivering a service from the perspective of the service provider. This includes all the actions and resources involved in providing the service to the customer.

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Customer Experience

The subjective experience of a customer during their interaction with a service. This includes their feelings, thoughts, and overall satisfaction with the service.

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Service Capacity Fluctuations

The dynamic and fluctuating nature of service supply and demand, often leading to unpredictable variations in service capacity and output. This is similar to the 'bullwhip effect' in supply chains.

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Value Co-Creation

The collaborative creation of value between companies and customers. Companies provide resources and capabilities, while customers actively contribute their needs, preferences, and knowledge.

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Study Notes

Introduction to Service Operations

  • Products and services are seldom pure, instead they are often a spectrum, with some products/services reaching the definition of both.
  • Purchasing flour/pasta, buying a magazine, fixing a car, hiring DIY tools, tailoring a suit/dress, theatre, restaurant, booking a vacation, and a health check-up are examples of products or services that can range from fully product-driven to fully service-driven.

Definitions

  • Services: "Anything you can buy or sell but cannot be dropped on your foot" (Philip Kotler)
  • Services (Fitzsimmons): "A service is a time-perishable, intangible Experience performed for a Customer acting in the Role of a Coproducer' (co-creator) (James Fitzsimmons)
  • Service Firms: Service enterprises are organizations that facilitate the production and distribution of goods, support other firms in meeting their goals, and add value to our personal lives.

Examples and roles of service providers

  • Financial Services: Financing, Leasing, Insurance
  • Manufacturing Services: Finance, Accounting, Legal, R&D & Design
  • Business Services: Consulting, Auditing, Advertising
  • Infrastructure Services: Communications, Transportation, Utilities
  • Distribution Services: Wholesaling, Retailing, Repairing
  • Personal Services: Healthcare, Restaurants, Hotels
  • Consumer Services (self-service): Self-service
  • Government Services: Military, Education, Waste disposal, Judicial, Police & Fire Protection

Service Types

  • Public vs private, profit vs not for profit
  • Government: legal, educational, military
  • Private: airlines, restaurants, insurance, etc.

Service vs Manufacturing

  • Methods are similar, but manufacturing has additional challenges.
  • Impact of simultaneous production and consumption on quality (e.g., haircut)
  • Improving employee technical and customer interaction skills, as they often must do both
  • Slower productivity gains compared to manufacturing (only about 1% per year)

Service Characteristics

  • Intangible: Cannot be seen, felt, or experienced before purchase
  • Perishable: Cannot be stored for later sale (cannot be inventoried)
  • Inseparability: Cannot be separated from the provider; customers involved in delivery
  • Heterogeneity: Quality depends on the provider. How each customer experiences is different.

Service Dominant Logic (SDL)

  • Every economy is a service economy.
  • Value is co-created by the company and the customer interacting with value propositions.
  • Goods are viewed as exchange mechanisms for services.

Service Contextualization: The Process Matrix

  • Classifies service types using interaction, customization, and labor intensity.
  • Categorized as low/high regarding the degree of labor intensity and interaction/customization.
  • Examples: Service factories (Airlines, Trucking, Hotels) vs Service shops (Hospitals, Auto repair, Other repair services)
  • Examples: Mass service (Retailing, Wholesaling, Schools) vs Professional service (Doctors, Lawyers, Consultants, Accountants, Architects, Software development)

Service Package

  • Supporting Facility: The physical resources that must be in place before a service can be sold (e.g., golf course).
  • Explicit Services: Observable benefits; essential features (e.g., quality of a meal, waiter's attitude, departure time).
  • Implicit Services: Psychological benefits; not easily observed (e.g., privacy of a bank, safety of a parking lot).

Service-product Bundle

  • Core Goods: Tangible products (e.g., tailored suit)
  • Core Service: Intangible service (e.g., room in a hotel)
  • Peripheral Goods: Items supplementing the core service (e.g., coffee lounge, garment bag)
  • Peripheral Services: Deferred payment, and other added services (e.g., airport shuttle, travel agency)
  • Variations: customization aspects of a service (e.g., tailored suit)

Service Concept

  • The service concept is a shared understanding of the service provided and received.
  • It should include the organising idea (what?), service provided (how?), and service received (result?).

L2 Design and Development of Services

  • Develop new products/services for existing and new markets.
  • Improving quality, cost reduction, and meeting safety and ethical standards.
  • Standardisation (e.g. ISO standards) and ongoing quality improvement.
  • Product lifecycle consideration include intro-growth-mature-redesign or decline.

Service Delivery Process

  • Performance standards vary greatly depending on the service being provided.
  • Operational requirements much more complex than for physical goods due to variability, and the simultaneous production and consumption nature of service.

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