QSM Reviewer Chapter 6-10 PDF

**CHAPTER 6** **DESIGNING AND MANAGING SERVICE** **CONCEPT OF SERVICE DESIGN** - **DESIGN** is a term often related to the **physical structure or model** of certain products that is aimed to **provide more value, better efficiency, or enhanced performance of the goods.** - The term...

**CHAPTER 6** **DESIGNING AND MANAGING SERVICE** **CONCEPT OF SERVICE DESIGN** - **DESIGN** is a term often related to the **physical structure or model** of certain products that is aimed to **provide more value, better efficiency, or enhanced performance of the goods.** - The term also applies to **services, procedures, management style, and processes** with the same purpose of providing value to clients and generating higher income for the organizations. **Design is used for various purposes in the different aspects of running a business organization:** - Creating standards in order to justify a premium price. - Introduce a new product in a highly competitive industry. - Discourage competitors. - Please the customers. - Streamline complex procedures. - Motivate employees and members of the organization. - Apply innovative ideas. - Improve efficiency. - Establish the competitive advantages. **SERVICE INNOVATION AND DESIGN** The uniqueness of the tourism and hospitality industry as a service-oriented industry has made the **delivery, description, and communication of its product difficult.** More so that the product is intangible and often co-created with the customer makes it **complex, very dynamic, and challenging.** **SERVICE DESIGN PRINCIPLES (highlighted points) H.C.U.S.E** 1. **HOLISTIC** - the organization should not forget the idea that the ***environment plays a big role or influence*** on how well services could be delivered. 2. **CO-CREATIVE** - those create service designs should also look and ***take into account the stakeholders*** who, in one way or another, may influence the design. 3. **USER-ORIENTED** - Service design is first and foremost ***created for the customers.*** Designs must focus on how customers expect how the products or services will be delivered. 4. **SEQUENCING** - Products and services most often are delivered from a ***combination of interrelated actions*** to come out with an output which is the product or service. 5. **EVIDENCING** - Unlike tangible products and goods which can be physically scrutinized, services should somehow ***create a visual expectation of the product.*** **TYPES OF SERVICE INNOVATIONS: (Highlighted points only)** 1. **Service Provision Innovation (SPI)** - New of improvements of existing services. *Ex. Passenger Transportation, Personalized Hotel, and Personal shopper with delivery.* 2. **Service Innovation Around Customer (SIAC)** - Customer's role is redefined or altered. *Ex. Digital Banking, Amazon's "Try Before You Buy", and Co-creation activities.* 3. **Innovation Through Solution (ITS)** - Traditional offering of products, but by offering activities translating to provision of solutions. *Ex. Facial Recognition, Energy-producing roads, and plastic blocks for infrastructure.* 4. **Service Innovation Through Interconnectivity (SITI)** - Ways that the equipment may communicate. Advancement of technology. *Ex. Robots and AI Chatbots* **BLUEPRINTING SERVICES** - **Blueprinting** is an illustration on ***how services are rendered.*** - It shows how a service design is ***implemented.*** - It is **a plan** that displays the interaction between departments, or elements and activities as a part of one entity. ***(highlighted points only)*** a. Prepare a diagrammatic format of all the elements and processes of the service design. b. Recognize possible decision points and conflict zones. c. Set standards in terms of allowable adjustments. d. Any photos, slides, or videos of the process can be very useful. e. Analyze the impact of the pieces of evidence, contact points, and interaction. **SELECTED METHODS AND TOOLS FOR SERVICE PROCESS (highlighted points)** 1. **AFFINITY DIAGRAM** - an ***ANALYTICAL TOOL*** to gather and organize infos from a significant amount of mixed data sourced. 2. **BRAINSTORMING** - method to ***GENERATE IDEAS FROM A GROUP OF PEOPLE**.* 3. **CHARACTER PROFILES** - supplement the understanding and appreciation of designers by ***PROVIDING PATTERNS OR TRENDS*** about service users. 4. **CONTEXTUAL INTERVIEWS** - refers to ***INTERVIEW CONDUCTED IN THE NATURAL ENVIRONMENT*** where the service occurs. 5. **USER JOURNEY MAP** - ***DIAGRAM THAT USES ILLUSTRATIONS, PHOTOGRAPHS, AND/OR QUOTES*** telling about the journey of the user through a service. 6. **CULTURAL PROBES** - referred to as a ***USER DIARY***. 7. **DOCUMENTARIES** - tool used to provide information at the ***INITIAL STAGES OF THE DESIGN PROCESS***. 8. **EMPHATY PROBES** - tool for design that ***CONSIDERS WHAT THE USERS ARE THINKING AND FEELING*** more that what they are ***DOING AND SAYING***. 9. **ETNOGRAPHIC USER RESEARCH** - tool used to ***SUPPORT A DEEPER UNDERSTANDING OF THE DESIGN ISSUES*** for service designers. 10. **EXPERIENCE PROTOTYPE** - ***SIMULATION OF SERVICE*** to test new service ideas or design for specific physical touchpoints. 11. **FOCUS GROUP** - setting of ***DELIBERATELY SELECTED PEOPLE*** who are participants of discussion about a particular topic. 12. **IMMERSION (WORKSHOP)** - also known as ***EMPHATIC RESEARCH OR ROLE-PLAYING***. 13. **OBSERVATION** - method that can be used to ***IDENTIFY PROBLEMS*** when users are interacting with a product. 14. **PERSONAS** - refer to ***FICTIONAL CHARACTERS*** created as ***ARCHETYPES***, not stereotypes. 15. **PROTOTYPING** - tool to used to ***EXAMINE THE BEHAVIOR AND PERFORMANCE*** of a fresh design ***BEFORE IT GOES TO PRODUCTION**.* a. b. c. d. e. f. 16. **SCENARIOS** - refer to the ***CREATION OF HYPOTHETICAL STORY TO VISUALIZE*** how user will utilize a service in order to generate design. 17. **SERVICE PROTOTYPE** - a simulation tool to ***TEST THE SERVICE DESIGN THROUGH OBSERVATION*** of the interaction between the user and the prototype. 18. **SHADOWING** - ***THE RESEARCHER ACTS AS AN OBSERVER*** only and does not interfere with the type participant in any circumstances. 19. **STAKEHOLDER MAP** - tool that ***SHOWS A VISUAL PRESENTATION OF AN ORGANIZATION'S*** staff, sponsor, investors, board, partner organizations, or customers. **SERVICE SETTING** \- defined as the **Physical Environment or background** in which service is rendered. **TYPES OF SERVICE SETTING** - **Self-Service** - customers of this organization perform most of the transactions and activities. - **Remote service organizations** - there are no customer involved in the service setting. **REDESIGNING SERVICE PROCESS, WHY? (highlighted points)** - The volume of exchanges in communication - Growing number of complaints - Exceptions are increasing - Proliferation of review and rechecking steps **ACTIONS BEING UNDERTAKEN BY SOME ORGANIZATIONS IN REDESIGNING THEIR SERVICE PROCESS ARE THE FF: (highlighted points)** a. **Review the existing service design** - review of the plan. b. **Removal of unnecessary step** - determining parts of the process that are not essential. c. **Eliminating the bottlenecks** - come up with suggestions to address the inefficiency. d. **Shifting from service design to self-service** - self-service as an alternative to keeping their service process. **CHAPTER 7** **BALANCING DEMAND AND PRODUCTIVE CAPACITY FOR QUALITY SERVICE** Service organizations must consider the diff. Factors that affect **demand and capacity**. Conditions that challenges Managers: - Excess in demand - Demand exceeds optimum capacity - Balanced demand and supply at optimum capacity **MANAGING DEMAND (highlighted points)** - **Predictable Cycles** - refer to the ***periodic increase and decrease of demand levels*** at specific time which may transpire at diff. Intervals. - **Random Demand Fluctuations** - ***There is no predictable cycle*** that could be derived. - **Demand Patterns by Market Segment** - analysis of the ***profile of an organization's customer***. **STRETCHING CAPACITY LEVELS** - Capacity Levels of some service org Employees and staff can be asked to perform at high intensity during peak times. [ *Although, because human factor, the efficiency of their performance will only be as good until they get tired*, which may result in poor service.] - The capacity of some facilities can be extended when there are used for longer periods. **STRATEGIES IN MODIFYING DEMAND TO MATCH EXISTING CAPACITY** a. Communicate with customers b. Modify timing and location of service delivery c. Offer incentives for off-peak usage d. Set priorities e. Charge full price **STRATEGIES IN ADJUSTING CAPACITY TO MEET DEMAND** - The objective of this secondary strategy is to ***adjust the capacity of a service organization in order to match supply and demand***. - **Shifting Capacity** involves expanding the organization's ability to meet customer needs during peak periods and minimizing capacity during downtime to minimize costs or wasting of resources. 1. **Increase Capacity Temporarily** a. b. c. d. e. 2. **Adjust Use of Resources** a. b. c. d. e. f. g. **PRODUCTIVE SERVICE CAPACITY E.F.I.L** \- resources or assets that organizations utilize to manufacture goods and to render services. a. **Equipment** - important element of capacity. It is a vital components in the delivery of services among organizations. b. **Facilities** - resources that pertain to handling of customers and provisions to store or process goods and services. c. **Infrastructure** - public and private structure essential to deliver quality service to customers. d. **Labor** - refers to human elements that manipulate the process and deliver the goods and services required by the customers. **YIELD MANAGEMENT** also knows as ***Revenue Management***. Organizations use this method to find *[the best combination among price, customer, and capacity used.]* Yield = [Actual Revenue] Potential Revenue Where: Actual Revenue = Actual Capacity Used x Average Actual Price Potential Revenue = Total Capacity x Maximum Price **RISKS:** - Loss of competitive focus - Customer alienation - Overbooking - Incompatible incentive & reward systems - Inappropriate org of yield management function **WAITING LINES AND QUEUING SYSTEMS** **Waiting** also known as **Queue**, happen whenever a system process a transaction is exceeded by the number of influx of dealings. **STRATEGIES TO DEAL WITH QUEUING ISSUES:** 1. Audit the Operational Process 2. Institute a Reservation Process 3. Differentiate Waiting Customers a. b. c. d. 4. Make waiting time more pleasurable \- reducing the waiting time of customer requires a multidimensional approach: \- Revalidating the queuing system design \- Fitting the queuing system acc to market segments \- Managing customers' behavior and their perceptions of the wait \- Installing a reservations system \- Redesigning service process to shorten transaction time **DIFF TYPES OF QUEUES** 1. Single-Line or Sequential Stages 2. Parallel Lines to Multiple Servers 3. Single Lines to Multiple Servers 4. Designated Lines 5. Take a Number 6. Waiting List (Party-size seating, VIP seating, Call-ahead seating, Large party reservation) **PSYCHOLOGY OF WAITING TIME** 1. Unoccupied time feels longer than occupied time. 2. Pre-process wait feels longer than in-process wait. 3. Anxiety makes wait seem longer. 4. Unexplained wait are longer that explained wait. 5. Unfair waits are longer than equitable wait. 6. The more valuable the service, the longer the customer will wait. 7. Solo wait fell longer than group wait. 8. Physically uncomfortable wait feel longer that comfortable wait. **CHAPTER 8** **CO-CREATION OF QUALITY SERVICE** **CUSTOMER'S ROLE IN VALUE CREATION** Value co-creation is defined as a ***collaboration between an organization and its customers*** to deliver or create the service that would be acceptable to the latter. The joint undertaking is expected to ***create new ideas, to improve products, and to be better services.*** **3 MAJOR ROLES BY CUSTOMERS IN SERVICE CO-CREATION AND DELIVERY:** 1. **Customers as Extended Employees** - Customers may contribute time, effort, and even resources. 2. **Customers as Proponents to Quality of Service** - The customer share in delivering their own satisfaction and value for services. 3. **Customers as Competitors** - if the customer realizes that they can perform the required service whether partially or entirely, then the service provider may not be needed at all. **SELF-SERVICE TECHNOLOGY (SST)** An innovation in providing service outputs created exclusively by customers without interaction or engagement with the employees of service organizations. Examples: - ATM of banks - Airline reservation & check-in - Airport reception & info kiosk - Food ordering & delivery - Hotel reservation, check-in and check-out - Electronic Blood Pressure Machine - Self-scanning at groceries - Internet Banking - Online shopping - Online Application **ADVANTAGES OF SST C.C.E.LC** 1. Convenience 2. Control 3. Less Cost 4. Efficiency **DISADVANTAGES OF SST** 1. Machine Failure/Breakdown 2. Poor Design/Not user-friendly 3. Limited Options **DETERMINE THE ROLE OF THE CUSTOMERS** - After the level of participation of customers has been determined, the organization may **[outline the tasks and roles of the customers]**. - The most common task performed by customers is to **provide information or resources formerly.** **Performed by employees** With the increase participation of customers, employees are eased out from tasks in service production. At some point, customers **perform tasks in the organization** not only for themselves, but also for the other customers. Customers also **perform promotional activities** for organizations. **FIND, INFORM AND REWARD THE RIGHT CUSTOMERS** - First, the organization must be able to **attract the right customers to fill the roles.** - Second, **customers need to be informed or educated** so that they perform their roles properly. - And finally, customers would perform tasks effectively and actively if they are **rewarded for their efforts**. **MANAGEMENT THE CUSTOMER SEGMENTS** - **Compatibility Management** is the process of managing the encounters or interaction and space requirements of several market segments to maintain customer satisfaction and avoid customer flight. - Another strategy is to **group together compatible market segments** to avoid conflict with each other. - Lastly, organizations may **deploy employees that are trained to observe customer interactions and anticipate potential conflicts**. These employees may take the role of **[catalysts to foster pleasant encounters among different types of customers]**. **CHAPTER 9** **SERVICE FAULIRES AND SERVICE RECOVERY** - **Service Failure** is service rendered not meeting the expectations or standards of a guest, leading to guest dissatisfaction. Not all customers would react or respond accordingly, making it difficult for a service staff to rectify or correct the acts done. - **Service Recovery** is an [organization's response to a failure committed to improving the guest experience]. This has a great impact on guest satisfaction, loyalty, word of mouth, and ultimately, performance. **TYPES OF SERVICE FAILURES:** 1. Failures on **service-products** 2. Failures on **customer request delivery** 3. Failures on **customer service** 4. Failures on **brought about by other organizational key players** A remedy to these failures may not be addressed as the guest expects, but an immediate positive request should always be the answer of the organization. **SERVICE RECOVERY STRATEGIES (highlighted points only)** 1. **Urge and Monitor Complaints** - the organization may use strategizing future plans for these situations. 2. **Learning from Solutions Made** - the management may check systematic problems that need fixing. 3. **Learning from Lost Opportunities which are Guests** - by studying what made a guest leave, the organization will irk us in knowing what have not we delivered. 4. **Introducing a Service Fail-Safe** - Do it right the first time. **CHAPTER 10** **SERVICE EXCELLENCE AND LEADERSHIP** **MEASURING SERVICE QUALITY** **Service Quality (SQ)** is one of the ***key factors and result-oriented strategies to satisfy customers and to convince them to become a loyal customers*** by [delivering quality-based products and services to reach their needs and desires]. **Types:** - Rated based on non-quantifiable process and are not easily observed. - Hard Standards. Hard measures include time required to process a customer in a queue, number of orders prepared and served, client waiting time before being entertained, and turnaround time of service vehicles. **OBJECTIVE OF CUSTOMER FEED BACK** - As cited by ***Misuraca, Scepi, and Spano (2019) from Sun and Shibo (2011) and Vidgen, Shaw, and Grant (2017) -* collecting and analyzing customer feedback is essential key to success since it allows organizations to learn continuously and adapt their offerings to customer preferences and needs.** - More organizations strive to be customer-driven to be relevant to clients' need and wants. 1. **Performance Appraisal Customer (PAC)**- a feedback is often studied in order to learn the performance of the org in *comparison to its previous accomplishments or in comparison to its competitors.* 2. **Customer-focused Organization (CFO)**- relies on feedback to *understand the needs and wants of the clients and to provide customer satisfaction.* 3. **Customer-driven Growth (CDG)**- Feedback would guide the org on *how to further improve the service and develop products that customers would want.* **UNDERSTANDING PRODUCTIVITY** - **Productivity** is basically the quantity of goods, products, and services production from the number of materials, resources, and assets used. - Meaning productivity in some areas of a service firm may be a challenge as compared to others. - As a final point, **productivity refers to the output based on a certain number of inputs**. **Efficiency** is a measure of ***how well things are done*** based on a given standard in a specific period. **Effectiveness** is the degree to which an ***org meets its objectives and desired outcomes.*** **STRATEGIES IN IMPROVING SERVICE PRODUCTIVITY** - **Utilizing technology, innovations, and data analytic** that would help employees to work faster and provide a higher quality of service. - **Training, equipping, and motivating** employees to be more efficient and productive. - **Deploying workers who are capable of multitasking** to eliminate bottlenecks and downtime by deploying workers wherever they are needed most. - **Maintain a lean and mean workforce**. - Operating customer-operated **self-service technologies (SSTs)**. - **Redesigning customer service processes** to be more productive and effective. - **Controlling and minimizing costs** at different levels of the service process. - **Outsourcing some nonessential tasks** that can be done by third parties more efficiently and cost-effective. **SERVICE QIALITY AND PRODUCTIVITY** 1. **Total Quality Management (TQM)** - assists org related to service excellence, productivity, and innovative process improvements. 2. **International Organization for Standardization (ISO)** - deals with assessment and certification of an org's quality management system. 3. **Six Sigma** - deals with orgs that have high-volume processes which aim to reduce defects and cycle times and to improve productivity. 4. **The Malcolm Baldrige National Quality Award (MBNQA)** - developed with the goal of promoting best practices in quality management and recognizing and publicizing quality achievements. **SERVICE LEADERSHIP** - In an industry that is globally competitive, organizations should be concerned not only of their individual status, but also of their status as compared to their competitors. - Service firms should be excellent in most areas of its operation to achieve an advantage over the others. **CLASSIFICATION** 1. **Fourth Class Firms - Subservient Firms** - exists under minimum compliance of the required criteria to conduct business. 2. **Third Class Firms - Traditional Firms** - adhere to the standardized form of operating a firm. They believe that productivity is related to keeping costs below the allocated budget. 3. **Secondary Class Firms - Maven Firms** - These firms recognize the ***customer's role, having a balance between productivity and service quality, continuous innovation and improvement, techniques that measure customer satisfaction, and selective recruiting, continuous training, and constant motivation of its workforce.*** 4. **First Class Firms - Innovator Firms** - regarded for their innovativeness and excellence; ***seamless service, continuous innovation, improvement, experimentation, and consultation to provide the best services, collaborate with customers, and operate closely with technology leaders***. Most service-oriented organizations seek the highest class of service forms by continually improving and developing to achieve customer loyalty and satisfaction. To achieve this, **organizations must be able to utilize their resources efficiently and improve their functional areas consciously**.