ATM1103 Service Quality Management 2024/25 T1 Lecture 6 PDF

ATM1103 Service Quality Management [2024/25 T1] SERVICE QUALITY MANAGEMENT LECTURE 6 SERVICE CULTURE AND SERVICE SUPPLY NETWORKS  To be able to define what is meant by ‘organisational culture’ and specifically ‘service culture’, and why both are important...

ATM1103 Service Quality Management [2024/25 T1] SERVICE QUALITY MANAGEMENT LECTURE 6 SERVICE CULTURE AND SERVICE SUPPLY NETWORKS  To be able to define what is meant by ‘organisational culture’ and specifically ‘service culture’, and why both are important To be familiar with some of the better-known frameworks that attempt to identify different types of culture LEARNING To identify the steps in attempting to manage service culture OBJECTIVES To understand some elements of national culture To understand the difference between dyadic and triadic relationships To explain the concept of internal and external supply chains and networks To identify the decisions that describe how supply networks are structured To gain an appreciation of the main issues involved in the ongoing management of service supply networks INTRODUCTION TO SERVICE CULTURE FRAMING SERVICE OPERATIONS Introduction to service operations The world of service SERVICE PEOPLE Service strategy Customer relationships The service concept Service quality Designing customer experience People in the service operation THE OPERATIONS Service culture This PERSPECTIVE lecture PROCESS INPUTS OUTCOMES EXPERIENCE THE CUSTOMER PERSPECTIVE IMPROVING SERVICE OPERATIONS DELIVERING SERVICE This Service innovation Service supply networks Service improvement Designing the service process lecture Learning from problems Managing service performance Learning from other operations Service resources and capacity INTRODUCTION TO SERVICE CULTURE ▪ One of the most influential factors that differs between organisations is the prevailing culture of an organisation. ▪ Culture can be described as the collective programming of the mind, distinguishing the members of one group or category of people from others. ▪ Organisational culture deals with facets of the organisation such as values, visions, behavioural norms, language, routines, rituals, systems, symbols, beliefs and habits. ▪ Culture can also be conceptualised as the ‘less than obvious’ and invisible aspects of the service organisation that hold it together and make it work effectively. THE ICEBERG METAPHOR ▪ Edgar Schein's iceberg model (Schein, 1992) illustrates that some cultural aspects of an organisation are visible while some are hidden and difficult for outsiders or even new members of an organisation to interpret. The most impactful elements of an organisation’s culture is what is below the waterline. https://fourweekmba.com/scheins-model-of-organizational/ WHAT IS ORGANISATIONAL CULTURE? ▪ Organisational culture encompasses many elements such as: Practices Attitudes Behaviours Beliefs Values shared ▪ Organisational culture responds to: Signals given out by Reporting How decisions are Reward systems leaders responsibilities made ORGANISATIONAL CULTURE AND ORGANISATIONAL CLIMATE Organisational Culture vs Organisational Climate WHAT IS ‘CLIMATE’, AND HOW DOES IT RELATE TO ‘CULTURE’? Organisation Culture and Organisational Climate and Service Culture Service Climate ▪ ‘High-level’, abstract and ▪ Address the parts or more focused upon aspects of culture that overarching shared are more immediately values. evident to employees. ▪ A culture where an ▪ Employee perceptions of appreciation for good the practices, service exists, and where procedures, and giving good service to behaviours that get internal as well as rewarded, supported, and external customers is expected with regard to considered by everyone customer service and as a natural way of life customer service quality. and one of the most important values. ▪ Feeling or atmosphere in an organisation at a given ▪ Shared basic moment. assumptions that pervade an organisation. ORGANISATIONAL CULTURE AND ORGANISATIONAL CLIMATE Organisational culture Shared basic assumptions that pervade the organisation Abstract idea Difficult to Long-term, Difficult to Pervasive measure stable change Can be Can be Can change Influenced by Specific local sensed quickly events Feeling or atmosphere in the organisation at a given moment Organisational climate An organisation’s culture can affect how it reacts to events that can change its climate. But its culture, over time, may be changed by the accumulation of changes in climate. WHAT IS SERVICE CULTURE? ▪ Service culture is a subset of the generic issues discussed in both literature and practice on organisational culture. ▪ The basic assumptions and values that govern an organisation but is focused on the assumptions and values related to customer service. ▪ One that prioritises customer service in all goals, decisions and actions, and in all its operations processes. ▪ Shared perceptions in the service organisation. ▪ Shared values about what is acceptable. ▪ Shared beliefs about the rationale and roots of value sets, and all in relation to customer service ▪ Concerned with shared styles of working and relating to others. WHAT IS SERVICE CULTURE? ▪ An organisation with a high level of service culture is one in which customers (both external and internal) are central to the way the organisation does its business: An attention to customers and their needs infuses the whole organisation. All staff, both front-and back-office, are aware of the critical importance of customer service. WHY IS SERVICE CULTURE IMPORTANT? ▪ A strong service culture leads to: An understanding of, and an appreciation for excellent service. Giving excellent service to internal and external customers. A positive attribute for an organisation. A potential competitive advantage. SERVICE CULTURE'S IMPACT  Service culture influences: (A) How an (B) An operation’s organisation is seen effectiveness (C) The way staff feel (D) How an operation about their jobs learns and adapts (A) SERVICE CULTURE INFLUENCES HOW AN ORGANISATION IS SEEN ▪ Organisations put considerable effort into shaping their brand. ▪ Any brand is exposed to how customers are treated at each point in a customer’s experience. ▪ A clear and strong service culture: Shares what is seen as important at each stage of a customer’s experience. Helps to ensure consistency of message in customers’ perception about what the service stands for. Is a consistent message that helps to establish the brand (positively or negatively). The Lengths We Go To | Singapore Airlines EXAMPLE: UNITED AIRLINES “GOOD LEADS THE WAY” United Airlines [Good Leads the Way] (B) SERVICE CULTURE INFLUENCES AN OPERATION’S EFFECTIVENESS ▪ A service culture is: A reflection of an organisation’s core values. What resources it acquires (e.g. an organisation that believes in a strong positive service culture may spend more time and money on service-related training for their employees). The way business is conducted. How people interact as a team and treat each other. ▪ The degree to which a service culture is established will affect an operation’s vision and strategy. (C) SERVICE CULTURE INFLUENCES THE WAY STAFF FEEL ABOUT THEIR JOBS ▪ A service culture can transform staff into advocates (or critics) of the organisation.  One important issue to note is that many people want more than a wage and reasonable working conditions hence, a positive service culture can help attract and retain staff.  Organisations should aim to develop a service culture that is well-articulated, consistent, achievable and ethical.  Positive service cultures should also recognise and celebrate excellent work from individuals and teams and provide employees and a sense of accomplishment. (D) SERVICE CULTURE INFLUENCES HOW AN OPERATION LEARNS AND ADAPTS ▪ Organisations that learn and adapt to circumstances are more likely to survive and thrive in the long term. ▪ Learning requires the ability to compare what is happening inside and outside the organisation with what should be happening. ▪ A service culture involves thinking seriously about how service can be improved and implementing these improvements effectively. ▪ A strong service culture also listens and reacts to customer feedback (both positive and negative). EXAMPLE: NEW SIA ECONOMY CLASS MEAL SERVICEWARE SIA Eco-friendly Packaging Economy Class Meals on Short-haul Flights | Singapore Airlines ▪ In early 2024, SIA trialed new paper-based serviceware for their Economy (and Premium Economy) Class meals on selected flights. ▪ Due to adverse feedback from customers, SIA did not implement the new serviceware eventhough there were operational benefits (e.g. retains heat better, allows soupy and gravy-based dishes). EXAMPLE: NEW SIA ECONOMY CLASS MEAL PACKAGING Free unlimited Wi-Fi for KrisFlyer members | Interview with SIA CEO Goh Choon Phong DIFFERENCE BETWEEN EXCELLENT SERVICE AND SERVICE CULTURE What is the Difference Between Excellent Service and Service Culture? CULTURE FRAMEWORKS AND TYPOLOGIES ▪ To determine the kind of culture an organisation has, researchers have created frameworks and typologies that assess various aspects of the organization. ▪ Some of these frameworks and typologies include: The Deal and Kennedy Model Johnson and Scholes “The Cultural Web” The Competing Values Framework (CFV) by Cameron and Quinn (which can be used in the the Organisational Culture Assessment Instrument (OCAI)).  CULTURE FRAMEWORKS AND TYPOLOGIES The Deal and Kennedy Model ▪ An organisation’s culture is categorised (or defined) based on two aspects: a. The degree of risk in the work environment. b. The speed of feedback from customers. ▪ It is not unusual to have different cultures in different areas of the same organisation. ▪ Useful to explain reasons for a particular culture and highlight potential for cultural clashes. CULTURE FRAMEWORKS AND TYPOLOGIES Johnson and Scholes “The Cultural Web” ▪ The Cultural Web is a useful tool to describe the components of an organisation’s culture. ▪ The organisation’s paradigm (i.e. values and culture) encompasses and considers several assumptions about the organisation. Practical issues include: o Industry and the sector of the industry. o Markets o The nature of the service offering. Tangible issues include: o Attitude of employees o Customer perceptions JOHNSON AND SCHOLES “THE CULTURAL WEB” Organisational structures ▪ Explores the way that the organisation allocates responsibility for managing its resources and processes. ▪ Concerns the way that the organisation ‘works’, and how it presents itself to the outside world. Power structures ▪ Decision-making processes (i.e. how decisions are made). ▪ Conversations about power structures should explore the way that decisions are made, implemented or blocked. Control mechanisms ▪ Provide direction and understanding for the current performance of the service organisation. ▪ Financial targets and budgets, sales targets, KPI, etc. JOHNSON AND SCHOLES “THE CULTURAL WEB” Stories and myths ▪ An area where managers can have a positive impact on service culture is by creating new stories. ▪ Stories are an opportunity to recognise the contribution of individuals and teams, and to create exemplars of practice for the wider organisation (e.g. Zappos’ 11-hour call centre session). Symbols and role models ▪ Symbols are the physical evidence of whom or what is important in the culture (e.g. colour, design, logo). For example, JAL’s logo is a stylized crane in a red circle. In Japanese culture, the crane symbolises longevity, prosperity and good health. It also represents the airline’s ability to fly high and far. ▪ Role models are leaders from the present day or from the past who are perceived to have shaped the culture of the organisation (e.g. Lee Kuan Yew in Singapore history). Rituals and routines ▪ Describe the informal systems of the organisation. ▪ The systems will probably not appear in any procedures manual but are often a large and significant element of the organisation’s culture (e.g. after-dinner drinks in Japanese culture to help team members bond). CULTURE FRAMEWORKS AND TYPOLOGIES The Competing Values Framework (CFV) by Cameron and Quinn ▪ Divides organisational culture into four categories: The clan (collaborate) culture The adhocracy (create) culture The hierarchy (control) culture The market (compete) culture ▪ Helps to identify the dominant culture of an organisation. THE COMPETING VALUES FRAMEWORK (CVF) CLAN (COLLABORATE) Culture ▪ A ‘family’- type organisation (like an extended family). ▪ Friendly organisation held together by loyalty and commitment. ▪ Shared values and goals, cohesion, teamwork, a participative nature and a sense of ‘group identity’ permeate clan-type organisations. ADHOCRACY (CREATE) Culture ▪ The prevailing assumptions that inform behaviour in the adhocracy culture are: Innovation Risk-taking or risk-oriented Entrepreneurship Creativity THE COMPETING VALUES FRAMEWORK (CVF) HIERACHY (CONTROL) Culture ▪ Bureaucratic organisational form. ▪ Rules, subject focus, hierarchy, relative impersonality and accountability. ▪ Stability, predictability and efficiency. MARKET (COMPETE) Culture ▪ Goal-oriented and emphasise results and the completion of the work. ▪ Emphasis on success and winning, with the achievement of measurable goals. ▪ Aim to be market leaders. THE ORGANISATIONAL CULTURE ASSESSMENT INSTRUMENT (OCAI) ▪ The Organisational Culture Assessment Instrument (OCAI) was developed by Cameron and Quinn. ▪ It is a method that can be used to diagnose the dominant cultural elements of an organisation. ▪ The method provides guidance on how managers and staff can help create a profile of the current organisational culture and the desired future culture. THE ORGANISATIONAL CULTURE ASSESSMENT INSTRUMENT (OCAI) Competing Values Framework introduction the tool OCAI by Robert E Quinn and Kim S Cameron HOW DO NATIONAL CULTURES VARY? ▪ Professor Geert Hofstede conducted a comprehensive cross-cultural study of how the values displayed in the workplace are influenced by culture. ▪ Culture is described in the study as the collective programming of the mind, distinguishing the members of one group or category of people from others. ▪ The six dimensions to characterise national culture are: Individualism– Masculinity– Power distance collectivism femininity Uncertainty avoidance Long-term orientation Indulgence–restraint HOFSTEDE’S CULTURAL DIMENSIONS Power Distance Index ▪ A high-power distance rating would suggest that employees are relatively passive, have a liking for being directed and inhabit a culture that generally expects superiors to wield power. Individualism–Collectivism ▪ Some societies particularly value the achievements of individuals, while others see it as more important to encourage the performance of the whole team. ▪ Collectivism stresses the importance of the community, while individualism is focused on the rights and concerns of each person.1 ▪ Unity and selflessness or altruism are valued traits in collectivist cultures, independence and personal identity are promoted in individualistic cultures.1 Masculinity–Femininity ▪ Relates to supposed differences in decision-making style. ▪ ‘Masculine’ approach to decision making is fact-based and aggressive style, with an emphasis on the acquisition of money, material possessions and ambition. ▪ ‘Feminine’ decision making iinvolves a much greater degree of consultation, with analysis being more intuitive. 1https://www.verywellmind.com/what-are-collectivistic-cultures-2794962#:~:text=Collectivism%20stresses%20the%20importance%20of,are%20promoted%20in%20individualistic%20cultures. HOFSTEDE’S CULTURAL DIMENSIONS Uncertainty Avoidance Index ▪ Explores the way that a society copes with unpredictable and unstructured situations. ▪ Concerned with whether social norms, beliefs and behaviour are followed closely or not. ▪ Whether the culture encourages risk taking.. Long-term Orientation ▪ Concerned with the different emphasises national cultures place on the time horizons for business planning, objectives and performance. Low on long-term orientation prefer to maintain time-honoured customs and standards. High on long-term orientation are more likely to take a relatively realistic approach to change. Indulgence–Restraint ▪ Indulgence stands for a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun. ▪ Restraint demonstrate strong control over the impulses. HOFSTEDE’S CULTURAL DIMENSIONS ACROSS CULTURES Power Distance Index ▪ A high-power distance rating would suggest that employees are relatively passive, have a liking for being directed and inhabit a culture that generally expects superiors to wield power. Do you think Singaporeans exhibit a low, medium or high Power Distance Index? HOFSTEDE CULTURAL DIMENSIONS ACROSS CULTURES Individualism–Collectivism ▪ Some societies particularly value the achievements of individuals, while others see it as more important to encourage the performance of the whole team. ▪ Collectivism stresses the importance of the community, while individualism is focused on the rights and concerns of each person.1 ▪ Unity and selflessness or altruism are valued traits in collectivist cultures, independence and personal identity are promoted in individualistic cultures.1 Do you think Singaporeans exhibit a low, medium or high preference for Individualism versus Collectivism? 1https://www.verywellmind.com/what-are-collectivistic-cultures-2794962#:~:text=Collectivism%20stresses%20the%20importance%20of,are%20promoted%20in%20individualistic%20cultures. HOFSTEDE CULTURAL DIMENSIONS ACROSS CULTURES Long-term Orientation ▪ Concerned with the different emphasises national cultures place on the time horizons for business planning, objectives and performance. Low on long-term orientation prefer to maintain time-honoured customs and standards. High on long-term orientation are more likely to take a relatively realistic approach to change. Do you think Singaporeans exhibit a low, medium or high Long-term Orientation view? HOFSTEDE CULTURAL DIMENSIONS ACROSS CULTURES Uncertainty Avoidance Index Explores the way that a society copes with unpredictable and unstructured situations. Concerned with whether social norms, beliefs and behaviour are followed closely or not. Whether the culture encourages risk taking.. Do you think Singaporeans exhibit a low, medium or high Uncertainty Avoidance Index? CAN CULTURE BE MANAGED? ▪ Cultures are an identity, and they have a life of their own that emerges with time and experience, and as a result cannot be managed in the short-term. However, they can be managed and changed in the long-term. ▪ Organisational cultures are often based on the philosophy and values of the founder, which may continue for a sustained period of time. ▪ Culture change is a complex and difficult process: One that could potentially take a significant investment of time, money and energy, and where there is no guarantee of success.. Changing the surface elements of culture, such as symbols, stories and ceremonies, will effect a change at the deeper levels of norms, values and beliefs. CHALLENGES OF CULTURE MANAGEMENT AND CHANGE ▪ Investigating the challenges of culture change in the organisation is likely a central issue for leaders and managers. Ability: ▪ To what degree do people have the necessary skills required in the change initiative, and if they do not currently possess these skills, what is needed to equip them with these skills that would impact on time and resources? Willingness: ▪ To what degree are people willing to change and to put in the necessary time, effort and commitment that is necessary? ▪ There may be resistance or unwillingness to change. ▪ The four possibilities are: a. People are both able and willing to make the change. b. People are able though not willing to make the change. c. People are willing though not able to make the change. d. People are neither able nor willing to make the change. A STAGE MODEL FOR CHANGING CULTURE ▪ Cameron and Quinn’s recipe for culture change involves nine stages: 1. Reach consensus regarding the current organisational culture. 2. Reach consensus on the preferred future organisational culture. 3. Determine what the changes will and will not mean. 4. Identify stories illustrating the desired future culture. 5. Identify a strategic action agenda. 6. Identify immediate small wins. 7. Identify leadership implications. 8. Identify metrics, measures and milestones to maintain accountability. 9. Identify a communication strategy. SERVICE QUALITY MANAGEMENT SERVICE SUPPLY NETWORKS INTRODUCTION TO SERVICE SUPPLY NETWORKS ▪ Supply networks are an interconnection of entities, where ‘entities’ can be whole organisations, parts of an organisation, processes or individuals. ▪ A supply network is all the operations that are linked together to provide products and services through to end customers. The delivery of all services relies on exchanges of services, information and sometimes products between an organisation, its customers and suppliers. All operations are, directly or indirectly, part of a larger network of other operations. Supply network entities add value through the creation and transmission of products and/or services. Separate sequences of linkages through a network are called supply chains. DYADS AND TRIADS ▪ There are many organisations, all interacting in different ways to produce products and services. Dyads Triads ▪ Focus on the individual interaction between two ▪ Focus on the interaction between more than two specific operations in the network. operations in the network Dependable Availability of parts MRO supply of parts for servicing and against orders repair Supplier of Airline aircraft spare MRO Supplier of aircraft Airline customer parts spare parts Customer THE IDEA OF THE ‘BUSINESS ECOSYSTEM’ ▪ A ‘business ecosystem’ is: An economic community supported by a foundation of interacting organisations and individuals. Entities in the network producing goods and services of value to customers, who are themselves members of the ecosystem. Different players interacting with each other, complementing or contributing significant components of value for customers EXAMPLE: THE ECOSYSTEM REQUIRED WHEN GOING ON A HOLIDAY Can you identify all the the different organisations/parties that are involved when you go on a holiday that requires air travel? EXAMPLE: AVIATION ECOSYSTEM Unmanned Aircraft Systems https://antoine-rizk.com/2017/08/23/the-aviation-industry-should-get-ready-for-customer-experience-networks/ TANGIBLE AND INTANGIBLE SUPPLY ▪ Relationships within a service supply network that go from no tangible elements to one where the tangible elements are a very important part of the service. ▪ Many services have a tangible element as part of what they are offering. ▪ Customers may not distinguish between the intangible and tangible elements of service. ▪ Many service supply networks involve relationships between entities, some of which are largely tangible and others that are largely intangible. INTERNAL AND EXTERNAL SUPPLY NETWORK External Network Internal Network Independent actors They have a greater making decisions in their potential to be own (hopefully, long- coordinated towards a term) interests. shared goal. Example: Example: Wine suppliers, aircraft SIA purchasing manufacturers. department, and warehouse department. HOW IS ‘SERVICE’ SUPPLY DIFFERENT? Product-based supply networks Service-based supply networks has involves managing the physical an absence of physical flow of flow of goods, but there is no VS goods between entities (for most obviously equivalent common networks), with the corresponding factor in service supply networks. absence of accumulated inventory. SUPPLY NETWORKS – THE CUSTOMER’S PERSPECTIVE ▪ A customer (business, a consumer or a user of public services) will rarely be involved in only a single supply network: They will be the customer and/or user of multiple supply networks. Coordinate the activities to achieve the total service required Example A person wanting to buy a house will have to interact with several service supply networks. The real estate agent The sellers with their own lawyer (solicitor) The mortgage (house loan) provider. The buyer’s lawyer The household moving company The telecommunications company The utility companies HOW CAN SUPPLY NETWORKS BE CONFIGURED? ▪ Configuring’ the supply network is the shaping of the overall pattern or arrangement of the various entities. ▪ Several trends are reshaping networks in many industries including airlines: Outsourcing or in- Choosing suppliers Disintermediation Network complexity house supply? OUTSOURCING OR IN-HOUSE SUPPLY ▪ A fundamental decision for any type of organisation is what it wants to create itself (called in-house supply) and what it wants to buy-in from suppliers (called outsourcing). ▪ Outsourcing involves moving activities that were previously done in-house to a outsourced supplier. Usually applies to smaller sets of activities that have previously been performed in-house. ▪ Offshoring involves moving outsourced activities to a foreign location. Outsourcing or in- house supply? EXAMPLE: OUTSOURCING OF AIRCRAFT MANUFACTURING Outsourcing or in- house supply? https://www.airliners.net/forum/viewtopic.php?t=420109 EXAMPLE: BOEING AND SPIRIT AEROSYSTEMS Outsourcing or in- house supply? Boeing to acquire Spirit AeroSystems for $4.7 billion CHOOSING SUPPLIERS ▪ If no other organisation can supply a necessary service, then it will have to be performed in-house. ▪ If there is only one, the decision is one of how best to develop a productive relationship. ▪ If there are more than one supplier, organisations can choose their preferred supplier based on factors such as: Price Quality guarantees Reliability Flexibility Efficiency Experience Choosing suppliers Etc. CHOOSING SUPPLIERS ▪ Other criteria also become particularly important when choosing suppliers: Ease of doing business. Financial standing of the supplier. People management skills, including training and industrial relations record. Commercial awareness. Focus on continuous improvement activities. Shared ethical values. Choosing suppliers DISINTERMEDIATION ▪ Disintermediation is the act of bypassing intermediaries to sell products and/or services directly to the customer’s customer (generally the end customer) or supplier’s supplier. Disintermediation EXAMPLE: DISINTERMEDIATION IN OTHER INDUSTRIES Can you think of any other products or services that has been disintermediated? Disintermediation MANAGING THROUGH INTERMEDIARIES ▪ There are good reasons for using intermediaries however: Closeness to customers Many customers prefer to deal with an organisation that is physically close to them. This might be because they prefer to deal ‘face to face’, have not got access to electronic processes, or the nature of the service requires the presence of the service provider. Local knowledge The major supplier may have insufficient knowledge of local conditions and culture. In the development of global strategies, much emphasis is placed on ‘thinking globally, acting locally’. Poor service margins The volume of service revenue may be too small in some geographical regions for the provision of a dedicated service unit. Insufficient capacity A strategy adopted by many call centres is to have ‘subcontract’ capacity available through providers set up explicitly for this type of activity. Disintermediation MANAGING THROUGH INTERMEDIARIES ▪ Key issues to consider in managing intermediaries: Financial incentives The parent organisation may provide financial inducements, discounts or credit facilities to encourage the intermediary to favour its services ahead of its rivals’. Punishments The ultimate sanction for poor performance is for the parent organisation to with-draw its support. Providing expertise The parent organisation frequently has considerable resources in areas that are lacking in the intermediary. Training McDonald’s Hamburger University is occasionally a source of jokes, but there can be little doubt as to its value in creating a consistency of approach throughout the network of outlets, both company-owned and franchises. Information systems and technology Provision of process technology will assist in ensuring consistency of delivery. Disintermediation  NETWORK COMPLEXITY ▪ Network complexity is an issue for organisations to manage as more options (i.e. channels) to link customers with suppliers become available, so the complexity of the network increases. Single-channel Little overlap between different model channel Align each channel with specific Multi-channel model targeted customer segments Integrate different channels (stores and web ) and other Cross-channel model channels in order to enhance their cross-functionality Provide a seamless, all-inclusive customer experience by fully integrating all possible channels so Omni-channel model that customers can use whichever is the most convenient for them at Network whatever stage of the transaction. complexity MANAGING SUPPLY NETWORKS ON AN ONGOING BASIS ▪ Supply relationship are contractual relationships, defined by explicit and formal documents that specify legally binding obligations and roles, both for suppliers and customers. ▪ Contracting is well-defined description of what is and what is not acceptable within a relationship: A contract should be adequately specified in a way that specifies ‘up front’ measurable outcomes. A contract should include details of how it is to be adequately monitored. A contract should contain adequate safeguards indicating measures and penalties that enforce the contract. Example of a Contract Airline-Airport Use and Lease Agreement Between Hillsborough County Aviation Authority and Frontier Airlines, Inc. PARTNERSHIP RELATIONSHIPS ▪ A partnership relationship is a close working arrangement that typically consists of a working arrangement between organisations to oversee operations and share in financial profits/losses. ▪ There are various elements that govern the closeness of a partnership between organisations:  EXAMPLE: AIRLINE PARTNERS QANTAS Partners Emirates Partners Big Emirates & Qantas News THE BULLWHIP EFFECT ▪ Bullwhip effect is a small disturbance at one end of the chain that causes increasingly large disturbances as it works its way towards the end. This is mainly felt in product-based supply chains due to the following: Response Immediate Promotion Shortage Order batching delays response campaigns gaming Because it Because Because of Because Because takes time supply chain the special sales even the for supply managers economies promotional potential of chain are over- associated activities future managers to influenced by with order such as price shortages notice that immediate quantities, discounts may result in there is a demand and orders larger can distort the over- change in tend to than actually regular ordering of demand, and forget part of required are buying products. then react to the ordering placed, patterns, that change. decisions resulting in a which can they have surge in cause already demand at uneven and placed. some stage distorted followed by demand no demand information. after that. BULLWHIP EFFECT ON SERVICE ▪ The bullwhip effect can also impact service organisations. Increased pace, if Demand increases Staff providing the sustained over Created errors above what is service may respond eventually will need Re-qork creates anything longer than further overloading regarded as normal by increasing their a short period, could some kind of re- capacity. pace of work. lead to an increase work. of capacity. in errors. MEASURING PERFORMANCE – SERVICE-LEVEL AGREEMENTS (SLAS) ▪ Service-Level Agreements (SLAs) are: Forms of contracts agreed between a service supplier and the service purchaser or user. Often found in a business-to-business context (e.g. airline and ground handling agent). SLA Templates THREE KEY FEATURES OF AN SLA Service Specification Routinised Relationship Developmental Relationship ▪ Agreeing the key dimensions ▪ Providing a mechanism for ▪ Providing a mechanism for of performance, such as reporting performance against routine discussion of the response times, availability, standards at agreed intervals. measures and targets accuracy, etc. ▪ Setting out the procedures to ▪ To share ideas for all-round ▪ Agreeing how each dimension be invoked if a failure against improvements. will be measured. standard should occur. ▪ Setting mutually agreed targets for each dimension. ▪ Defining where the responsibility lies for the measurement of each dimension. THE ADVANTAGES AND DISADVANTAGES OF AN SLA Advantages Disadvantages Creates a closer working relationship Requires considerably input of time and effort by both parties than a traditional Better service between supplier and provider contract. Reduce risk for the supplier and the Have to be tailor-made for each service with purchaser or user each supplier in the supply chain which can be complex Create loyalty and reliability by focusing on the development of people and systems rather than focusing on systems of Need an investment of time and effort in the ‘punishment’. long term to secure the potential benefits. EXAMPLE: SLA - IATA LEVEL OF SERVICE CONCEPT FOR AIRPORTS SUMMARY ▪ What is organisational culture? Organisational culture is a broad term used to describe and explain the behaviours and attitudes of people in organisations. Organisational culture also attempts to explain the meanings that the people attach to their actions. Culture deals with facets of the organisation such as values, visions, behavioural norms, language, routines, rituals, systems, symbols, beliefs and habits. Culture explains the ‘less-than-obvious’ and sometimes invisible aspects of the organisation that will often make the performance of the organisation greater than the sum of its parts. Similarly, culture can offer reasons why organisations that are replete with potential sometimes fail to live up to that potential. One way of thinking about organisational culture is using the metaphor of an iceberg. Like an iceberg, the majority of a culture’s mass, and its ability to cause trouble, is under the surface. SUMMARY ▪ What is service culture? The generally accepted meaning of the term service culture is that it refers to assumptions, values, behavioural norms, routines and rituals, and so on, that are specifically related to customer service. An organisation with a high level of service culture is one in which customers (both external and internal) are central to the way the organisation does its business. Service culture also pays attention to styles of working and relating within service organisations. ▪ Why is service culture important? The net effect of the various components of culture acting together can have a significant impact on the performance of the service operation. There are many examples of organisations that seem to have the resources to deliver innovative and high-quality service efficiently and sustainably, yet do not. What is missing is service culture, and its role in underpinning service performance means that we need to take it seriously as a concept, even if we might argue about the detail of describing and evaluating it. More specifically, service culture influences how an organisation is seen by its customers, the operation’s effectiveness, the way staff feel about their jobs and how an operation learns and adapts. SUMMARY ▪ What frameworks can we use to describe and evaluate service culture? Over the last 50 years, many frameworks have been developed for explaining, evaluating and categorising culture. One of the earlier categorisation models that remains relevant today is the Deal and Kennedy framework. The framework is of particular relevance to service because of its explicit consideration of feedback from customers. A more complex framework, which requires a longer conversation about culture and what it might mean to change culture, is the Johnson and Scholes cultural web. Finally, the Competing Values Framework classifies the ‘components’ of culture in order to reach four dominant types. These are the clan (collaborate) culture, the adhocracy (create) culture, the hierarchy (control) culture and the market (compete) culture. Typologies can also be used to classify national cultures. The best-known work is that of Geert Hofstede, who identified six dimensions that can be used to characterise national culture. SUMMARY ▪ Can culture be managed? One of the seminal writers on culture, Edgar Schein, argued that culture could indeed be managed and changed, and provided frameworks for looking at aspects of culture where change interventions might prove fruitful in modifying culture overall. Schein was also careful to point out potential countervailing forces that would consciously or unconsciously resist change intervention. ▪ What processes or recipes can we use to change service culture? While the cultural web and Schein frameworks have the potential to be tools for culture change, perhaps the most refined and detailed culture change process is the Cameron and Quinn culture change methodology. Cameron and Quinn’s approach is relatively accessible, being workbook based, and is full of practical tools and techniques that managers can apply directly themselves, or with the support of expert facilitators. The tool is underpinned, in turn, by Cameron and Quinn’s OCAI tool, which even includes numerical scaling to attempt a degree of quantifying of culture elements SUMMARY ▪ How can service supply networks be described? A supply network is an arrangement of interrelated organisations, operations or processes, and the connections between them, that adds value through the creation and transmission of products and/or services. The separate sequences of link-ages through a network are called supply chains. Supply networks can be complex, but are usually best described as interrelated ‘triads’ of entities. The triadic relationship is particularly descriptive of many service relationships. The connections between service organisations can involve both tangible goods-based supply and intangible supply. They can also describe networks that are internal to an organisation as well as relationships between organisations externally. So, the scope of service supply network management covers examples that might involve largely tangible or intangible supply between entities that are internal or external. SUMMARY ▪ How can service supply networks be configured? By configuring the supply network, we mean shaping the overall pattern or arrangement of its various entities. A fundamental decision for any type of organisation is what it wants to do itself (called in-house supply) and what it wants to buy-in from suppliers (called outsourcing, also known as the ‘do-or-buy’ decision). It has become an important issue for most businesses, because a larger proportion of direct activities are now being bought from suppliers. When out-sourcing involves moving activities to a foreign location, it is known as offshoring. If suppliers are used, a choice must be made between alternative suppliers. It is a particularly important decision for services because the prevalence of triadic relationships means that the ‘supplier’ of service deals directly with the customer. Also of increasing importance is the issue of disintermediation. This involves companies within a network bypassing customers or suppliers to make contact directly with customers’ customers or suppliers’ suppliers. Whereas the idea of using intermediaries is the opposite: it means ‘middlemen’ taking responsibility for managing a section of the supply network, thus making managing the chain easier for the service provider or customer. As more options to link customers with suppliers become available, so the complexity of the network increases. An example is how retail networks have moved from single-channel networks to what have become known as omni-channel networks, as both markets and technologies have developed. SUMMARY ▪ How can service supply networks be managed on an ongoing basis? The nature of how supply networks are configured can lead to very messy and complex relationships, with multiple ‘flows’ of physical products, information, intangible service and perspectives on what is important. Running supply networks is just as complex. An initial decision is the type of relationship to pursue with suppliers and customers. These can be positioned on a spectrum, with strictly contractual relationships (explicit and formal) at one end, and ‘partnership’ relationships that rely less on formal contractual mechanisms at the other. However, contractual and partnership relationships are not mutually exclusive – usually they coexist. It is the balance between the two ‘ingredients’ that will define any relationship. In service relationships, the role of partnership is likely to dominate for many relationships. Another issue in ongoing supply network management is how to cope with supply dynamics, the most significant of which is the ‘bullwhip’ effect. This is when a small disturbance at one end of the chain within a network causes increasingly large disturbances as it works its way towards the other end of the chain. It is a well-known effect in goods-based chains and there is evidence that it also occurs in service chains. Service-level agreements are forms of contracts agreed between a service supplier and the service purchaser or user. The three activities involved in managing SLAs are: setting a service specification, dealing with routine issues and the development of the relationship. Many SLAs do not realise their potential benefits. QUESTIONS?  Do you have any questions related to career, studies and/or working life, that you would like to ask? https://www.menti.com/alky5u6wvbpt  ATM1103 Service Quality Management [2024/25 T1] SERVICE QUALITY MANAGEMENT LECTURE 7 DESIGNING THE SERVICE PROCESS Who makes burgers faster?  To be able to explain why service process design is important LEARNING To define the main types of service process OBJECTIVES To be able to explain how managers can ‘engineer’ service processes To understand how service processes can be repositioned To understand the impact of technology on service process design INTRODUCTION TO SERVICE OPERATIONS FRAMING SERVICE OPERATIONS Introduction to service operations The world of service Service strategy SERVICE PEOPLE The service concept Customer relationships Service quality Designing customer experience People in the service operation THE OPERATIONS Service culture PERSPECTIVE PROCESS INPUTS OUTCOMES EXPERIENCE THE CUSTOMER PERSPECTIVE IMPROVING SERVICE OPERATIONS DELIVERING SERVICE Service innovation Service supply networks Service improvement Designing the service process This Learning from problems Managing service performance lecture Learning from other operations Service resources and capacity INTRODUCTION TO DESIGNING THE SERVICE PROCESS ▪ Service processes are where the operations and customer perspectives meet. Involves designing their experience of the service provided. Focuses on how the operation can provide service efficiently. Has to be designed to be both efficient and deliver the right experience, as required by the service concept. Are the building blocks of all operations. Must be efficient and must achieve efficiency while being visible to the customers. WHAT IS SERVICE PROCESS DESIGN? ▪ Process design describes and prescribes the procedures to be followed and how staff will use or interact with other resources such as materials or equipment to deliver the service concept. Example: Agents in An Airline Call Centre ▪ Given clear guidance as to how to speak to the customer, what questions to ask and what performance standards are expected. ▪ Have access to screens on their computers to prompt them to ask questions or to help them answer routine enquiries. ▪ The information system will guide the agents through the customer data requirements to be filled in during or immediately after the call. WHAT IS SERVICE PROCESS DESIGN? ▪ Processes are ’linked’ to form an ‘internal process network’ through which material, or information, or people, are ‘processed’ to provide the service concept. ▪ Individual processes are linked together to form networks. Example: Agents in An Airline Call Centre ▪ In the reservation, the service is not simply that delivered by the agent but also involves booking processes, ticket issuing processes, ticket refund and so on. ▪ The interrelated chain of processes needs to be carefully designed, managed and controlled to deliver value to customers and to the organisation. RESOURCES AND PROCESSES ▪ The purpose of service operations management is to add value for all stakeholders by managing two vital ingredients of any business: Resources Processes ▪ The assets the operation ▪ How you do things? has such as labour, ▪ How you perform activities? computers, aircraft, machines, etc. ▪ Resources and processes: Are not physically separate; they are simply a way of thinking about what goes on in your operation. Impact on each other. They can be both mutually supportive and mutually limiting. SERVICE PROCESSES AND IHIP CHARACTERISTICS ▪ Service process can be designed in the same way as any processes used to manufacture products. Some implications of IHIP characteristics on designing service processes are shown below: WHY IS SERVICE PROCESS DESIGN IMPORTANT? ▪ The service process is important as its: An element of the service operation. The mechanism that delivers the service concept, creating the customer’s experience and delivering the service outcomes. The ‘glue’ that holds the center customers, staff, equipment and materials together. WHY IS SERVICE PROCESS DESIGN IMPORTANT? ▪ Poorly designed processes are more likely to go wrong or appear to get in the way of effectively performing a task. ▪ Broken or poorly designed processes can: Be frustrating and inefficient. Destroy the stability that should be the foundation of improvement. Represent a waste of time and effort that are paid for one way or another. WHAT ARE THE MAIN TYPES OF SERVICE PROCESS? Ways to distinguish between different types of processes (C) Degree of Customer (B) Service Variety (A) Service Volume Involvement The variety of different The degree to which the The volume of services that services that must be must be processed. process requires customer processed. involvement.  (A) SERVICE VOLUME ▪ One of the most common approaches to classifying processes is by the volume of services that they deliver. High-volume Low-volume Services Services ▪ Worth ▪ Face to face automating. service. ▪ Benefit from ▪ Require staff specialised with more staff roles. flexible skill ▪ Spread fixed set. costs over a ▪ More large number expensive in of customers. providing the service. What are some examples of high-volume and low-volume services for airlines? Does the type of airline matter? Does the class of travel matter? EXAMPLE: SERVICE VOLUME FOR PRIVATE JET VS FSC VS LCC A private jet service provides highly personalised and customisable air travel to individuals (and groups of individuals). It is critical for service staff to learn about the needs and wants of the customer and to provide service of the highest level. Private jet operators normally service very few passengers for each flight (some flights may only carry one passenger) hence the service volume is very low. A FSC prides itself on providing a wide range of services for its passengers. Staff at the First Class and Business Class check-in counter are prepared to spend time dealing with each customer’s request, and endeavour to answer every question. As a result, each transaction is quite lengthy and the airline employs extra staff to ensure that the highest levels of service are achieved at all times for passengers, who are paying premium prices. A LCC or ULCC provides basic, affordable transportation for travellers. In this case, processes are designed to carry out only the basic check-in as quickly as possible. Passengers are not encouraged to request extra services and the number of check-in stations is maintained at the minimum level to keep costs low. (B) SERVICE VARIETY ▪ Individual service operations have processes that each have to cope with different degrees of variety. ▪ The first step in designing and managing service processes is to understand the mix of what are sometimes called: Runners Repeaters Strangers ▪ Standard activities predominantly ▪ Processes that were designed to ▪ Non-standard activities, perhaps found in high-volume operations. handle relatively few standard associated with a one-off project ▪ Often relatively predictable, activities but actually deals with or activity. allowing the operations manager much greater variety. ▪ More difficult to forecast demand. to match resources to forecast ▪ Repeaters often absorb more ▪ The resources required to deal demand with reasonable accuracy. resource than an equivalent with demand may be less certain. ▪ Lend themselves to efficient runner because lower volumes ▪ They are least-well-defined in operations through tight process cannot justify process automation. terms of resource requirements. control or automation. ▪ May be created by default rather ▪ New service introduction may give than by design, when an rise to stranger activities. organisation significantly expands the range of services it offers. EXAMPLES: SERVICE VARIETY FOR DIFFERENT PROVIDERS AND SCENARIOS Source: Johnston, Robert, et al. Service Operations Management : Improving Service Delivery, Pearson Education, Limited, 2020. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/singaporetechsg/detail.action?docID=6378980. Created from singaporetechsg on 2022-10-18 08:54:59. COMBINING VOLUME AND VARIETY PROCESS COMBINING VOLUME AND VARIETY – CAPABILITY PROCESS Capability Processes (Low Volume and High Variety) ▪ Focused on providing a capability for their customers or users, rather than a ‘pre-prepared’ service. ▪ Do not have the clarity of service concept that characterises high-volume consumer services, but they have far more flexibility to change service outcomes, customer experience and service delivery processes. The service concept is based on the provision of a particular skill set or knowledge base. This capability frequently resides with specific individuals and may be lost to the organisation when the individual leaves. Fewer processes are documented in great detail. Less consistency in approach to tasks. Research and development is centred on the individual’s capability to deal with a wider range of customer requirements. Example: Private jet service Strangers and repeaters dominate activities, with few runners except in support functions. COMBINING VOLUME AND VARIETY – COMMODITY PROCESSES Commodity Processes (High Volume and Low Variety) ▪ Processes here are clearly defined, leaving little room for individual customisation. ▪ Many consumer services employ these types of processes, having benefits of consistency as well as economy. Maintaining consistency of service delivery to ensure that customer expectations are met across all encounters. Managing standard service in such a way that individual customers still feel that they are not just a number. Providing an appropriate level of service and managing resource productivity to tight targets. Providing focused training, often of a few days or weeks duration, for its customer-facing staff, as compared with several years’ Example: Boarding gate service professional training for key staff in capability operations. COMBINING VOLUME AND VARIETY – COMPLEXITY PROCESSES Complexity Processes (High Volume and High Variety) ▪ Mass customisation. ▪ Provide high volume services that are capable of great flexibility. Aim to providing maximum flexibility for as many customers as possible. ▪ Providing flexibility for large numbers of customers is invariably expensive, achieved by employing large numbers of highly skilled people and/or high-tech equipment. Service operations managers aim to ensure that the type of process is appropriate to deliver the service concept. As service concepts change and evolve, existing processes may become less appropriate for the task in hand. Example: An airline website is a high volume touchpoint. While the website has a pre-set layout and fields, it provides flexibility and allows passengers to customize their bookings. COMBINING VOLUME AND VARIETY – SIMPLICITY PROCESSES Simplicity (Low Volume and Low Variety) ▪ Develop ‘simple’ operations as start-up services, which then may grow in terms of volume or variety, ▪ Either resources are under-utilised or the organisation is unwilling at this stage to invest in process technology to decrease its unit costs. ▪ Suits a small niche airline that uses less technology and more manual labour with respect to their processes. EXAMPLE: COMBINING VOLUME AND VARIETY – SIMPLICITY PROCESSES – MANTA AIR https://mantaair.mv/ REPOSITIONING SERVICE PROCESSES ▪ Many service processes are under pressure to change. ▪ High-variety/low-volume capability operations dealing with ‘strangers’ may be under pressure to increase volumes and/or drive down the high costs of operating such Process Increasing process processes. variety definition ▪ Low-variety/high-volume commodity-type processes dealing primarily with ‘runners’ may be under pressure to become more flexible and customise their service for customers REPOSITIONING SERVICE PROCESSES – CAPABILITY TO COMMODITY Moving From Capability Towards Commodity ▪ It is a common objective for many organisations to expand and grow. ▪ There are several issues to be addressed such as: Customers may require greater levels of consistency across service transactions carried out by different providers across locations. Larger organisations tend to be extremely conscious of their image, which may entail setting stricter guidelines for their staff as to the scope and style of work carried out. The ‘capability’ of the organisation, previously reliant on the skills and knowledge of specific individuals, must be replicated through more specialised resources, tighter process management and specific training if the organisation’s growth is not to be limited by scarce resources. To sustain growth, it is likely that the organisation may have to develop more competitive sales and marketing activities. REPOSITIONING SERVICE PROCESSES – COMMODITY TO CAPABILITY Moving From Commodity Towards Capability ▪ To avoid the trap of becoming a commodity service competing on price alone, organisations may extend the range of services on offer by offering a degree of customisation for individual customers. ▪ It may be possible to design a service delivery process that delivers a wide range of commodity services without increasing the complexity of the operations task such as: Shifting the focus of the operation from managing back-office operations consistently and for maximum efficiency towards building front-office flexibility. Requiring customer-facing staff to give informed advice as to the best service for an individual customer. ‘Upskilling’ the front line through a combination of greater staff training and the provision of information systems that allow the service provider to act as an ‘expert’. Making processes more flexible, often allowing greater discretion on the part of the employee to make choices as to which service commodity will be most appropriate for the customer. (C) THE DEGREE OF CUSTOMER INVOLVEMENT ▪ Some service operations, and their processes, rely on a high degree of involvement from their customers. ▪ Customer contact means the extent to which customers have some type of interaction with a service operation’s processes. ▪ Customer involvement, however, is the extent to which the customer is an intrinsic part of the service delivery process, and thus can be thought of as a resource for the organisation. THE DEGREE OF CUSTOMER INVOLVEMENT ▪ Customer involvement leads to four Key Decision Area Matrix (KDAM) broad types of service process: Do-it-yourself Service Factory (DIY) Service Service Service Project Partnerships ▪ The matrix helps us understand where the prime value is added and therefore what should be the key focus of attention for operations managers. THE DEGREE OF CUSTOMER INVOLVEMENT – SERVICE FACTORY Service Factory ▪ A service factory is a high-volume, low-variety operation dealing in runners and occasionally repeaters, with low customer involvement. ▪ The key decision area for these services is in the back office, where the prime task is efficient and consistent high-volume operations. ▪ These operations will place as much of the value-adding activities as possible in the back office. ▪ Customers are ‘trained’ to fit into the service delivery system. Examples Standing in the correct queues, not making non-standard requests. THE DEGREE OF CUSTOMER INVOLVEMENT – DIY SERVICE Do-It-Yourself (DIY) Service ▪ DIY services are high-volume, low-variety processes, with runners and repeaters, but with high levels of customer involvement. ▪ Key decision area around the entire customer, front- office and back-office chain. ▪ Significant effort lies in the design work for the initial set-up of facilities and networks. Examples Self check-in process, DIY printing of boarding passes. THE DEGREE OF CUSTOMER Service Project INVOLVEMENT – SERVICE ▪ Service projects utilise processes that are predominantly repeaters and strangers, with limited customer involvement. PROJECT ▪ Service projects typically consists of three phases: 1. Frequently an intensive initial diagnosis/specification phase carried out with the customer by front-office employees. 2. Consists of research work carried out by staff in the back office without the presence of the customer. 3. Results are presented and discussed. ▪ The front-office employees: Have more skill and flexibility than in a service factory. Are able to demonstrate considerable technical and interpersonal skill. Must have considerable knowledge as to both capability and capacity of the combined front office/back office Often making commitments on behalf of the organisation based on their diagnosis of the customer’s requirements. Examples Market research into new Business Class seats, Testing of new inflight meals by frequent flyers. THE DEGREE OF CUSTOMER INVOLVEMENT – SERVICE PARTNERSHIPS Service Partnerships  Service partnerships involve highly customised service processes with high customer involvement, dealing in either strangers or repeaters.  The key decision area is around the customer/client– front-office partnership.  Customer and service provider are so directly linked, the effectiveness of this service is often a function of the personal chemistry between the individuals involved.  Organisation and partners are an integral part of the ongoing service process. Examples Banks providing loans to airlines, Aircraft leasing companies and airlines. CROWD MANAGEMENT ▪ Crowds are unavoidable occurrences in the everyday life of many services. Airlines and airports experience crowds forming frequently. What do you think are some reasons for crowds forming at airports? Crowd at Rajiv Gandhi Airport CROWD MANAGEMENT ▪ There are four stages in crowd management, three of which should be carried out prior to an event. CROWD MANAGEMENT Flow Prediction ▪ To predict flow patterns in any public space it is necessary to understand how people might behave given the specific environment, such as where doors and barriers to movement are located. ▪ It is also necessary to have a forecast of how many people might be in a crowd at any particular time. ▪ Combining information on the physical space and the number of people allows predictions to be made for various scenarios CROWD MANAGEMENT Performance Analysis ▪ Professional firms that specialise in crowd behaviour often use simulation models to do this. ▪ These models can be very sophisticated, with impressive visuals that help to understand the effects of different layouts and volumes; however, they do depend on the assumptions about individual behaviour that are built into the model. ▪ Safety is always an important objective but is particularly important for some occasions – such as mass events or political demonstrations. ▪ The efficient movement through an area is also a key objective. CROWD MANAGEMENT Planning ▪ Making sure that everyone who is likely to be involved in managing the event understands the assumptions and results. ▪ Ensuring that everyone understands their role. ▪ Putting plans into place for any unforeseen circumstances, such as bottlenecks leading to unexpected crowding, or even an emergency evacuation of the area. CROWD MANAGEMENT Real-time Management ▪ A classic control situation, and like any other control activity it relies on some key actions. ▪ Rely on the establishment of a clear chain of communications among all involved parties ▪ The state of the crowd must be monitored to be able to detect any significant deviation from what has been planned for. ▪ There must be a decision mechanism to decide when an intervention is necessary and what it should be. ▪ The effects of any intervention should be monitored to check that crowd behaviour has modified. EXAMPLE: VEOVO PASSENGER FLOW MANAGEMENT TECHNOLOGY Enabling Smarter Decisions From Drive-Way to Runway and Beyond with Passenger Flow Management CROWD MANAGEMENT DURING COVID-19 ▪ Passenger flows were designed to minimise queues and crowds as these create Covid-19 transmission risks and potential security vulnerabilities. ▪ The result of this reduced the efficiency, productivity and effectiveness of service processes. HOW CAN MANAGERS ‘ENGINEER’ SERVICE PROCESSES? Process Mapping  Process mapping is the charting of a service process in order to assist in the evaluation, design and development of new or existing processes.  The aim is to record all the activities and their relationships. The results of process mapping include: ▪ It allows a critical examination of each and every stage in a process. Examining whether the activity really adds value. ▪ It is an essential starting-point for process improvement. How can one improve something that is not fully understood? ▪ It is an ideal opportunity to bring together teams from different parts of an operation to share their perspectives on how things should be done. ▪ The exercise can, if properly managed, help to create a culture of process ownership and responsibility. ▪ It gives everyone an overview of a complete process, often for the first time. ▪ The output is a process map that is a ‘picture’ – easy to understand and difficult to misinterpret.  EXAMPLE: PROCESS MAP FOR AIRLINE PASSENGER https://online.visual-paradigm.com/diagrams/templates/flowchart/airplane-passenger-routine/ HOW CAN MANAGERS ‘ENGINEER’ SERVICE PROCESSES? – SERVICE BLUEPRINT ▪ A service blueprint is a diagram that shows the relationships between different service components (e.g. time, employees, customers, technology, processes, etc) that occurs at each step and touchpoint of the customer journey. ▪ This allows those parts of the process with high visibility to be designed so that they enhance the customer’s perception of the process. ▪ A Service Blueprint complements a Customer Journey Map (CJM) and can be considered part two of a CJM. KEY ELEMENTS OF A SERVICE BLUEPRINT Time – Estimated time required by customers to perform steps, choices, activities and interactions in the customer journey. Evidence – Touchpoints, items, places, etc. where the customer has an interaction. Customer Journey – Steps, choices, activities and interactions that the customer performs. Line of Interaction – Depicts the interaction between the customer and organisation. Frontstage – Actions by employees or technology that occurs directly in view of the customer. Line of Visibility – Separates the activities/technology/actions that are visible to the customer from those that are not visible. Backstage Actions – Steps and activities that occur behind the scenes (i.e. not in view of the customer) that support what is happening in the frontstage Line of Internal Interaction – Separates employees, technology, processes, activities, etc. that directly support interactions with customers and/or users and those that do not or indirectly supports the Frontstage and Backstage Actions. Support Processes – Internal steps, processes, interactions etc. that support employees in delivering the service. Arrows – Arrows indicate relationships and dependencies. A one-way arrow shows a linear and one-way exchange, while a two-way arrow shows a need for agreement between the elements and/or co-dependency. READ Nielsen Norman Group - Service Blueprints HOW CAN MANAGERS ‘ENGINEER’ SERVICE PROCESSES? ▪ Process mapping is essentially a descriptive activity, hence what is required to derive maximum benefit from a process map is to ask key questions that help turn it into an analytical tool. Some questions include: Does the process support the strategic intentions of the operation? ▪ If the operation is expected to provide, for example, high-quality and speedy service to customers, is the process designed in such a way that decisions are made speedily, that end-to-end process performance is minimal and that quality controls are in place at all points in the process? Does each activity provide added value? ▪ Which elements of the process do not add value? Can they be removed or redesigned? Is the process ‘in control’? ▪ For the key elements, or maybe every element in the process ▪ What measures and targets are in place to ensure that a particular element is performing as expected? ▪ Who is responsible for overseeing, controlling and improving that particular element? HOW CAN MANAGERS ‘ENGINEER’ SERVICE PROCESSES? Who ‘owns’ and has responsibility for the process? How many different individuals and/or departments are responsible for parts of the process? Who or which group of people, is responsible for the design, delivery and improvement of the whole process? Is the level of visibility appropriate? The process map can be used to identify those activities that involve and/or are visible to the customer, differentiating between back-office and front-office tasks. Should or could any of the activities or tasks be reallocated? Can any of the elements be moved to the back office and away from the customer, which might lead to greater efficiencies? Are there elements that could be made more visible to the customer, which might lead to a greater sense of involvement and ownership and quality? How efficient is the process? By adding times, distances and resources used, such as numbers of staff, to the various tasks in the process map, the efficiencies of the whole process and various parts of the process can be calculated, and bottlenecks identified and removed. How can the process be improved? What are the likely or main fail-points in the process? What procedures are in place to deal with these? Does everyone who is involved in the process under-stand their role in the whole process and the effect of their actions upon it? PROCESS DEMAND AND OPERATING CHARACTERISTICS – OUTPUT INTERVAL  An important calculation is to work out how many items or customers a process should be capable of handling.  This is indicated by the ‘output interval’ or ‘cycle time’ that the process is designed to achieve.  The ‘output interval’ of a process is the time between completed items or customers emerging from it.  EXAMPLE: PROCESS DEMAND AND OPERATING CHARACTERISTICS FOR AIRLINE CHECK-IN ▪ An international flight with 450 passengers and the time available to process these passengers for check-in is 3 hours. The ‘output interval’ required to check-in all 450 For check-in , the total work content of all the activities passengers within 3 hours. that make up this task is, on average, 4 minutes (i.e. it takes 4 minutes to check-in per passenger on average). 𝑇ℎ𝑒 𝑡𝑖𝑚𝑒 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑇ℎ𝑒 𝑡𝑖𝑚𝑒 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑇ℎ𝑒 ‘𝑜𝑢𝑡𝑝𝑢𝑡 𝑖𝑛𝑡𝑒𝑟𝑣𝑎𝑙’ 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑝𝑟𝑜𝑐𝑒𝑠𝑠 = = 𝑜𝑢𝑡𝑝𝑢𝑡 𝑖𝑛𝑡𝑒𝑟𝑣𝑎𝑙 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑎𝑥 𝑡𝑜 𝑏𝑒 𝑝𝑟𝑜𝑐𝑒𝑠𝑠𝑒𝑑 𝑇ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑎𝑥 𝑡𝑜 𝑏𝑒 𝑝𝑟𝑜𝑐𝑒𝑠𝑠𝑒𝑑 3 ℎ𝑜𝑢𝑟𝑠 𝑇ℎ𝑒 𝑤𝑜𝑟𝑘 𝑐𝑜𝑛𝑡𝑒𝑛𝑡 𝑜𝑓 𝑡ℎ𝑒 𝑝𝑟𝑜𝑐𝑒𝑠𝑠 𝑡𝑎𝑠𝑘 = 450 𝑝𝑎𝑥 = 0.006 hours The number of people in the process = 𝑇ℎ𝑒 𝑜𝑢𝑡𝑝𝑢𝑡 𝑖𝑛𝑡𝑒𝑟𝑣𝑎𝑙 = 0.36 minutes 4 𝑚𝑖𝑛𝑠 The number of people in the process = 0.36 𝑚𝑖𝑛𝑠 = 11.11 people ▪ The number of staff required to check-in 450 passengers within 3 hours is 12 people (rounded up from 11.11 people). PROCESS DEMAND AND OPERATING CHARACTERISTICS – PROCESS BOTTLENECKS ▪ A process bottleneck is an activity or stage in a process where congestion occurs because the workload placed is greater than the capacity to cope with it. ▪ Bottlenecks are the curse of processes because they hold up the flow in the process and limit its capability. ▪ It is almost impossible to achieve an absolutely perfect equal allocation of work, so some degree of imbalance will always occur. Example Check-in Customs Boarding Check-in to Boarding 12 persons allocated at check-in counter Average time = 4 minutes per Average time = 3 minutes per check-in passenger Average time = 30 seconds Able to handle 540 Able to handle 200 passengers per passenger passengers (10 x 60)/3 = 200 Able to handle passengers (12 x 180)/4 = 540 (4 x 45)/0.5 = 360 PROCESS DEMAND AND OPERATING CHARACTERISTICS – PROCESS BOTTLENECKS ▪ There are two ways of ‘unblocking’ a bottleneck: Improve the effective capacity of the bottleneck Reduce the loading on stage the bottleneck stage ▪ Putting more resources ▪ Increasing efficiency at into that stage. However, the bottleneck. this is not necessarily ▪ Improvement methods the best long-term and approaches (e.g. solution as it misses the reducing the steps opportunity to learn required for check-in, from why overloading is introducing technology happening. such as biometrics to speed up immigration checks. SERVICESCAPES AS PART OF PROCESS DESIGN ▪ Some aspects of a servicescape will have an obvious impact on staff performance, attitude, motivation and behaviours. Is the work environment warm enough? Too warm? Too cold? Sufficiently well-lit to see adequately? Not too noisy? Are the uniforms comfortable? ▪ Companies have devoted resources to designing the servicescape from their staff’s perspective. American Airlines employees say uniforms are making them sick THE ALLEN CURVE ▪ One aspect when looking at service process design (especially the layout of physical spaces) is the physical distance between staff as it impacts the the frequency (and potentially the quality) of communication. ▪ The Allen Curve is a communication theory that shows there is an exponential drop in frequency (and potentially quality) of communication between colleagues as the physical distance between them increases. Estimated that we are four times as likely to communicate regularly with a colleague sitting two metres away from us than with someone 20 metres away. Beyond 50 metres (e.g. separate floors) there is virtually no direct exchange of certain types of technical information. Office is no longer just a physical place; email, remote conferencing, messaging and collaboration tools mean that colleagues can communicate without ever seeing each other. However, even in today’s modern world, the Allen Curve is still relevant as studies show that greater face-to-face communication increases the potential for team success. TECHNOLOGY IN SERVICE PROCESS DESIGN  One cannot ignore the significant difference technology can play in service operations.  Many service processes have been transformed by new technology that have: The ability to The ability to move The ability to think The ability to see communicate or or manage people or reason or sense connect or objects TECHNOLOGY THAT THINK OR REASON ▪ The best-known class of technology that attempts to replicate (and even surpass) human thinking is artificial intelligence (AI). ▪ Speech recognition, learning, planning and problem solving and make algorithmic decision making with large data sets (often called ‘big data’). ▪ Big data consists of: Large volumes of both structured and unstructured data whose analysis can reveal hidden patterns, correlations and other insights. Looking for relevant or pertinent information in big data sets (i.e. data mining). TECHNOLOGY THAT SEE OR SENSE ▪ Some technologies exploit their ability to manipulate computer-generated or computer- augmented visual information. ▪ Facial recognition uses images to identify or verify one or more individuals using a stored database of faces, so that those people can be identified for (say) automatic charging for a service, or (more controversially) for security or advertising purposes. ▪ Condition sensor technologies (such as fitness monitors) are more intimate: they can sense and monitor a person’s physical state. TECHNOLOGIES THAT SEE OR SENSE Airport Outrage Over Body Scanner https://www.qantas.com/sg/en/travel-info/travel-advice/travel-security.html  TECHNOLOGIES THAT COMMUNICATE OR CONNECT ▪ A significant capability that is increasingly built into many process technologies is the ability to network, connect or communicate with other elements in an operations process (i.e. Internet of Things (IoT)). ▪ Allows dispersed groups of people to collaborate virtually, using shared information (in real time) and shared storage of information. ▪ Communication between physical objects has been made significantly more effective through the use of radio frequency identification (RFID) technologies that can automatically identify objects, collect data Bangalore Airport and Cisco’s IoT platform transforms aircraft turnaround time about them and communicate it into information systems. EXAMPLE: SATS AR GLASSES What are AR glasses doing on the Changi Airport tarmac? TECHNOLOGIES THAT MOVE/MANAGE PEOPLE OR OBJECTS ▪ Robots are extensively used for handling laborious tasks such as moving materials, cleaning, etc. ▪ Aerial drones, both guided and autonomous, are increasingly used in service applications for short-haul delivery as well as being tested for aerial inspections of aircraft and airports. Meet the robots of Jewel | The Straits Times Airbus Advanced drone inspection THE POTENTIAL BENEFITS OF SERVICE TECHNOLOGIES ▪ Is the technology cheaper? One of the main benefits of several new technologies is that they are less expensive than what they replace (often people). ▪ Is the technology better? Some technologies can perform tasks better than the humans they replace. ▪ Is the technology faster? The main benefit of some technologies is that they are capable of doing things more rapidly. ▪ Does the technology give a more reliable service? Some technology developments are capable of doing things with greater dependability (or perceived reliability). THE POTENTIAL BENEFITS OF SERVICE TECHNOLOGIES ▪ Does the technology give a more convenient service? ▪ Can it allow the service to be delivered where the customer wants it? ▪ Is the technology safer? Can it perform tasks that might otherwise harm people? ▪ Does the technology connect or communicate better with customers or other operations processes, or other technologies? The Internet of Things (IoT) exploits the potential of RFID technology and creates a world where physical objects are seamlessly integrated into an information network to become active participants in business processes. THE POTENTIAL BENEFITS OF SERVICE TECHNOLOGIES ▪ Does the technology allow for more customising and personalising of a service? Big data analysis systems, such as those used in frequent flyer programs, use technology to build-up a database of customer preferences. As a result, they are able to target promotions to particular customer groups. ▪ Does the technology contribute to sustainability, in that it has a positive environmental impact? For example, more fuel-efficient aircraft leads to less fuel being used and lower emissions of carbon dioxide and other chemicals. WHAT CAN SERVICE TECHNOLOGY DO, AND WHAT BENEFITS DOES IT GIVE? SUMMARY ▪ What is service process design? A ‘process’ is how you do things, it is simply a framework around which you can think about who should do what, and when. Processes are the building blocks of all operations. Service processes have to be designed to be both efficient and deliver the right experience, as required by the service concept. Excellent service – which satisfies the customer and meets the strategic intentions of the organisation – is