SERVICE MANAGEMENT

Service Delivery System & Characteristics of

Service

Dr. Sonia G. Dela Cruz Reynan M. Guerrero MBA

Professor DBA Student (Reporter)
• Service
Service Design Definitions
• Something that is done to, or for, a customer
• Service delivery system
• The facilities, processes, and skills needed to provide a service
• Product bundle
• The combination of goods and services provided to a customer
Service Design
Begins with a choice of service strategy, which
determines the nature and focus of the service, and the
target market
• Key issues in service design
• Degree of variation in service requirements
• Degree of customer contact and involvement
Characteristics of Services
1. Services are acts, they are intangible but highly visible to
the customers
2. Most services contain a mix of tangible and intangible
attributes
3. Services have customer contact
4. Service performance can be affected by workers’ personal
factors
5. Services are created and delivered at the same time and
are not consumed but experienced, cannot be
inventoried.
Characteristics of Services
6. Services are idiosyncratic
7. Everyone is an expert on service
8. In service business quality of work is not quality of
service
9. Services have low barriers to entry
10. Services are perishable
11. Location is important for service
Characteristics of Services

12. Services are inseparable from delivery

13. Service requirements are variable
14. Services tend to be decentralized and dispersed
15. Services are consumed more often than products
16. Services can be easily emulated
17. Services often take the form of cycles of encounters involving
face-to-face, phone, Internet, electromechanical, and/or mail
interactions
Service Businesses
A service business is the management of
organizations whose primary business requires
interaction with the customer to produce the
service
• Facilities-based services: Where the customer
must go to the service facility
• Field-based services: Where the production and
consumption of the service takes place in the
customer’s environment
 Internal services are the
ones that are required to
Internal Services support the activities of
the larger organization.
Services including data
processing, accounting,
etc.

Internal Supplier
Internal
Customer
External
Customer

Internal Supplier
 Service Demand Variability
 Demand variability creates waiting lines and idle
service resources
 Service design perspectives:
Cost and efficiency perspective
Customer perspective
Attempts to achieve high efficiency may
depersonalize service and change customer’s
perception of quality
 Customer participation makes quality and demand
variability hard to manage
Service Delivery System
Components of service delivery system:
Facilities
Processes
Skills
Service Design
• Service design involves
• The physical resources needed
• The goods that are purchased or consumed by
the customer
• Explicit services
• Implicit services
Performance Priorities in Service Design
• Treatment of the customer
• Speed and convenience of service delivery
• Price
• Variety
• Quality of the tangible goods
• Unique skills that constitute the service offering
 Phases in Service Design
 Conceptualize
 Identify service package components
 Determine performance specifications
 Translate performance specifications into design specifications
 Translate design specifications into delivery specifications
Three Contrasting Service Designs
• The production line approach (ex. McDonald’s, Jolibee, Starbuks)

• The self-service approach (ex. automatic teller machines, cofee

vending machines)

• The personal attention approach (ex. Ritz-Carlton Hotel Company,

Camaya Beach Resorts)
The Service Design Process
Desired service
experience
Service Concept Service Package
Targeted
customer Physical Sensual Psychological
items benefits benefits

Performance Specifications

Customer Customer
requirements expectations

Design Specifications Service

Customer
Provider

Provider Cost and time

Activities Facility
skills estimates

Delivery Specifications

Schedule Deliverables Location

Service
 Service Systems
 Service systems range from those with little or no
customer contact to very high degree of customer
contact such as:
– Insulated technical core (software development)
– Production line (automatic car wash)
– Personalized service (hair cut, medical service)
– Consumer participation (diet program)
– Self service (supermarket)
 Service-System Design Matrix
Degree of customer/server contact
Buffered Permeable Reactive
High core (none) system (some) system (much) Low
Face-to-face
total
customization
Face-to-face
Sales loose specs Production
Face-to-face
Opportunity tight specs Efficiency
Phone
Internet & Contact
on-site
Mail contact technology

Low High
 Design for High-and-Low Contact Services
DESIGN DECISION HIGH-CONTACT SERVICE LOW-CONTACT SERVICE
Facility location Convenient to customer Near labor or
transportation

Facility layout Must look presentable, Designed for efficiency

accommodate customer
needs, and facilitate
interaction with customer
Quality control More variable since customer Measured against
is involved in process; established standards;
customer expectations and testing and rework possible
perceptions of quality may to correct defects
differ; customer present when
defects occur

Capacity Excess capacity required to Planned for average

handle peaks in demand demand
 Design for High-and-Low Contact Services
DESIGN DECISION HIGH-CONTACT SERVICE LOW-CONTACT SERVICE
Worker skills Must be able to interact well Technical skills
with customers and use
judgment in decision making
Scheduling Must accommodate customer Customer concerned only
schedule with completion date

Service process Mostly front-room activities; Mostly back-room

service may change during activities; planned and
delivery in response to executed with minimal
customer interference

Service package Varies with customer; includes Fixed, less extensive

environment as well as actual
service
 Service Blueprinting
 Service blueprinting
A method used in service design to describe
and analyze a proposed service
 A useful tool for conceptualizing a service
delivery system
Major Steps in Service Blueprinting
1. Establish boundaries
2. Identify sequence of customer interaction
3. Prepare a flowchart
4. Develop time estimates
5. Identify potential failure points
6. Determine which factors can influence
profitability
Service Blueprint
Example of Service Blueprinting
Standard Brush Apply Collect
execution time Buff
shoes polish payment
2 minutes
30 30 45 15
secs secs secs secs
Total acceptable
execution time
Wrong
5 minutes
color wax
Clean Fail
shoes point Materials
Seen by
(e.g., polish, cloth)
customer 45
secs

Line of Not seen by

visibility customer but Select and
necessary to purchase
performance supplies
 Blueprint for an Installment Lending Operation

Loan Branch Officer

application
30 min. – 1 hr. Pay book

W W
Line of visibility

Receive Final
payment payment
Notify
Decline customer
Issue
Confirm
Deny
check F
F
Verify Print
Credit Close
income Accept payment Delinquent
check account
data book

1 day 2 days 3 days

F
Initial
screening
Verify
payor

Confirm
F Credit Branch
Employer bureau records

Bank F
Accounting
accounts

Data base
records

F W
Fail point Customer wait Employee decision
Service Blueprint for a Luxury Hotel
 Service Fail-safing
Poka-Yokes (A Proactive Approach)
• Keeping a mistake
from becoming a
Task
service defect

• How can we fail-

safe the three Ts? Treatment Tangibles
 Characteristics of a Well-Designed
Service System
1. Each element of the service system is consistent
with the strategic and operating focus of the firm
2. It is user-friendly
FedEx
3. It is robust and easy to
sustain
4. It is structured so that consistent performance by
its people and systems is easily maintained
 Characteristics of a Well-Designed
Service System
5. It provides effective links between the back office and
the front office so that nothing falls between the cracks
6. It manages the evidence of service quality in such a
way that customers see the value of the service
provided
7. It is cost-effective
8. It ensures reliability and high quality
Challenges of Service Design
1. Variable requirements
2. Difficult to describe
3. High customer contact
4. Service – customer encounter
Guidelines for Successful Service
Design
1. Define the service package
2. Focus on customer’s perspective
3. Consider image of the service package
4. Recognize that designer’s perspective is different from the
customer’s perspecticve
5. Make sure that managers are involved
6. Define quality for tangible and intangibles
7. Make sure that recruitment, training and rewards are
consistent with service expectations
8. Establish procedures to handle exceptions
9. Establish systems to monitor service
Service Quality & Timeliness
Service Quality as something that “... is considered to be a global value
judgement in many ways similar to an attitude” (Hall and Elliot 1993)

“Service Quality is a measure of how well the service level delivered

matches customer expectation. Delivering quality service means
conforming to customer expectations on a consistent basis” (Lewis and
Booms 1983)

“... the consumers's judgement about an entity oveall excellence or

superiority” (Parasuraman et al 1988)
Service Quality & Timeliness
Perception (C) - Expectation (E) = Service Quality (Q)
This aticulate that service quality is the gap or difference between perceptions and
expectations

Customer compare their previous expectations with actual performance that is

delivered by service providers.
(According to Zeithami, Parasuraman and Berry 1990)

The perceived service quality indicates the discrepancy or gap between guests
expectations and service performance.

The level of satisfaction is varied by their expectation of services, consequently,

their expectation is very important component in the final assessment of quality
(Wuest, 2001)
Service Expectation Categories
1. Essential Services
2. Expected Services
3. Optional Services
Dimensions to be measure in the scale
are:
1. Reliability
2. Responsiveness
3. Assurance
4. Empathy
5. Tangibles
Definition of Timeliness
 Fullfilling needs at the right moment with the proper use of
resources.
3 Primary Components
 Fulfilling Needs (work is done correctly)
 At The Right Moment (service is provided at an appropriate time)
 With Proper Use of Resources (it will not impede the ability of th
eindividual or organization to meet its next deliverables)
Definition of Timeliness
 is defined as performing a requested service at a suitable or
opportune time.
 is the ability of service to perform its required functions and
provide its required responses within specified time limits.
 Timelinesd Speed and timeliness of service delivery.
 This includes the speed of the service and the ability of the service
provider to responds to a complaint.
Timeliness
 Fulfilling needs at the right moment with the proper
uses of resources
 Completing responsibilities punctuality and at the
correct pace
 Delivering on time so that others have adequate time to
meet their obligations
Web sites references:
https://en.wikipedia.org/wiki/Service_system
https://repository.up.ac.za/bitstream/handle/2263/27994/02chapter3.pdf?
sequence=3&isAllowed=y
https://www.lucidchart.com/blog/what-is-a-service-blueprint
https://en.wikipedia.org/wiki/Service_quality
http://www.poms.org/conferences/cso2007/talks/44.pdf