I. Stages of Operational Competitiveness the different levels of customer contact in the service firm II. Classification of the different strategies in different service operation
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The document outlines four stages of operational competitiveness in service firms, ranging from basic service availability to world-class service delivery that exceeds customer expectations. It also discusses different levels of customer contact in service operations, strategies at various organizational levels, and definitions of key operational concepts, such as technical core and production-line approach. Additionally, it addresses various positioning strategies, including volume-oriented and niche strategies, aimed at optimizing service delivery and market capture.
I. Stages of Operational Competitiveness the different levels of customer contact in the service firm II. Classification of the different strategies in different service operation
- 1. I. Stages of Operational Competitiveness Stage 1: Available for service Understand the potential business impact of a problem with your products. Make sure that services are available to provide an appropriate level of response to minimize impact on custome r’s business. Assess the needs addressed by current offerings to determine if an opportunity exists to provide extended service coverage, and if so at what price. Not all customers need, nor are willing to pay for extended service coverage. Stage 2: Journeyman After maintaining a sheltered existence in stage 1, a service firm may face competition and may be forced to re-evaluate its delivery system. Operation managers then must adopt industry practices to maintain parity with new competitors and avoid significant loss of market share. Stage 3: Distinctive competencies achieved Senior managers of firms in stage 3 have a vision of what creates value for the customer and they also understand the role that operations managers must play in delivering the service. Operations managers are the typical advocates of TQM in these firms and take the lead in instituting service guarantees, worker empowerment, and service enhancing technologies. Stage 4: World-class service delivery Not satisfied with just meeting customer expectations, world class firms expand on these expectations to levels that competitors find it difficult to meet. World class service firms define the quality standards by which others are judged. Sustaining superior performance throughout the delivery system is a major challenge. Duplicating the service at multiple sites, and in particular overseas, is the true test of a world class competitor. II. What are the different levels of customer contact in the service firm? Active and Passive Contact Most tasks performed in the process of providing services involve direct contact with the customer; other tasks may be performed away from the customer (i.e., in the back office). The level of customer contact required may range from low to high. Where contact is low, most of the tasks are performed in the back office, but where contact is high the customer is in direct contact with the service system through most of the service delivery process. Customer -
- 2. service system contact may be active, passive or both, based on the nature of the service. In this paper, active contact is defined as direct contact between the customer and the service provider which involves direct customer -service system interaction. Passive contact is defined as direct contact between the customer and the service system which does not involve customer-service system interaction. Typically, this form of contact requires the physical presence of the customer in the service system. However, passive contacts do not generally require the customization of the service product. Consequently, passive contact services are more amenable to standardization and automation. III. Classification of the different strategies in different service operation Strategy at the corporate level sets out the direction of the whole organization, acknowledging the key stakeholders the organization is seeking to satisfy. These stakeholders will be both internal and external. Such a strategy is a statement of how the organization wants to position itself in its economic, political, social environment. It details the types of business the corporation wants to be in and what parts of the world it wants to operate in. In large diversified companies the second level of strategy, business level strategy, is at the Strategic Business Unit (SBU) level. This strategy sets out the plan for how the business unit will deal with its customers, markets and competitors and also how this will contribute to the overall corporate strategy. Growth and profitability targets and return on investment are considered at this level. The third level of strategy is where the business functions, operations or finance or marketing, formulate their long-term plans which support the aims being pursued by the business strategy. Different business object ives would probably require different operations strategies in that they would demand a different set of priorities. Under the top-down model the role of the operations function is to implement business strategy formulated elsewhere. IV. Define the following: Technical Core – the place within an organization where its primary operations are conducted. Perfect-World Model – J.D Thompson’s mode l of organizations proposing that ope rations’ pe rfe ct e fficiency is possible only if inputs, outputs, and quality happen of a constant rate and remain known and certain.
- 3. Focused Theory – an operation that concentrates on performing or a particular task of the plants used for promoting experience and effectiveness through competition and concentration on one task necessary for success. Plant Within a plant – the strategy of breaking up large, unfocused plants into smaller units buffered from one another so that each can focus separately. Buffering – surrounding the technical core with input and output components to buffer environmental influences. Smoothing – Managing the environment to reduce fluctuations in supply and/or demand. Anticipating – mitigating the worst effects of supply and demand fluctuations by planning for them. Rationing – direct allocations of inputs and outputs when the demands placed on a system by the environment exceed the system ability to handle them. Decoupling – disassociating the technical core from the servuction system Production-line approach – the application of hand and soft technologies to a service operation in order to produce a standardized service product. Hard technologies – hardware that facilitates the production of standardized product. Soft technologies – rules, regulation, and procedures that facilitate the production of a standardized product. Blueprinting – the flowcharting of a service operations. Service cost per meal – the labor costs associated with providing a meat on a per-meal basis (total labor cost/ maximum output per hour) Process time – calculated by dividing the activity time by the number of locations at which the activity is performed. Activity time – the time required so perform one activity at one station. Stations – a location at which activity is performed. Maximum output per hour – the number of people that can be processed at each station in one hour.
- 4. Bottlenecks – point in the system at which consumers wait the longest periods of time. Fail points – points in the system at which the potential for malfunction is high and at which a failure would be visible to the customer and regarded as significant. One sided blueprint – An unbalance d blue print base d on management’s pe rce ption of how the sequence of events should occur. Convenient Scripts – employee/consumer scripts that are mutually agreeable and enhance the probability of customer satisfaction. Divergent scripts - employee/consumer scripts that mismatch and point to areas in which customer expectations are not being met. Two sider blueprint – a blueprint that takes into account both employee and customer perceptions of how the sequence of events actually occurs. Script norms – proposed scripts developed by grouping together events commonly mentioned by both employers and customers and then ordering those events in their sequence of occurrence. Complexity – a measure of the number and intricacy of the steps and sequences that constitute a process. Divergence – a measure of the degrees of freedom service personnel are allowed when providing a service. Volume-oriented positioning strategy – a positioning strategy that reduces divergence to create product uniformity and reduce costs. Niche positioning strategy – a positioning strategy that increases divergence in an operation to tailor the service experience to each customer. Specialization positioning strategy – a positioning strategy that reduces complexity by unbundling the different services offered. Unbundling – divesting an operation of different services and concentrating on providing only one or a few services in order to pursue specialization positioning strategy. Penetration strategy – A positioning strategy that increases complexity by adding more services and/or enhancing current services to capture more of a market.