New Service Development Shin Ming Guo NKFUST Service Innovation - - PDF document

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New Service Development

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Service Innovation



Service Blueprinting



Service System Design Shin‐Ming Guo NKFUST

• I. Innovation in Services

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Idea Generation: Customers, Employees, Competitors, Technology Basic Research: Pursue a planned search for new knowledge regardless of possible application. (number theory) Applied Research: Apply existing knowledge to problems in creation of new service. (security coding) Development: Apply knowledge to problems to improve a current service. (on‐line shopping)

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Technology-Driven Service Innovations

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Source of Technology Service Example Service Industry Impact Power/energy Jet aircraft International flight is feasible Facility design Hotel atrium Enclosed sports stadium Feeling of grandeur/spaciousness Year‐around use Materials Photochromic glass Synthetic engine oil Energy conservation Fewer oil changes Methods Just‐in‐time (JIT) Six Sigma Reduce supply‐chain inventories Institutionalize quality effort Information e‐commerce Internet Increase market to world‐wide Video on demand

Process Innovation

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Change where the process occurs relative to where the customer is. Electronic commerce:

 Holds inventory in a warehouse far from customers and

ship the inventory to customers upon order

 Long tail effect: allows more variety – items with little

demand for a local store can be profitably carried in an

• rder fulfillment center

 Customers order from home but have to wait and

shipping costs must be incurred.

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Challenges for Service Innovation

6  Limited ability to protect

intellectual properties.

 Definition of the intangibles.  Incremental nature of

innovations.

 Limited ability to build

prototypes or conduct tests

• II. Service Design

 Customer

Participation

 Simultaneity  Perishability  Intangibility  Heterogeneity  Supporting Facility  Facilitating Goods  Information  Explicit Services  Implicit Services

location, interior design capacity planning, waiting line management service encounter revenue management service blueprint, service recovery

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Service Design Elements

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Design Elements Topics Structural

Delivery system Process structure, service blueprint, strategic positioning Facility design Servicescapes, architecture, process flows, layout Location Geographic demand, site selection, location strategy Capacity planning Strategic role, queuing models, planning criteria

Managerial

Information Technology, scalability, use of Internet Quality Measurement, design quality, recovery, tools, six‐sigma Service encounter Encounter triad, culture, supply relationships, outsourcing Managing capacity and demand Strategies, yield management, queue management

Strategic Positioning via Process Structure

10  Degree of Complexity: Measured by the number of steps

in the service blueprint, e.g., a clinic is less complex than a general hospital

 Degree of Divergence: Amount of discretion permitted

the server to customize the service, e.g., the activities of an attorney contrasted with those of a paralegal

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Structural Alternatives for a Restaurant

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Structural Alternatives for a Restaurant

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Service Process Matrix: Divergence

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Service Blueprinting: Complexity

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Failsafing (pokayokes)

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Service Encounter = moments of truth Every customer contact is an opportunity to satisfy the customer. To improve customers’ perception of service quality. Service failures are often caused by interruptions or negligence.

 Task to be done  Treatment accorded to the customer  Tangible features of the service

Generic Approaches to Service Design

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Production‐line

• Low Divergence
• Service Flow
• Cost and Consistent Quality

Customer as Co‐Producer

• Low Complexity, High Divergence
• Substitute Technology for People
• Cost and Convenience

Customer Contact

• High Complexity, High Divergence
• Service Encounter, Service Guarantee
• High Performance Quality, Dependability

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Service Design Example 1

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Production Line  Treat the service as a manufacturing process

 Focus on tangibles, not people  Standardization  uniform

quality

 Low contact  high efficiency  Technology  fool‐proofing

equipment and process

Service Design Example 2

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Customer as Co‐Producer  having customers taking a greater role enhances the service

 Self service  cost, speed,

convenience, customization

 247 service  availability  Appointments and reservations  Customers generated content

 Wiki, e‐markets

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Service Design Example 3

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Customer Contact  how to achieve efficiency with customer participation

 Separation of high and low contact

• perations

 Employee empowerment + Keep track

• f customers’ preferences



 total customization of service

 Sales opportunities via personal

relationship

Case Study: Car Sharing

Best suited to urban locations where there was a dense base

• f potential users, parking was

expensive, and the need to drive was limited. Big hole in the rental market: short‐term, on‐demand private car access.

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Building Service Platform

• Mobile technology enables

vehicle reservation and usage.

• Wireless transmission authorizes

users, read odometer, mileages, and time stamps.

Guidelines for Successful Service Design

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1. Define the service package in detail 2. Focus on customer’s perspective (expectation and perception) 3. Recognize that designer’s perspective is different from the customer’s perspective 4. Define quality for tangible and intangibles elements 5. Make sure that recruitment, training, and rewards are consistent with service expectations 6. Establish procedures to handle exceptions 7. Establish systems to monitor service

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Conclusion

• The process is the product.
• Service‐system matrix ≈ product‐process matrix
• Service blueprint ≈ process flow chart
• Inventory and scheduling are often not available to service
• perations.
• Expect and manage variability of service encounter
• Parts of the service packages are defined by the training

and treatment the workers receive.

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Homework 2

• Study the operation of zipcar and analyze the

service package and key design elements.

• Due 12:00 noon, 3/31
• smguo@nkfust.edu.tw