Front office/Back office Service Blueprint
Front Office/ Back office Service Blueprint; Queuing
Comparison with Production Processes
Production processes are organized as: Continuous Line Batch Job shop
The premise in production
Flow of materials Efficiency High utilization of resources Low wastages Avoiding customer contact
The premise in service
To provide experience to customer To generate customer satisfaction To increase customer contact
Production as a Closed System
In traditional Manufacturing system Production and marketing systems are separated. Customer is kept outside. It is a closed system Nuisance of customer presence is reduced The system can therefore work for high efficiency, productivity, capacity utilization Results in low cost
How do we compensate customer service?
Conformance to specifications Service stations Warranties Buffers for both internal and external customers Inventory controls
Service is an open System
In service, customer is integrated with production of service, as there is - Simultaneous consumption and production - -customer is a participant - High level of interaction with customer exists - Customer is an important input for transformation
Implications
No traditional concepts of closed system can be applicable. Efficiency suffers. Productivity goes down A service manager has to manage both production and customer Service requires customer contact and that is a great opportunity to business ( as in direct selling)
Front office, Back office
Back office: that does not require the presence of the customer Front office: that requires the presence of the customer There is a thin line emerging between the two The concept is based on the Customer contact Model: High contact and low contact elements should be separated
Decoupling
Work that does not require customer contact is decoupled from the front office jobs Means demarcation with separate job descriptions with different employees for back office It means removal of those employees from physical sites at back office that deal with customers
Reasons for decoupling
1. Efficiency: To improve efficiency when high customer contact jobs are taken away. Specialization, repeat operations, economies of scale improve efficiency Flow: To create buffer between low customer contact and high customer contact areas for a smooth flow. Worker Skills: A firm requires differing skills for low contact and high contact.PR and interpersonal attributes for high-contact and technical, analytical for low-contact. Quality: Consistent quality comes through specialized skills and increase of experience in backoffice
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Conflict between decoupling and Service Concept
1. Decoupling and Cost: Costs reduction is the basic result However, costs can increase because of increased Idleness of specialized employees. Staffing is based on peak requirements, which further increases idleness Estimates of workloads are difficult.
2. Decoupling and Quality Decoupling increases conformance quality, but dependability and accuracy suffers because of communication gap between front office and back office Involvement of employees to generate customer satisfaction suffers Non-standard customer requests do not receive attention
3. Decoupling and Delivery Decupling increases task speed (FW Taylor) but decreases process speed Decoupling depends on high contact workers to collect information and pass on to back office. Delivery depends on back office, but credit goes to the front office creating dissatisfaction of back office
4. Decoupling and Flexibility Flexibility suffers because tendency to standardize to reduce costs Decoupled employees are not in contact with customers, hence demand flexibility is unknown There is a communication failure. High contact accepts demand without knowing if back office can deliver or not.
Decoupling
Low SERVICE (flexibility, Qlty, delivery,speed,) Emphasis COST Emphasis High Service High Focused Professionals ( doctors, lawyers)
CheapCost leadership Convenience ( banks) (Kioskstrategy)
Linking Decoupling and Firm Strategy
High decoupling, Cost Emphasis: Cost Leader Pursue scale of economies Aggressive technological innovation to substitute labour High contact personnel share some back office functions to avoid idleness Service is broad based as perceived by customers. Hence commissions as incentives to high contact service employees does not work. Examples: Banks, Call centers, discount houses
Low Decoupling, Cost Emphasis,
Cheap Convenience Small service units, limited product lines, low cost and high customer convenience Employees require cross training in high contact units to fill in high idleness, Compensation on salaries for versatility of skills
High decoupling, Service emphasis:
High Professionals Primary aim is to support the Front office and provide customer service and not achieve low cost Tasks are segregated as personality and abilities of employees Employees are specialists and paid for task performance
Low decoupling, Service Emphasis:
High Service Personalized service at premium price Relationship orientation with customers Maximized flexibility and responsiveness Back offices are decoupled only where overwhelming advantages are provided by technology( scales of economy) High contact firms, a broad complex product line Knowledgeable workers, dedicated to customers
Manageme Cost nt Practice leader Decoupling level High
Cheap Conv. Low
Focused High Service Profess. High Low
Competitive Low cost Locational Experts Adv. convenien in back ce. office Reason for Scale of Cost Quality decoupling economy competitiv control eness Decoupled All back Limited Regional office back office back office
Personalized service Centralize if cost prohibitive Expensive capital goods
Managemen t Practice Strategic focus
Cost leader
Cheap Conv.
Focused Profess.
High Service
Min. cost Quality and min cost
Maintain Maximize Flex., service Flexibility . Service time
Productline
Training
Narrow
Very narrow Broad
Very Broad
Narrow
Very narrow Narrow but focus on entire process
Broad with specialization across all functions
Service Blueprinting (Lynn Shostack-1984)
Used to mapping the service process, identifying all the points where customer is in contact with the service provider, which in turn informs us points where things can go wrong Three important elements: 1. Line of visibility- seen by the customers 2. Line of internal interaction 3. Failure points-where things can go wrong
Service blueprint- 4 Key steps
1. Identify activities involved in delivering the service and present these in a diagrammatic form. The level of detail will depend on the complexity and nature of service 2. Identify the failure points. These are stages where things can go wrong. The actions necessary to correct these must be determined and systems and procedures developed to reduce the likelihood of them occurring in the first instance
3. Set standards against which the performance of the various steps might be measured. (Often this is the time taken) 4. Analyze the profitability of the service delivered, in terms of the number of customers served during a period of time.
