Design and Management Service Processes: Keeping Customers for Life

Description

In recent times, the role of service has become a critical differentiator between companies that are merely ordinary and those that are truly exceptional. Companies can create and maintain a competitive advantage and can keep loyal customers returning for life by consistently delivering a level of service that delights customers. To do this, exceptional quality needs to be designed into the service when it is first created, and maintained through the life of the service.

This book, intended for managers in both manufacturing and service industries, shows you how to design customer delighting service by applying well known Total Quality Development (TQD) and Total Quality Management (TQM) principles. The book is a detailed, step-by-step guide that describes the state-of-the art tools and methods such as Quality Function Deployment, Functional Analysis, Experimental Design and Simulation that you need to create, implement, manage and improve the processes by which service is provided so that you can consistently exceed your customers' expectations and keep your firm competitive in your industry.

In this book, through numerous examples and a single, large-scale case study, you will learn how to determine customers' expectations for the service, how to develop design specifications based on a quantitative assessment of the impact of meeting these expectations on customer satisfaction, how to generate and evaluate different service design solutions based on these specifications to select the solutions that deliver the highest performance at the most reasonable cost, and how to monitor and continually improve your designed services. At every point, the book offers concrete and specific recommendations that can be immediately applied to your business for real improvements in service quality and customer satisfaction.

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Sample Content

Table of Contents

I. INTRODUCTION AND OVERVIEW.

Competing Through Service Quality - a Fictional Case Study. Competing Through Service Quality - Three Industry Examples. Relationship Between Products and Services. Creating High-Quality Service - Service Design and Delivery. Total Service Design. Conclusion.

Basic Concepts: Vacation Planning Example. The Service Design and Management Model. Overview of Model Stages. Organization of Chapters. Using This Book to Manage and Improve Existing Services. Introducing the "Service Edge" Restaurant. Conclusion.

II. DESIGN.

Introduction to Quality Function Deployment. Identifying Customer Needs - HOQ Room 1. Generating Design Characteristics - HOQ Rooms 2 and 3. Determining Importance of Attributes - HOQ Rooms 6 and 7. Conclusion.

Design Performance Standards. Measuring the Desired Performance Level. Customer and Technical Benchmarks - HOQ Rooms 4 and 5. The Performance/Satisfaction Function. Setting Design Performance Standards - HOQ Room 8. Estimating the Performance/Satisfaction Relationship. Experimental Designs with Attributes at Two Levels. Analyzing Profiles with Attributes at Three Levels. Conclusion.

Functional Analysis. Defining and Documenting Processes. Concept Generation. Evaluating and Selecting Concepts - Description of the Pugh Method. Using the Pugh Method to Evaluate Restaurant Concepts. Conclusion.

Partitioning the Design Concept - Detailed Design Activity 1. Generating Design Alternatives - Detailed Design Activity 2. Predicting Design Alternative Performance - Detailed Design Activity 3. Performance Functions - Detailed Design Activity 3. Specifying Variability Using Distributions - Detailed Design Activity 3. Properties of a Good Design. Conclusion.

Evaluating Design Alternatives - Detailed Design Activity 4. Introduction to Simulation Models. Service Edge Restaurant Simulation Models Inputs - Detailed Design Activity 5. Service Edge Simulation Model Structure - Detailed Design Activity 5. Service Edge Simulation Model Outputs - Detaileddesign Activity 5. Analyzing and Modifying Designs - Detailed Design Activity 6. Functional Design - Detailed Design Activity 7.

III. MANAGEMENT AND IMPROVEMENT.

Design Implementation Plan. Service Construction Plan. Testing Plan. Communications Plan. Rollout and Transition Plans. Service Management Plan. Conclusion.

Performance Monitoring and Stabilization Procedure. Service Performance Metrics. Collecting the Right Data for Service Management. Data Analysis and Reporting. Monitoring Service Performance - Service Edge Restaurant Example. Conclusion.

Effect of Market and Customer Changes on Satisfaction. Defining Customer Satisfaction - Disconfirmation Model. Expectations. Other Models of Satisfaction. Satisfaction and Value. Measuring Satisfaction. Conclusion.

Evaluating the Financial Impact of Customer Satisfaction - Step 1. Setting Strategic Improvement Targets - Step 2. Evaluating the Impact of Service Performance on Satisfaction - Step 3. Selecting Attributes for Improvement - Step 4. Specifying Improvements at the Process Level - Step 5 and Step 6. Developing an Optimal Process Improvement Strategy - Step 7. Conclusion.

Closing the Loop - Restarting the Design Cycle. Integrated Design of Service Features, Facilities, and Processes. Good-Bye.

Preface

This book introduces readers to the details of a methodology for the design and management of processes used for delivering and maintaining service to customers. The procedures developed by companies for renting a car, checking in at a hotel or an airport, using an automatic teller machine at a bank, and reporting and resolving a problem with a customer's telephone service are all examples of such processes.In recent years, several well-known practitioners in the field of engineering design such as the late Dr. Stuart Pugh and Dr. Don Clausing of MIT have written books about adopting a total approach to the design and development of products. The idea behind this approach is that product design does not merely consist of technology-specific engineering functions. An average customer who purchases and uses a product is less likely to care about the specific engineering method by which the product functions than about its ability to consistently and reliably satisfy the customer's performance expectations. This is not to say that the technical details of engineering design are not important. Clearly, the ability of a product to deliver consistent and reliable performance is correlated with the quality of the technology used in its design. However, an approach that only emphasizes the technical aspects of a design, without achieving a clear understanding of the customers' requirements for the product and the contexts in which it will be used, cannot be expected to deliver products that satisfy customers or are successful in the marketplace. A design methodology is therefore needed that integrates customer-focused, technology-independent methods such as Dr. Genichi Taguchi's quality engineering or Quality Function Deployment (QFD) with the traditional engineering design processes. Such a methodology is referred to as total design.

In summary, total design is a general approach that maintains a focus on the customer throughout the design process. It is intended to produce products or services whose primary objective is to satisfy, excite, or delight customers. This approach can be applied as successfully to the design of automobiles as to the development of processes for delivering telephone service to the customer. This book describes how the total design methodology can be applied to services.

In general, the design of a service involves three elements: the features to be offered by the service, the layout and decor of the facility where the service takes place, and the processes by which the service is delivered. All these elements may not be contained in every service. Many services (for example, package delivery or cleaning services) are not rendered in a designated facility. Some services (for example, an information hot line), may not contain a wide range of features. But every service consists of processes through which customers experience the service.

For any given service, the quality of the design of each of the above-mentioned elements influences the overall service quality experienced by a customer. While a new service is being developed, each element must therefore be carefully and systematically engineered, using the total design concept outlined above. In practice, however, this is not often the case. For many new services, features and facilities usually get planned, but the systematic design of processes tends to be ignored. The reason for this is that service features and facilities are tangible, material things, whose performance can be relatively easily defined in engineering terms. On the other hand, processes are less tangible, and their performance criteria are harder to define and measure. Many service managers therefore do not know how to approach the task of designing processes in a scientific manner. Processes are thrown together haphazardly with no information on how they are likely to perform or whether their performance meets the customers' needs. As a result, even good services that have the potential for being successful in the market are held back by ineffective or poorly designed delivery or customer-service processes. Since a customer's contact with the organization is through these processes, poor performance leads to unhappy and dissatisfied customers and lost business. In many cases, much time and resources are spent after the service is implemented to repair and improve the processes. This time is doubly costly because it not only requires the expenditure of resources to correct past mistakes, but also takes away from time that can be far more productively spent in forward-looking strategic improvements. These situations can clearly be avoided if the processes are correctly designed before the service is implemented. This book has been written to help the reader achieve this objective. The book is a detailed, step-by-step guide that shows the reader how to create, evaluate, and implement service processes that will consistently satisfy customers by performing at levels that consistently exceed customers' expectations. A conceptual framework called the "Service Design and Management Model" directs the reader through the steps of the methodology. This model is described in Chapter 2. This model can be used to effectively design all elements of a service. In this book, the design of processes is emphasized, for the reasons previously mentioned.

This book complements the many books on service quality that have recently appeared in the literature that illustrate how companies can use service quality as a difficult-to-copy strategic differentiator in the marketplace, and how an evaluation of the impact of service quality on the financial performance of the company can be used to plan and implement effective quality improvement initiatives. Many of these texts have a broad scope, and by using examples from different service industries, they describe the principles and philosophy of service quality management. This book has a narrower and more detailed focus and takes a practitioner or a student through the tools and methods required to transform these principles and philosophies to a successfully implemented service. A single case study is systematically developed through the chapters of the book to illustrate these tools and methods.

The fundamental principle on which this book is based is that a service process that delivers a level of performance that consistently surpasses customers' expectations must be systematically designed and methodically managed. The first part of the book deals with the design aspects. Chapters 3 and 4 describe the use of QFD and experimental design to develop design specifications that are based on a detailed quantitative assessment of what customers desire from the service and how a deviation in peformance from this desired level affects their satisfaction with the service. Once the specifications are determined, a design solution that meets these specifications can be constructed. Several design solutions are available for each set of specifications, and it is necessary to compare these solutions and select the one that consistently delivers the highest performance level at an acceptable cost. Methods for design evaluation and selection are covered in Chapters 5, 6, and 7. After a design has been selected, it needs to be implemented. Guidelines for implementation are described in Chapter 8.

The rest of the book describes the management and improvement of the implemented design. The design specifications are also the natural standards against which the peformance of an implemented design can be monitored. Methods for measuring and analyzing process performance relative to the design standards are presented in Chapter 9. Ultimately, however, the true test for a successful service is whether it continues to satisfy customers. A service that performs well when compared with the design standards may still not be satisfying customers if their expectations have changed. Measures of service performance must therefore be continuously tested against measures of customer satisfaction. Satisfaction and its measurement are covered in Chapter 10.

In order for the service to remain competitive over time, its performance must be continuously improved. Since quality improvements require significant investments of time and money, it is important to carefully select only those improvement opportunities that produce the best returns measured in financial terms. This requires the ability to quantify the relationship between service performance and customer purchasing behavior. Methods for doing this are presented in Chapter 11.As mentioned earlier, the methodology in this book is presented in the context of service processes, but the steps of the Service Design and Management Model can be used for the design and management of the service features and facilities as well. In addition, the model can also used to integrate the design of these elements. The overall quality of a service depends not only on the design quality of the individual service elements, but also on the interactions between these elements. For example, the variety of furniture provided in a hotel room (features) and the process used for cleaning this furniture (process) are both individually important contributors to the quality of hotel service. However, taken together, the two elements may fail to satisfy customers if the cleaning process for a particular type of furniture takes so long as to inconvenience guests. A comprehensive methodology for designing services should therefore simultaneously consider the design of features, facilities, and processes of the service, and should explicitly include the impact of the interaction between these elements on the overall design performance. We refer to such a methodology as integrated design (do not confuse this with the total design principles mentioned previously, which refer to a customer-focused approach to design). The details of an integrated approach to service design are beyond the scope of this book, but we show how the Service Design and Management Model framework can be used to address this problem in Chapter 12.

The book is intended for managers who market and operate services, quality professionals involved in service improvements, and for use in college-level courses on service management. Readers who need to create new processes that do not currently exist will benefit by following the chapters of this book sequentially. Readers who manage existing services may which to read only selected sections of the book. Since the book presents a collection of tools and methods, all the techniques may not be required for all problems. Appropriate sections for different applications are presented in Chapter 2. However, the general approach adopted in this book of designing processes from customer-developed specifications and managing the processes with a focus on customer satisfaction is a good framework for all readers to follow. By adopting this framework, it becomes possible to develop services that distinguish themselves in the market through their superior quality.

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