Customers of service organization obtain benefits and satisfactions from the services themselves and from how those services are delivered. The way in which service systems operate is crucial. Service systems which operate efficiently and effectively can give marketing management considerable marketing leverage and promotional advantage. It is clear that a smooth running service operation offers competitive advantages, particularly where differentiation between service products may be minimal.
In service systems the marketing implications of operational performance are so important that the two functions have to co-operate. In services, marketing must be just as involved with the operational aspects of performance as operations managers; that is, with the ‘how’ and the ‘process’ of service delivery.
Classification of services operating systems
Services operating systems may be classified in a number of ways.
Two considered here for illustrative purposes are according to:
- The type of process
- The degree of contact
(1) The type of process
Three types of processes of relevance to service organization are:
(a) Line operations
(b) Job shop operations
(c) Intermittent operations
(a) Line Operations: In a line operation there is an arranged sequence of operations or activities undertaken. The service is produced by following this sequence. In manufacturing, an assembly line for domestic appliances typifies this type of process; in services, a self-service restaurant typifies this process.
(b) Job Shop Operations: A job shop operation produces a variety of services using different combinations and sequences of activities. The services can be tailored to meet varying customer needs and to provide a bespoke service. Restaurants and professional services are examples of job shop operations. While flexibility is a key advantage of this type of system it may suffer from being more difficult to schedule, from being more difficult to substitute capital for labour in the system and from being more difficult to calculate the capacity of the system.
(c) Intermittent Operations: Intermittent operations refer to service projects which are one off or only infrequently repeated. Examples include the construction of new service facilities, the design of an advertising campaign, and the installation of a large computer or the making of a major film. The scale of such projects makes their management a complex task. Such projects provide an appropriate field for the ready transfer of many project control and scheduling techniques like Critical Path Analysis. The scale and infrequency of these projects make them different in kind from line and job shop operations.
(2) The Degree of Contact
Managing service operations with a high level of customer contact with the service delivery process presents different challenges compared with those systems where there is a low level of customer contact. The amount of customer contact has an effect on may of the decisions operations managers have to make. These kinds of systems (high contact or low contact) have an effect upon service operations and have implications for managers of service systems.
Some of these are:
(a) High contact systems are more difficult to control since the customer can make an input to the process or even disrupt the process.
(b) In high contact systems the customer can affect the timing of demand and it is more difficult to balance the capacity of the system to meet demands placed upon it.
(c) Workers in high contact systems can have a great influence upon the customers’ view of the service provided.
(d) In high contact systems production scheduling is more difficult.
(e) It may be more difficult to rationalize high contact systems (e.g. by substituting technology).
(f) It may be beneficial to separate high contact and low contact elements of a service system and encourage staff specialization in these different functions because of the varying skills required.
Both of the schemes outlined are useful ways of classifying service systems for operational purposes. Both however imply that the sequence of operations involved in the service process can be made explicit to enable the systems to be categorized according to degree of contact. One step that service managers can take to understand their process of service delivery is to flow chart the system and the interactions with customers within that system.