MAKERERE UNIVERSITY

MAKERERE UNIVERSITY BUSINESS SCHOOL

MASTER OF BUSINESS ADMINISTRATION

ACADEMIC YEAR 2021/2022

COURSE NAME: OPERATIONS MANAGEMENT

COURSE CODE: MBA 7302

YEAR OF STUDY: ONE

Designing of a productive system (service processes)
Introduction
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.
Literature review
Service process  refers to how a service is provided or delivered to a customer. Delivery
system is a creative process. Service process  begins with a service concept and strategy to
provide a service. In order to achieve these objectives various alternatives must be analyzed
and identified before a decision is made. Designing a service process involves issues   such
as location facility, design and layout for effective design   layout and workflow, procedure
and job definitions for service quality, equipment selection and adequate service capacity.
When designing service processes it is important that the first thing one does is to decide
where the service starts and finishes; a simple step, but one that many organizations fail to
make. It is also important to understand within the context of your service process where
and how the customer is engaged. By understanding how the customer interacts along the
process the organization can more clearly understand where along the process co-creation of
value can happen, and therefore, what key performance indicators to use, and where.
In general service processes can fall into one of two categories; front office and back office
processes (Johnson & Clark, 2008). The difference being that front office processes deal
directly with customers in a way that is visible to the customer. An example of this would
be processes designed to handle direct customer support through face-to-face, phone, email
or web interface. The customer plays an important role in the front office process often
providing vital information concerning the level, quality, and content of the service
required.
Examples of front office processes could be:

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 A telesales operator contacting or being contacted by a customer to discuss insurance
renewal, claims, or cover.
 A doctor taking a medical history from a patient admitted to hospital.
 A car salesperson helping a customer chose customized aspect of their new car.
The back office processes differ in that they are hidden from the customer. They also
require little or no additional input from the customer once the initial requirement has been
captured and processed. Examples of back office
processes include:
 Mortgage and loan application processing.
 Manufacturing processes.
 Demand planning and procurement of consumables for retail outlets.
Characteristics of service process
Divergence
Often, service providers adapt their services to match customer needs, as a single service
might not cater to all. The degree, to which a service provider can vary services, deviating
from the standard service, is known as divergence. Divergence provides an opportunity for
the service provider to customize services for his customers, and serve them better. For
example, many tourism companies customize their holiday packages according to customer
needs.
A standardized service with low divergence is designed for high volumes with a narrowly
defined and focused service. Since the tasks are routine it require a workforce with
relatively low levels of technical skills. For customized services more flexibility and
judgement are required to perform the service tasks. In addition to this more information is
exchanged between the customer and the social worker. In order to achieve customer
satisfaction, decision making is delegated to service workers.
Complexity
The process of creating and delivering a service involves many activities. While some
activities might be quite simple, others can be quite complex. The complexity of a process
should take into consideration the contribution of the different activities to service quality.
The activities that contribute to service quality in an interaction between a banker and a
customer may include the friendliness shown by the banker, his knowledge about the
products, the speed at which the service is offered to the customer, etc. At the same time,
the number of activities in the production and delivery of a service increase with the
increase in divergence, i.e., complexity increases with divergence. Complexity of services

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reflects the number of steps that are involved in delivering the services. By looking at the
blueprint it can easily determine whether the services are high or low in complexity and its
divergence can be determined by having a look at its blueprint.
Service location
The nature of the service being offered largely determines the service location. Services can
be delivered at the service provider’s location, at the customer’s location, at a neutral
location or virtually, depending on their nature. For example, customers can either visit a
hotel to have dinner or they can order home delivery.
In the former case, the service location is the hotel, and in the latter, the customer’s home is
the service location. A tourist operator offers his services at the tourist spot, which is a
neutral location. A banker offers his services virtually when he provides internet-banking
facilities to customers. Therefore, service location depends on the alternatives available to
the service provider and the customer.
The service delivery process should be located either at the service provider’s premises or
carried out at the customer place. In case of the services like painting carpet cleaning etc.
The service has to be delivered at home. Many services are being delivered without the
customer and the supplier meeting their destiny.
Customer participation and interaction
Service processes should be designed depending on the extent of interaction with the
customer and his participation in service production and delivery. The level of customer
interaction and participation differs from service-to-service. For example, the level of
interaction between a banker and a customer is negligible in mobile banking transactions
while the level of customer participation is high in deciding and ordering a menu for a
wedding. It can also differ from channel-to-channel for the same service. The perceived
quality of a service is enhanced if a customer has prior knowledge of the service process.
For example, a customer who has an idea about the check-in process at an airport will be
more comfortable and can appreciate the improvements made by the airline in the process,
when compared to a customer who has no knowledge of the check-in process.
In case of most service system the customer is present when the service is being performed.
The customer can be made a productive labour Instead of being a passive bystander.
Productivity can be increased by shifting some the service activities On to the customer. A
spectrum of service delivery system is possible depending on the degree of customer
involvement from self service to complete dependence on a service provider.
The service itself

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Services can be either process-based or technology-based. Process-based services involve
many activities that a customer has to go through before obtaining the service. For example,
a student aspiring to join an IIM (Indian Institute of Management) course or any other
business institution has to fill-up an application form, take the entrance test and appear for
an interview, group discussion, etc., before gaining admission. Process-based services
involve many people, with high levels of interaction between them. The service provider
has an opportunity to improve the quality of service at every step and in each interaction.
On the other hand, equipment or technology-based services require very little inter-personal
communication between a service provider and his customer.
For example, internet banking, offered by many banks has almost eliminated the need for
personal interaction between a service provider and his customer. Through technology-
based services are efficient and convenient for customers, service providers lose an
opportunity to enhance the quality of service through personal interaction. Further, any
problem in the teleological systems of the service provider affects the quality of service
production and delivery too. It is necessary to understand whether the service itself is
process dependent. Most of the equipment based services like laundry and lawn care as well
as services with highly intangible attributes like insurance and banking are process
dependent.
According to Silvestro (2015), there are three types of service processes and these include;
Line operations / Mass service
In a line operation there is an arranged sequence of operations or activities undertaken. The
service is produced by following this sequence. People  move through a sequence of stages
although there is no reason why customers should not remain stationary and receive a
sequence of services. The high degree of inter-relationship between different elements of a
line operation mean that performance overall is limited by performance at the weakest link
in the system and hold-ups can arise (e.g. a slow check-out operator in a self- service
cafeteria).
Also it tends to be a relatively inflexible type of process although tasks in the process can be
specialized and made routine giving more speedy performance. This process is most
suitable in service organizations with high volumes of fairly continuous demand for
relatively standard kinds of service.
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

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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.
Intermittent operations / professional services
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.

Process model

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Strategic issues
Over simplification
Many a times, the key points in the service process remains unnoticed or is overlooked in
the designing phase, which will be identified only when the customers on a later date when
they criticize about the process.
Incompleteness
Customers can provide a clear picture of the services with which they have direct contact
and are familiar to such service. Hence, the service designers will have to program the
functioning services in such a way that they can be altered without much difficulty to
accommodate the customers.
Subjectivity
People are influenced by their personal experiences and they can relate the same to services,
irrespective of whether they are connected to such experiences or not. For instance, if you
had a tough day at work, even your favorite food eaten the same day will not leave you
contented.
Biased interpretation
When the users of services describe the services to the others, a prejudice is formed and in
addition to that, it creates bias in the minds of the listeners with the use of words and their
interpretation of the use of the words. For example, the perspective of a person for the terms
“well-mannered and receptive” may be different from what another perceives it to be.
Competition

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Competition for service firms is both direct and indirect. Direct competitors include other
service businesses offering similar services and manufacturers who provide services that
support their products. A firm offering computer maintenance services, for example, faces
competition from other maintenance firms as well as the service divisions of computer
manufacturers. Service firms also face a form of indirect competition from customers who
provide services from their own internal resources. To persuade customers to outsource
their operations, service firms must demonstrate that their offering is both superior and cost
effective.
Recommendations
Value
Service value is the extent to which a service is perceived by its customer to meet his or her
needs or wants, measured by customer's willingness to pay for it. A service firm must
demonstrate value to customers and prospects. Services such as accountancy, computer
maintenance and insurance are essential to the efficient day-to-day operations of a business.
However, services such as marketing, training or consultancy are more peripheral. Service
firms have to demonstrate that those services can add value to the customer’s business.
Training, for example, can improve the productivity and performance of the workforce. A
firm may also need to show that marketing services can improve a company’s competitive
advantage. Or that consultancy can help a company improve its operations and profitability.
Service Development
Development costs for service firms are high compared to those of a product company.
Service firms cannot keep standard services in stock or take advantage of economies of
scale. They must create a new version of a service for each assignment, customized to the
needs of individual customers. To create a service, a representative discusses the customer’s
requirements, prepares a service specification for the customer’s approval and brings
together the elements needed to deliver the service.
Differentiation
Customers can only judge the quality of a service when they have used it. They cannot
inspect the service in the same way they can examine a product on a shelf. Service firms
must therefore find ways to differentiate themselves from competitors. Accreditation with a
recognized body is one way of demonstrating professionalism. Firms aim to build their
reputation by publishing authoritative articles or speaking at industry seminars.
Specialization can also create a point of difference. A firm offering training services, for

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example, can differentiate itself by focusing on tailored training for a specific sector, such
as financial services.
Allocation of resources based on need identified across processes:
Resources are generally allocated to business units based on an internally identified
business unit need. This can result in limited resources being applied to the wrong parts of
the organization. By having a process view of the business, resources can be allocated based
on a direct process need; which in turn can be linked to overall end-to-end process
performance.
Better identification of process duplication across organization:
In complex processes where there is no control of the overall process development,
efficiencies can be lost due to unnecessary duplication of process control steps. This can
slow down the process flow, tie up unnecessary resources, and reduce process flexibility in
meeting customers existing and new needs.
Developing more customer-centric business processes:
Where functional business units maintain ownership of their own parts of the process, these
processes may be developed in line with functional business needs, which in turn may be
out of sync with the overall needs of the organization and its customers. By developing an
end-to-end understanding of the core business processes the organization can best highlight
where the process deviates from delivering co-creation of value between business and
customer.
Employee motivation
For employees to identify improvements within their work environment they must be
motivated to do so. This may mean modifying reward and recognition programmes as well
as focusing on increasing levels of empowerment and responsibility amongst the workforce.
Relevance to operational practices in the organization
Customer feedback
Service processes can help to enhance the customer feedback programs to enable effective
measurement of satisfaction and loyalty. An organization leverages expertise and
experience to align customer feedback programs with industry standards and best practices,
thereby ensuring the collection of accurate and actionable data that leads to changes that
drive increased customer loyalty and satisfaction.
Customer onboarding and support
Through the service process, service teams are able to work closely with customers to
complete the bridge between sales operations and service operations.

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Key differentiator
Due to increasing homogeneity in product offerings, the attendant services provided are key
differentiators in the mind of consumers. Organizations can therefore leverage the service
offering to differentiate themselves from the competition and attract consumers.
Relationships
Relationships are a key factor when it comes to the marketing of services. Since the product
is intangible, a large part of the customers buying decision will depend on the degree to
which he trusts the seller. Hence, the need to listen to the needs of the customer and fulfil
them through the appropriate service offering and build a long lasting relationship which
would lead to repeat sales and positive word of mouth.
Customer retention
Since services are usually generated and consumed at the same time, they actually involve
the customer in service delivery process by taking into consideration his requirements and
feedback. Thus they offer greater scope for customization according to customer
requirements thus offering increased satisfaction leading to higher customer retention.
Multiple touch points
Services and there delivery involves many touch points for the consumer. Interactions with
multiple people and experiences that are less tangible than when buying an actual product
all impact the consumer’s perspective of the purchase process. These touch points work
together to establish a perception in the consumer’s mind.
Conclusion
A service process is a system through which a service is provided or delivered to a
consumer. This process involves a number of aspects for instance; the location, the
relationship with customer, their roles during service delivery among others. However,
services also differ according to the degree of contact and the nature of services to be
provided. A number of issues arise in the service process for instance, oversimplification,
incompleteness, biased interpretation among others.

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References
Silvestro, R. (2015). Service Processes. Wiley Encyclopedia of Management, 1 - 5.
Awara, N. F., & Anyadighibe, J. (2014). An Appraisal of Strategies and Challenges of
Services Marketing in a Globalized Business Environment. International Journal of
Management Studies and Research. Vol. 2, Issue 9.
Johnston, R & Clark, G (2008), Service Operations Management: improving service
delivery, Gosport: FT Prentice Hall.
Mclaughlin, S. (2010). Service Operations and Management. In book: Introduction to
Service Engineering.

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