SERVICE MANAGEMENT

Service Management

Executive summary

A service operation is an open transformation process of converting inputs (consumers) to desired outputs (satisfied consumers) through the appropriate application of resources (family, material, labor, information, and the consumer as well). More simply, services are economic activities that produce time, place, form, or psychological utility. A meal in a fast food restaurant saves time. A meal with a date in an elegant restaurant with superior service provides a psychological boost. Wal-Mart attracts millions of customers because they can find department store merchandise, groceries, gasoline, auto service, dry cleaning, movie rental, hair styling, eyeglasses and optical services, and nursery items all in one place. Hospitality industry is one of the service businesses that pays so much attention to service quality as it is the main intangible product that it produces. This short article examines how to manage service quality in hospitality industry through managing the 'moment of truth' or service encounter. The analysis is done by referring to some problems and challenges in managing service encounters. The results of the analysis show some important points to consider when managing service encounters.



Executive summary2

Section one - Introduction4

Section two - Operating strategy7

Section three - Service blueprint9

Section four - The service delivery system10

Section five - Service employee management12

Section six - Quality management measures14

Section seven - Conclusion16

Bibliography18

Section one - Introduction

Service companies have been striving to attract and retain valued customers to improve their bottom lines by delivering services of high quality. Undoubtedly loyal customers can drive business success; however, companies need to realize that they cannot build a solid loyal customer base without having loyal employees (Durkin, 2005, pp. 45-51). In the service industry, frontline employees are organizational representatives that directly interact with customers and perform the role of "boundary spanning" (Beony, 2006, pp. 105). The attitudes and behaviors of frontline employees influence customer perceptions of service quality (Bowen & Schneider, 2005, pp. 136), which in turn influences customers on future purchase decisions.

The service sector represents the largest segment of most industrial economies. Hospitality and tourism are now the second largest of the service sectors. Operational excellence is critical for success in tourism and hospitality industries today, and its importance is increasing due to industry deregulation, global competition and rapidly evolving information technology. However, understanding service operations is not easy. Services are intangible, highly variable, not storable or transportable and often involve distributed operations with a significant amount of customer contact. This means that most service operations end up looking quite a bit different than manufacturing operations, and they often require specialized analysis frameworks and tools. The process orientation of service operations has developed beyond that found in manufacturing mainly because of customer participation in the service delivery process. In fact, customers are often considered co-producers because of their contribution to the value of the service offered. The concept of a “service profit chain” with high levels of consumer participation can be used to explain the links between elements of the service process, such as attention to internal service quality ...