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APICS Operations Management Body of Knowledge Framework, Third Edition

4.3 Service processes

Services are defined in terms of interactions between the service provider and the customer. The level of service interactions ranges from face-to-face to written correspondence. Degrees of standardization can vary greatly among service processes. Some may be standardized to the point of automation, while others require considerable skill on the part of the provider to meet the customer's needs.

4.3.1 Classification of services

Services can be classified according to the level of customer contact with the technical core. The operating efficiency of a service is limited by the amount of customer contact. Production efficiency actually decreases with greater contact between the service provider and the customer, due to the higher level of customization.

High contact. In high-contact (or pure) service, a greater level of contact exists between service providers and customers. Examples include health centers, hotels, public transportation, retail establishments, and schools. This limits the amount of activities the service provider can perform and tends toward a greater degree of customization of the service delivered to individuals.

Medium contact. Medium-contact (or mixed) service is characterized by limited direct contact with customers. Examples include bank branches, real estate firms, repair shops, and moving companies. Reducing the amount of direct contact allows the service provider to perform other tasks, some of which may involve other customers. Typically, service customization is reduced as direct contact is reduced.

Low contact. Low-contact service, also known as quasi-manufacturing, is characterized by the low level of direct contact with customers. Examples include mail-order stores, research laboratories, and the home offices of banks and real estate firms. In these situations, work is more standardized, with less customization of the work flow.

Consumer self-service. Some services can be standardized to the point that a customer can procure the service for him or herself, without any involvement with the service provider. Examples include automated teller machines at banks, pay-at-the-pump gasoline stations, and self-checkout registers at retail and grocery stores that use bar code scanners and accept credit and debit card payments. Office activities are not completely eliminated but may also be automated, as with certain financial transactions.

Manufacturing support services. The following are categories of services that are the most relevant to the support of manufacturing operations:

  • Professional services include engineering, accounting, medical, and legal. In production environments, engineering services are used to design products and production facilities. Cost accounting becomes important in price setting and maintaining operating margins. Legal services manage patents, copyrights, and contract development. They are considered support services in that they are not directly involved in production activities, unless they are part of an organization where their specialties are the primary service offered.
  • Trade services are typified by construction and maintenance services and often are associated with unions. Electricians, plumbers, welders, machinists, carpenters, and other similar roles are highly specific in nature. Union groups, such as autoworkers or communications workers, may encompass several trades when forming bargaining units of related trades.
  • Delivery services include setup and make-ready work. These initial tasks ensure that products are operating correctly and are ready for customers. Setting operating parameters, adjusting equipment, and other work necessary to get equipment into production also falls into this category.
  • Warranty work occurs when a product fails. Warranty work can be done as field maintenance or may require the item to be shipped to a depot to be repaired. In some cases, the work can be performed remotely as the failed item is connected to diagnostic equipment via telecommunications.
  • Maintenance services occur throughout the production cycle to keep equipment working. Maintenance services may be performed as warranty work and may be required to be performed on a specific schedule by qualified individuals in order to retain warranty protections. Maintenance can be performed by in-house staff or can be outsourced. These services are critical to the availability of production systems. Maintenance is performed at three levels.
  1. Corrective maintenance, sometimes referred to as break-fix maintenance, repairs equipment after a breakdown occurs. The time required to complete corrective maintenance directly impacts the availability of equipment after a failure. This maintenance service is critical when a run-to-failure operating philosophy is used.
  2. Preventive maintenance includes lubrication, replacement of worn parts, and other adjustments. Preventive maintenance forestalls equipment failure. Normal preventive maintenance inspections are performed on a regular schedule coordinated with the production schedule. Many of these inspections are performed during changeovers as a way to reduce downtime.
  3. Predictive maintenance anticipates failures and takes timely action to avoid them. Techniques, such as testing trace metals in the oil of jet engines, can pinpoint potential failures and allow operators to foresee problems before they occur, averting the need for later corrective maintenance. Predictive maintenance enables planners to schedule equipment outages to avoid unscheduled downtime by preventing failures from occurring.

4.3.2 Service system design matrix

The relationship between production efficiency and sales opportunities can be defined in a matrix that considers the degree of contact between customers and service providers. As direct contact between the customer and service provider increases, so do sales opportunities, typically at the expense of production efficiency. Conversely, when the service provider and customer have very little direct contact, sales opportunities are reduced but production efficiency increases.

A service system design matrix orders levels of contact in terms of increasing contact—from mail, to phone, to face-to-face. In the matrix, production efficiency is defined as the number of customers served over a specified period.

4.3.3 Service blueprints

A service blueprint is a flowcharting technique that allows service designers to identify the tasks involved in the service delivery system, isolate potential failure points in the system, establish delivery time frames, and set standards for each step that can be quantified for measurement. When developing service blueprints, special attention is given to the location of service providers relative to the customer. Blueprints recognize front room (direct) and back room (indirect) customer contact actions.

4.3.4 Queuing

How long a customer waits in line can be described mathematically with queuing models. Variables such as the rate customers enter the service system, the number of lines available, the average time spent with a service provider for each customer, and other probability factors can be used in mathematical models to determine expected wait times for each customer for various sets of assumptions. Queuing models are useful for the design and scheduling of waiting-line-type processes.

4.3.5 Service quality

In service, the assessment of quality typically is made during delivery. Each instance of customer contact is referred to as a moment of truth—an opportunity to satisfy or dissatisfy the customer. The customer compares the perception of quality received with expectation of service desired. Dimensions of service quality include reliability, responsiveness, timeliness, courtesy, assurance (trust and confidence in the service provider), empathy, and the appearance of the facility and personnel. Standard techniques are used to analyze and control quality in service processes, such as capability analysis, control charts, histograms, and fishbone diagrams. A service guarantee can define the meaning of service by setting standards of quality.