Today, we discussed the ITC echoupal initiative and drew significant service lessons from it. Firstly, that service orientation is not limited to customers and employees alone but also to suppliers. Yet another key insight of the discussion was how ITC took significant risks in developing the social contracts to ensure an efficient supply chain. The last key insight was about how the ITC reinvented the farmer engagement initiatives by weaving it into the social fabric the farmers were already a part of.
As practicing managers, sometimes you have to think radically differently to redefine your service concept and rethink the type of interactions your employees, customers or suppliers are having. Here is a link to a talk by Prof. Kamalini Ramdas, of the London Business School who is a key proponent of innovation in services through radical rethinking of interactions. Full article here: https://hbr.org/2012/12/four-ways-to-reinvent-service-delivery/ar/1?referral=0060
If you feel the above video is too long, here is a link to two and a half minute version of the talk which pretty much gives the gist.
https://hbr.org/2012/11/dont-be-afraid-to-rethink-your.html
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Please watch the following videos before the discussion on ITC echoupal. Think through the following questions.
Throughout the course we saw that services were always directed towards customers. Who is ITC serving using the eChoupal? Does it make business sense to do so? What was ITC's motivation for creating eChoupal? What were the key drivers for the creation of ITC's eChoupal? What are the key weaknesses of the eChoupal model? How could ITC guard against these weaknesses?
In the last week of the course, we are going to discuss two amazing service organizations based out of India. The first one, that we discussed today, was the Aravind Eye Hospital.
We began with a discussion of the various success factors of Aravind Eye Care. Followed by the various weaknesses and how Aravind has and could overcome these potential weak spots. Do visit their website to know more about their initiatives. Following is a TED talk by Thulasiraj who was featured as a part of the case. Note: The following entry was made by Debleena Roy, our guest speaker.
What is Service Operations in a B2B world? That might well have been the question in students’ minds when we started the session, that too on a busy weekend. 6 hours, bright, engaged minds and a weekend later, my learning from the session were: Customer Journey Mapping and looking at the experience of what the customer is going through and the improvements in service design the suppliers can suggest becomes an interesting way of breaking the B2B services problem. As we did the class exercise on doing a customer journey map for a disruptive talent sourcing start-up, the teams came up with interesting and disruptive ideas such as using capacity planning to forecast recruitment requirements, using online tests to screen students before shortlisting them for companies, providing background checks for companies as additional service and even providing contract labour for manufacturing/retail/automotive industries. If only the talent sourcing companies could be the flies on the wall during the session. On the management of service operations, it was interesting again to look at how offshoring and outsourcing decisions fail because of lack of strategic planning, supplier selection and ongoing monitoring. A lively discussion on Boeing’s outsourcing failure made Sunday afternoon well spent. In all, introducing the concept of Service operations through the lens of designing new services as well as managing complex service operations for Suppliers and Customers alike to such a bunch of engaged and focused students, was a pleasure and a great learning from me. And I’ll carry a lot of fond memories of the class and the questions on the topic and beyondJ Through the Zipcar case, we discussed about service firms with high customer exposure which are usually vulnerable to various forms of customer induced variability. We saw how services could use Instrumental and Normative control mechanisms to influence customer behavior to alleviate customer induced variability thus providing higher customer satisfaction. We discussed various solutions for Zipcar, as well as many other contexts in which normative and instrumental controls would work. The class concluded with a note that while whether normative means work or not, managers systematically underestimate the impact of using normative means of influencing customer behavior. As future managers, it is recommended to first try out normative means before going for instrumental approach.
Today, we discussed the struggles of the Starbucks case as it grapples between its original coffee loving affluent customer base and new trendy, impatient, not so price sensitive customer base. We saw how Starbucks, at the time of its inception, was a tightly knit strategic service model which over the time has evolved mainly in terms of the target market segment. We discussed the various operational changes that were made to the accommodate the new set of customers while trying to retain the old. We finally discussed in detail the pros and cons of the proposed $40 million investment in increased labor hours.
Managing supply and demand is pivotal for any service operating under uncertainty. We discussed the generic strategies used by services to manage demand (level or elephant strategy) and manage supply (chase or cheetah strategy). We then moved on to the discussion of the newsvendor model in the context of overbooking of capacity and capacity allocation of flight seats to different fare classes. We discussed protection levels, booking limits and nested fare buckets. We discussed the utilization of the Littlewood's rule and the EMSR heuristics thus covering the basics of Revenue Management. This week's slides along with excel sheet containing the EMSR heuristics have been attached.
We began today's session by understanding negativity bias, which is the reason why you all recalled negative service outcomes more than positive service outcomes. We then moved on to understand how service quality is more challenging to manage than product quality. We then discussed the determinants of service quality, the SERVQUAL measure of service quality and GAP model. A sample SERVQUAL form has been attached at the end of this post. Finally, we briefly discussed statistical quality control, its basic purpose and outcomes. The intention was to give the class a rudimentary understanding of the overall functionality of control charts. Slides will be uploaded at the end of the week. Here is a funny take on type 1 and type 2 errors.
In the final session before mid term, we discussed about waiting lines. We briefly discussed the basics of queuing theory with the aid of an interesting audio visual. We discussed the pros and cons of pooled v/s separate queues. We further discussed psychology of queuing and discussed the various tactics companies could apply in order to reduce the perception of waiting. We saw how Walt Disney world successfully applied these measures to improve customer satisfaction. Further, I am thankful to all of you for your valuable feedback. I shall definitely try to incorporate your feedback for the remainder of the course. Relevant slides have been attached.
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November 2019
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