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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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.
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.
Today's session began with a disappointment of not having any team come up with a concrete final solution to the Southwest case. The actual decision and the relevant calculations were discussed in the class.
We went on to discuss what I call the hands and legs of the service. The physical location of the service, the Servicescape. We understood the factors that impact approach, avoidance and interaction behavior of the employees and customers of a service firm. We tried to understand through a lot of examples how the physical layout and other subtle aspects like the smell, music etc impact the customer and employee through physiological, emotional and cognitive means to determine approach, avoidence and interaction behavior. A servicescape is a visual metaphor of the organization and needs to reflect the core value of the service. Following are the three announcements I made:
During the next two sessions, we would be discussing cases titled Benihana of Tokyo and the Pharmacy improvement at CVS. Team-case allocations can be found in the course outline. Keep watching this space for the assignment questions. In this session, we discussed the remainder of the Southwest case. It is strange that the everybody in the class (except for Sonia) looked clueless about the questions posed in my previous post! Sometimes, I feel who I am doing this for! Anyway, we went ahead with the discussion on how Southwest transformed itself over the last few years to match up with the volatile conditions of the airline market. We also did some number crunching on what makes Southwest's low turn around time a key competitive advantage. We also discussed the pros and cons of the LaGuardia entry decision. While an overwhelming majority of the class did not want to enter LaGuardia, only Ankit Goyal and Amar Garg seem to be interested to go ahead with it. The teams promised to get back to me with a quantitative analysis of the LaGuardia decision. I have my fingers crossed!! I expect them to come up with solutions by putting themselves in the shoes of Gary Kelly. We ended the session with closing discussion on Strategic Service vision, how it should be both externally as well as internally focused, its relation to Service Profit Chain and finally the customer value equation. Relevant slides have been attached. I would like to thank Prof. Pierrie Dussauge from HEC, Paris for providing us with the Southwest Airlines video as well as the slides that were used for the discussion. More on Southwest can be found here and here.
In the last session, we finished taxying around theory on services and took off our Service Operations course with our first case discussion on the Southwest Airlines. I must say we did have a smooth take off. The discussion, as usual, was lively with everybody pitching in their two pence and some people pitching in two pounds. We discussed what made Southwest what it is today. Further, the class contributed to build what is known as the Strategic Service Vision comprising of target market, service concept, operating strategy and support systems.
In the next class, we shall continue discussing the Southwest Airlines case. We will discuss the following questions.
The long case, in the course compendium, is to be used for this answering these questions. In this session, we continued with our team activity on service classification. The teams presented the service classifications that were allocated to them. The entire class pitched in very well into the discussion and came out with more and more examples of how a certain service belongs or doesn't belong to a quadrant. In some cases, there were heated arguments and disagreements on whether a certain classification was significant at all! Overall, the class was overflowing with energy and enthusiasm though it was the last session of the day and the students had been through a lot of lecturing since morning! Relevant slides have been attached. We ended the class with a video of Southwest airlines that will be discussed in the next session to be held on Monday. Following are the questions that will be the focus of the discussion.
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November 2019
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