Rhian Silvestro

Towards a Classification of Service Processes

Over the years manufacturing managers have been unified by their acceptance of certain terminology to describe generic production processes. This has facilitated the sharing of ideas and management techniques and the development of our understanding of process choice implications on manufacturing strategies. In the service literature, no process model has been so powerful or pervasive as the manufacturing model. Postulates that a service typology which transcends narrow industry boundaries may lead to some cross‐fertilization of ideas and to an understanding of the management methods and techniques appropriate to each service type. Proposes a model analogous to the production process model, which has achieved such universal recognition in the world of manufacturing. Just as production volume is used in the latter model to integrate a wide range of production process dimensions, so suggests that the volume of customers processed per business unit per day correlates with six classification dimensions develo...

Applying the service profit chain in a retail environment

This paper reports the result of an exploratory study of the application of Heskett, Sasser and Schlesinger’s service profit chain to a single organisation, one of the UKs leading grocery retailers. The results showed correlations between profit, customer loyalty, customer satisfaction, service value, internal service quality, output quality and productivity; however there was no support for the claim that these are driven by employee satisfaction and loyalty. In fact, to the contrary, there was a strong correlation between employee dissatisfaction and store profitability. This research raises questions about the robustness of a central premise of the service profit chain, which is that strong business performance is the result of a mirror‐effect between employee and customer satisfaction. The paper considers the implications for management and calls for the development of a contingency based understanding of the drivers of business success.

Positioning services along the volume‐variety diagonal

Draws on the service management literature to enhance understanding of the key operational differences in managing professional services, at one extreme, and mass services, at the other. Contributions are drawn together, developed and integrated into the service process model. This yields an understanding of the contingencies which render the design, control and improvement of different service processes appropriate. Strategic implications of the service process model are considered. It is contended that cost effective services will be positioned along the volume‐variety diagonal. It is proposed that the service process model can be used as a strategic tool in three ways. First, it can be used to evaluate possible strategic moves along the volume‐variety diagonal. Second, it can be used to analyse a competitive area and evaluate a service offering relative to the competition. Third, it can be used to analyse internal organisational processes with a view to identifying processes which have different volume‐variety characteristics and which should therefore perhaps be managed separately.

Dispelling the modern myth: Employee satisfaction and loyalty drive service profitability

This paper reports some empirical findings which appear to challenge the received wisdom prevailing in the operations management, service management, TQM and HRM literatures, namely, that employee satisfaction and loyalty are key drivers of productivity, efficiency and profit. An empirical study of one of the UK’s four large supermarket chains reveals an inverse correlation between employee satisfaction and the measures of productivity, efficiency and profitability, the most profitable stores being those in which employees are least satisfied. Employee loyalty, measured in terms of length of service, also appears to be inversely correlated with productivity and profitability. It also emerges that the pressure to maximise store efficiency may be leading to dysfunctional managerial behaviour at store level. These preliminary findings suggest two imperatives for managers and academics. For managers, it is advocated that they analyse the relationship between employee satisfaction, loyalty and financial performance in their own organisations rather than assuming that the rhetoric of the management literature applies in all operational contexts. For academics, four contingent variables are proposed which distinguish those service contexts in which the assumed relationship may pertain: services where customer contact with staff is high; services where there is little opportunity for technological substitution; services where staff contact is critical to the customer value proposition; and services with high labour costs.

Applying the service profit chain to analyse retail performance: The case of the managerial strait‐jacket?

Purpose – The purpose of this paper is to apply Heskett, Sasser and Schlesingers service profit chain to a single retail service with a view to developing a better understanding of the performance linkages between employee perceptions and performance, customer perceptions and behaviour, and financial performance.Design/methodology/approach – The research was based on the case study of a UK home improvement store chain. Measures of each of the variables in the service profit chain were analysed using Pearsons correlation coefficient, with a dataset based on 75 stores.Findings – Although analysis of the performance relationships revealed many interesting correlations, the data lent little support for some of the expected linkages; in particular, the “satisfaction mirror” effect between employee and customer satisfaction and loyalty, and the link between customer loyalty and financial performance. The possible asymmetries and non‐linearity of certain performance relationships may also have added to the dif...

The manufacturing TQM and service quality literatures: synergistic or conflicting paradigms?

Compares, contrasts and assimilates the contributions of the TQM manufacturing and service quality management literatures. A manufacturing model of TQM is proposed, and then developed and enhanced in the light of concepts, tools and techniques which have emerged from the service quality literature. Examination of the core TQM precepts in the light of the service literature highlights certain key asymmetries and differences between the manufacturing and service literatures on quality management, both being characterised by different strengths and weaknesses. While the manufacturing literature is practitioner oriented and highly evangelical and universally prescriptive in tone, the service quality management literature adopts a more measured and academically rigorous approach, although it is arguably less successful in generating practical solutions for management. While the service quality management literature has clearly been enriched and significantly influenced by the TQM manufacturing literature, it is now contributing to the conceptual development of the core precepts of TQM and nurturing a sensitivity to the contingencies which render their application appropriate. Indeed, as the performance characteristics of services increasingly contribute to the success of manufacturing organisations, the issue in future may well be the conceptual transferability of TQM from service to manufacturing.

Product costing in service organizations

Conventional wisdom and empirical evidence suggest that in manufacturing businesses product costs are used for various purposes, including inventory valuation, product pricing and mix decisions and for management planning and control. In this paper the validity of these three specific uses in the service sector are explored in five large for profit service organizations. The first of our three conclusions is that inventory valuation was not a major issue in these five service organizations, as the inherent perishability of their services mean that they cannot be stored. Second, only two of the five organizations used full product costs for pricing decisions. Third, in all five organizations costs were planned and controlled via responsibility centres linked to functional activities rather than products/services, which did not seem to be a useful unit of analysis. This paper suggests that a closer alignment of a service organizations responsibility centres with its value chain might be a source of competitive advantage, and that more case study research is needed in this area.

Quality Measurement in Service Industries

A number of writers in the service management literature have observed that because service quality is difficult to measure there is a danger that service organisations will neglect to measure it, despite the fact that service quality is often critical to their competitive business success. The results of an empirical research project investigating the quality measurement systems of six multi‐site UK service organisations, all of which consider themselves to differentiate on the basis of service quality, are described. Two of the organisations were found to have very few quality measures and recognised that this was a major gap in their performance measurement systems. Two had developed a range of customer‐based measures of service quality which were reported regularly and widely in the organisations. The other two companies had developed a wide range of internal and external, hard and soft quality measures. These companies used managers as well as customers to measure both tangible and intangible aspects...

Applying gap analysis in the health service to inform the service improvement agenda

Purpose – The need to better understand patient priorities in order to provide higher levels of patient care is an ongoing challenge for managers across the UK NHS. Indeed, the failure of service providers to understand patient priorities can lead to action plans, investment and management decisions which are internally rather than externally focused. This paper seeks to report on the development and evaluation of a tool for measuring the gap between patients’ priorities and their perceptions of an NHS service, and the match between the patient and management perspective.Design/methodology/approach – The tool, an adaptation of the renowned SERVQUAL measurement methodology, is tested in UK NHS breast‐screening unit. The tool is used to measure the perceptions of two different types of patients, as well as those of three different types of staff.Findings – The study suggests that the tool can be used to quantify the gap between patient priorities and their perceptions of health service performance. The tool...

Challenging the paradigm of the process enterprise: a case-study analysis of BPR implementation

The dangers of functional organisation structures are well documented and have led to the advocation, particularly by exponents of BPR, of the process enterprise paradigm. This paper reports the results of case-study research that was conducted in order to explore the operational changes resulting from re-engineering companies along process, rather than functional lines. Increased market responsiveness, improved collaboration between functions and alignment of organisational objectives were some of the perceived benefits of the new process structures; but some disadvantages were also identified. Duplication of functional expertise and increased operational complexity resulted in an escalation of costs, the emergence of horizontal silos, inconsistency in the execution of functional decisions between processes, and general erosion of the efficiency of the operations network. These preliminary findings point to some possible contingencies of organisational design, suggesting that process structures may be conducive to the realisation of differentiation strategies, whilst functional structures may offer benefits to cost leaders. It is further proposed that matrix structures may be appropriate for companies adopting mixed strategies; however, it is envisaged that a more flexible approach to organisational design, based on a network rather than a matrix paradigm, could stimulate new developments in the future quest for strategic and structural alignment.