Page 55 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Production and Operations Management

Notes employ less expensive unskilled workers as do most factories. Firms categorized as service
factories include truck lines, hotels/motels, and airlines.
The upper right quadrant includes firms with a low degree of labor intensity but a high degree
of interaction and customization. The upper right quadrant is labeled “Service Shop.” Hospitals,
auto repair shops and lots of restaurants are found in this quadrant.

The lower left quadrant includes firms with a high degree of labor intensity but a low degree of
interaction and customization. This quadrant is labeled “Mass Service.” Mass service providers
contain retail/wholesale firms and schools.
Lastly, the lower right quadrant includes firms with a high degree of labor intensity and a high
degree of interaction and customization. The lower right quadrant is labeled “Professional
Service.” This quadrant is alike to the upper left section of the Product-Process Matrix where job
shops and batch processes are found. Doctors, lawyers, accountants, architects, and investment
bankers are usual service providers that tend to be labor intense and have a high degree of
customer interaction and customization.

In 1994, Dotchin and Oakland projected that in addition to the four categories: service factory,
service shop, mass service and professional service, a fifth category should be added: personal
service. They rationalize the inclusion by describing personal services as those directed at
people, thereby high contact, as opposed to professional services which are bound for to things,
thereby, achieved with little contact time.
Self Assessment

Fill in the blanks:
6. Service Process Matrix can be helpful when investigating the …………..changes in service
operations.
7. ……………….can be described as the ratio of labor cost to plant and equipment.

3.3 Managing Service Quality

Customers test the quality of service of a firm at every encounter. Each of the customer encounters
is called ‘moment of truth’ and a series of moments of truth lead to a relationship. If the experience
from service encounters are bad, it may not lead to customer satisfaction. Management of
service quality is a growing concern for a service marketer. Quality management involves
deciding on quality standards and implementing a method of assurance on performance level of
the staff and the facilities. Quality has emerged as a major competitive element in service
company strategies. Service providers are giving increasing emphasis on creating reputation
for good quality of service as this provides a positive image for their organization.

!
Caution It must be kept in mind that if quality people leave the organization, the entity
and quality of the service is affected, dampening company’s overall image.
The service quality management process involves matching evolving customer expectations.
Customers have their own service expectations from a firm. A customer is satisfied when his
expectation match the perceived service. When the perceived service passes over the expected
service, the customer is delighted. Failure in meeting expectation results in customer
dissatisfaction, complaint and withdrawal of the service consumption. There are three reasons
for the increasing relevance of quality management in services sector as mentioned in the
Box 3.1.

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