SERVICE SECTOR MANAGEMENT
TOPIC:- SERVICE PRODUCTIVITY
THINGS TO BE LEARNED UNDER SERVICE PRODUCTIVITY:• • • • • • • • Introduction. Definition of productivity. Services production concept. Quantity and quality dimensions of service offering in-service productivity. Managing productivity. Reasons for low productivity in service industries. Strategies for improving service productivity. 7 approaches to improve service productivity.
INTRODUCTION
RODUCTIVITY:• Ratio of input and output in terms of men and materials.
• Productivity is higher if more output is obtained with same or less input of resources.
• Definition:- Peter Drucker: “Productivity means balance between all the factors of production that will give the greatest output for smallest efforts.”
….
• Productivity is said to be lower when output remains the same for the same or the greater input of resources.
• Managing productivity is yet another strategic issue in service organisation. • Relevance of productivity management can’t be overlooked.
GOODS v/s SERVICES
• Services are performed and not produced. • Services can’t be stored. • Quality varies in service sector.
• Consumers are an integral element in service productivity.
SERVICES PRODUCTION CONCEPT
1] Efficiency:- the rate at which input is converted into output. Eg:- customer served per catering assistant from a restaurant per day. {quantitative measurement} 2] Economy:- cost of selecting and hiring people, and conversion from training into resource inputs to provide service.{not measure of performance, but level of performance}
….
3]Production function:- includes all the resources(staff, buildings, equipments) combined to produce intermediate output.
4]Capacity utilisation:- how good is the management at converting intermediate output to final output into customers take up. Eg:- percentage of seats taken up by customers in a restaurant.
QUANTITY AND QUALITY OFFERING OF SERVICE OFFERING IN-SERVICE PRODUCTIVITY
• 1] Quantity aspect of productivity:-service providers have invested heavily in technology as a substitute for labour. eg:- ATM to replace bank tellers, smart cards, etc.
2] Quality approach of productivity:-difficult to define in case of services. -output is in form of quality is what the customer in fact pays for, which is to a large extend intangible and may be difficult to quantify. -
MANAGING PRODUCTIVITY:• Productivity- a competitive advantage for any organization irrespective of goods and services. • Depends upon performance of the employees. • Long established behaviour patterns can be a hurdle to improve productivity service organizations.
• Lovelock and young feel- productivity improvement programme.
REASONS FOR LOW PRODUCTIVITY IN SERVICE INDUSTRIES:• Productivity in terms of services industries cannot be identical when compared to tangible products. • Service industries are labour intensive industries.
• Easier to lower per unit cost of output in capital intensive industries than in labour intensive industries.
…..
• Wages in service industries going as fast as goods producing industries. • Service establishment is small and employ only a small number of people.
• Little opportunity in smaller firms to develop specialisation or practice division of labour.
• Difficult to increase output with machines i.e need more people in order to generate an increased output.
STRATEGIES FOR IMPROVING SERVICE PRODUCTIVITY:1} Improving staff performance through training: Eg:-train employees to provide better service 2} Reducing service level: Eg:-doctor giving less time to patient and role of junior doctor. 3}Adding new services:Eg:-hotels adding parties and marriages to their banquet services.
Contd..
4} Involving customers in delivery process:Eg:- self service in restaurant [exceptions likehospitals] 5} Managing capacity:-using part time employees, {management institutions} - training the employees, {housekeeping, room service..} -consumers participation,
…..
-sharing capacity with others, {restaurants selling branded ice creams rather than investing in inhouse ice cream making facilities.}
-expansion.
Thus balance should be maintained between productivity, standardised quality and customer.
….
6} Look to customers to increase productivity:-develop customer trust, -understanding customer habits, -pre-test new procedures and technology before commercially introducing. -educate customers how to use service innovations.
SYSTEM APPROACH TO IMPROVE PRODUCTIVITY SERVICE:• “Implementation of technology, engineering and management science into service industries for raising the productivity and increase customer satisfaction.” • Creating new methods and systems that would eliminate wasted efforts.
…
• It considers • new layouts, • better engineering, • and co- ordinated efforts.
• Eg:- Mc Donald's.
• Eg:- Super market
7 APPROACHES TO IMPROVE SERVICE PRODUCTIVITY:1] Better selection and training procedures. 2]Quantity of service can be increased by surrendering some quality.{eg: patient getting due attention from the doctor}
3]Adding equipment and standardising production.
….
4] reduce the need for service by inventing a product solution.{eg:- emergence of VCR, affecting ticket sales of cinema theatres…later cable television reducing demand for VCR and today high quality CD-ROM vanished VCR} 5]Design a more effective service.
6]Present customers with incentives to substitute their own labour for company labour.
….
• Eg:- restaurant specialising in buffet lunches is actually replacing employee with customer self-service. 7]Harness the power of technology. {eg:- speedy railway computerised reservation system has replaced the manual system.}
doc_260808681.ppt
TOPIC:- SERVICE PRODUCTIVITY
THINGS TO BE LEARNED UNDER SERVICE PRODUCTIVITY:• • • • • • • • Introduction. Definition of productivity. Services production concept. Quantity and quality dimensions of service offering in-service productivity. Managing productivity. Reasons for low productivity in service industries. Strategies for improving service productivity. 7 approaches to improve service productivity.
INTRODUCTION
RODUCTIVITY:• Ratio of input and output in terms of men and materials.• Productivity is higher if more output is obtained with same or less input of resources.
• Definition:- Peter Drucker: “Productivity means balance between all the factors of production that will give the greatest output for smallest efforts.”
….
• Productivity is said to be lower when output remains the same for the same or the greater input of resources.
• Managing productivity is yet another strategic issue in service organisation. • Relevance of productivity management can’t be overlooked.
GOODS v/s SERVICES
• Services are performed and not produced. • Services can’t be stored. • Quality varies in service sector.
• Consumers are an integral element in service productivity.
SERVICES PRODUCTION CONCEPT
1] Efficiency:- the rate at which input is converted into output. Eg:- customer served per catering assistant from a restaurant per day. {quantitative measurement} 2] Economy:- cost of selecting and hiring people, and conversion from training into resource inputs to provide service.{not measure of performance, but level of performance}
….
3]Production function:- includes all the resources(staff, buildings, equipments) combined to produce intermediate output.
4]Capacity utilisation:- how good is the management at converting intermediate output to final output into customers take up. Eg:- percentage of seats taken up by customers in a restaurant.
QUANTITY AND QUALITY OFFERING OF SERVICE OFFERING IN-SERVICE PRODUCTIVITY
• 1] Quantity aspect of productivity:-service providers have invested heavily in technology as a substitute for labour. eg:- ATM to replace bank tellers, smart cards, etc.
2] Quality approach of productivity:-difficult to define in case of services. -output is in form of quality is what the customer in fact pays for, which is to a large extend intangible and may be difficult to quantify. -
MANAGING PRODUCTIVITY:• Productivity- a competitive advantage for any organization irrespective of goods and services. • Depends upon performance of the employees. • Long established behaviour patterns can be a hurdle to improve productivity service organizations.
• Lovelock and young feel- productivity improvement programme.
REASONS FOR LOW PRODUCTIVITY IN SERVICE INDUSTRIES:• Productivity in terms of services industries cannot be identical when compared to tangible products. • Service industries are labour intensive industries.
• Easier to lower per unit cost of output in capital intensive industries than in labour intensive industries.
…..
• Wages in service industries going as fast as goods producing industries. • Service establishment is small and employ only a small number of people.
• Little opportunity in smaller firms to develop specialisation or practice division of labour.
• Difficult to increase output with machines i.e need more people in order to generate an increased output.
STRATEGIES FOR IMPROVING SERVICE PRODUCTIVITY:1} Improving staff performance through training: Eg:-train employees to provide better service 2} Reducing service level: Eg:-doctor giving less time to patient and role of junior doctor. 3}Adding new services:Eg:-hotels adding parties and marriages to their banquet services.
Contd..
4} Involving customers in delivery process:Eg:- self service in restaurant [exceptions likehospitals] 5} Managing capacity:-using part time employees, {management institutions} - training the employees, {housekeeping, room service..} -consumers participation,
…..
-sharing capacity with others, {restaurants selling branded ice creams rather than investing in inhouse ice cream making facilities.}
-expansion.
Thus balance should be maintained between productivity, standardised quality and customer.
….
6} Look to customers to increase productivity:-develop customer trust, -understanding customer habits, -pre-test new procedures and technology before commercially introducing. -educate customers how to use service innovations.
SYSTEM APPROACH TO IMPROVE PRODUCTIVITY SERVICE:• “Implementation of technology, engineering and management science into service industries for raising the productivity and increase customer satisfaction.” • Creating new methods and systems that would eliminate wasted efforts.
…
• It considers • new layouts, • better engineering, • and co- ordinated efforts.
• Eg:- Mc Donald's.
• Eg:- Super market
7 APPROACHES TO IMPROVE SERVICE PRODUCTIVITY:1] Better selection and training procedures. 2]Quantity of service can be increased by surrendering some quality.{eg: patient getting due attention from the doctor}
3]Adding equipment and standardising production.
….
4] reduce the need for service by inventing a product solution.{eg:- emergence of VCR, affecting ticket sales of cinema theatres…later cable television reducing demand for VCR and today high quality CD-ROM vanished VCR} 5]Design a more effective service.
6]Present customers with incentives to substitute their own labour for company labour.
….
• Eg:- restaurant specialising in buffet lunches is actually replacing employee with customer self-service. 7]Harness the power of technology. {eg:- speedy railway computerised reservation system has replaced the manual system.}
doc_260808681.ppt