“The customer is always right” as the most used mantra goes and this illustrates the importance of a consumer in the operations of any kind of business. After all every decision and every action made by the firm is influenced, affected, and driven by the consumer and their lifestyle. With this said, operations can be defined by the degree of consumer participation in a business. We often equate participation with direct involvement as in having to be physically there during operations.
However, of course this is not the case in the corporate world. Consumer participation is defined in terms of the level of interaction a consu...
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...mer has with its supplier, on any level of the purchase process. For example, a consumer’s choice of shipment is already a type of consumer participation. Personally, as a consumer, we would always want to get our money’s worth or at the very least the kind of service that we expect. In addition, this is why it is often not the case where consumers remain passive in a business’s operations. There a different levels of consumer contact. Although consumer and service provider would always interact with each other, it does not always mean that all employees in an operation will have to deal directly with the consumer. These kinds of operations, operations that do not deal with consumers directly, are called ‘back office’ tasks or low contact operations. Back office operations, such as stocktaking and product controls, adds value to the inputs of the operations and provides better service without being involved in direct consumer relations. On the other hand, operations that directly involve themselves with the consumers are called high contact operations or ‘front office’ tasks. These tasks usually require personnel with good interpersonal and communication skills since they deal with the customer both as an input and as output of the operation. One example of such task is direct selling. These operations identify the type of processes in a firm and eventually define the type of service they offer. Both high and low consumer contact operations affect the kind of processes that are involved in a firm. There are three main process types associated with service operations, individual processes, functional processes, and cross-functional processes. Individual processes are processes carried out by separate individuals.
Functional processes are usually contained within a department. Lastly, cross-functional processes occur in several functional areas and overlapping responsibilities often happen to become more efficient. The degree of costumer contact becomes a determinant in the kind or mixtures of processes involved when the variability of outcomes and the costumer’s satisfaction on these outcomes are taken into consideration. The differences in outcome usually happen due to costumer participation. The greater the participation or ‘contact’ of the consumer in the service processes the harder it is to deliver the service efficiently and therefore requires more efficient, and sometimes, complex process models or types. In order to understand how this happens we can look at the different kinds of services offered in the commercial world today.
In the Service Process Matrix, as explained by Wheelwright and Hayes, the classification of service includes elements of both the intensity of processes and the degree of ‘customization.’ Customization is defined as the ability to alter service in order to meet customer preferences. Customization in essence defines the degree of consumer contact. An Airline service is the perfect example of a ‘Service Factory.’ A Service Factory, as explained by the matrix, low degree of process intensity and a low degree of interaction and customization. Airlines make use of repetitive assembly and continuous flow processes done by specific individuals and departments. Nevertheless, there are hardly any instances of cross-functional processes since there is hardly any customization from the consumers. The conventional sale of airline tickets, meaning excluding online ticketing reservation and sales, is more or less standardized and leaves hardly any room for consumers to choose what they want. Because of this, processes are less complicated and contained.
Professional services, on the other hand, include complex processes compared to the earlier example. Doctors, lawyers, accountants, and the like are considered as professional services. These services have a high degree of interaction and customization and as a result have more complex and overlapping processes. A patient that is in need of a heart transplant would not only need a heart surgeon in order to deliver the service. He would need an anesthesiologist, a general surgeon, and residents in order to perform the needed processes to produce the demanded outcome, which is a new healthy and beating heart. In addition, if the patient was diabetic, he will need an expert in the field to oversee the operation. This illustrates the numerous cross-functional processes in professional services. Another example of a professional service operation is investment banks. Investors, naturally, would demand a close monitoring and participation in their investments and they often demand various customizations in their investment portfolios. Because of these investment banks have all three types of processes in order to meet the demand of the customer.