Service profit chain - operation strategy, Operation Management

Service Profit Chain - Operation Strategy

Prior to their work on the service-profit chain, Heskett and colleagues produced what they considered as the linkages between the employee and the customer. This is depicted in the next figure (page 88) as a 'cycle of failure'. Their contention is that service organisations have failure 'built-in' to their organisations by placing the least paid, least trained member of staff at the customer interface despite the fact that customers are becoming increasingly discerning in their demands. They suggest that many companies are more interested in paying for managerial control, exemplified by multiple levels of management than they are in providing better customer service.

1616_Service Profit Chain – Operation Strategy.png

Heskett asked the question 'would we rather pay for control than service?' To support his arguments he refers to a research study in the US of major retailers where it was found that of customers who defected to a rival company, only 14 per cent did so because they were unhappy with the product; the remaining 86 per cent did so because they were unhappy with the service. Heskett (1991) suggested that the research study showed that customer loyalty was a good predictor of not only current but future profits and as an important indicator it should be measured. Reichheld (1996) suggests that as the quality revolution in manufacturing has had a profound impact on competitiveness, so too will 'zero defects' have an impact on service management. The challenges for operations managers in the service sector would appear to be just as demanding as for those in the manufacturing sector.

 

Posted Date: 3/18/2013 3:48:03 AM | Location : United States







Related Discussions:- Service profit chain - operation strategy, Assignment Help, Ask Question on Service profit chain - operation strategy, Get Answer, Expert's Help, Service profit chain - operation strategy Discussions

Write discussion on Service profit chain - operation strategy
Your posts are moderated
Related Questions
A production manager at a Contour Manufacturing plant has inspected the number of defective plastic molds in five random samples of 30 observations each. Following are the number o

You have saved $5000 for a down payment on a new car. The largest monthly payment you can afford is $350. The loan would have a 10% APR based on the end of month payments. What is

In light of today's high standard of living, why do you think that employee theft is such a widespread problem in industry?

find the optimal location for kilroy"s distribution center in this expanded version of the problem

How is foreign domestic investment confidence index useful to businesses?

1. A company hires a file clerk but does not inquire into his criminal history. In fact, he has had several convictions for driving while intoxicated. On a lunch break, he gets dru

If you are picketing your employer for higher wages and your neighbour is hired to replace you only while you march, the Mackay Doctrine says that, when the strike is over, your ne

Describe the framework of the general model of planned change. Include a discussion of each activity and a typical sequence of events.

Where in Europe, Africa, and Asia does Nestlé have operations? How many factories do they have in Spain and Thailand? Why does Nestlé have multiple facilities in a single country?

Explain Always Better Control analysis of inventory control. ABC Analysis of Inventory Control: ABC analysis is the extensively used approach for classifying the inventories