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
What legitimates intruding into others lives' through unobtrusive surveillance, through market research, or by whatever means?

Blue Computers, a major PC manufacturer in the United States, currently has plants in Kentucky and Pennsylvania. The Kentucky plant has a capacity of 1 million units a year and the

Describe the eight general strategies in the business buying decision process


Describe the four options highlighted in the case study in terms of their feasibility, acceptability and vulnerability.

explain how a supply chain management would enhance profitability with an analysis of supply chain network

Features of Production and Operation Management 1. Production management is the process of making decisions. 2. Decisions are made regarding transformation of inputs outputs. 3

Complete additional investigation on the JIT and EOQ models. Discuss which of the two inventory models is better and why: Economic Order Quantity or Just-in-Time?

Suggest two reasons why it is necessary for business organizations to act ethically, and provide support for your rationale.

Public corporations are led by CEOs and other upper-echelon leaders who, in turn report to shareholders and board of directors (BODs). Interestingly, even though the board overseas