Service Experience Excellence

Operations Management Role in Service Design: Choreography

2012-03-02T15:11:00.000-05:00

Chris Voss, an operations management professor from the London Business School has published several articles indicating that the role of operations management in service design and delivery is one similar to a choreographer. This video reminded me of that concept:

Noteworthy happenings

2012-02-29T09:28:00.000-05:00

The famous Metropolitan Opera has announced that they are going to use a dynamic pricing model for tickets based on demand for better seats.

Airlines introducing cuddle class: innovation in the economy class seating.

Hotel's trying to spin off their restaurants, well at least separate them from the hotel restaurant stigma.

The future: using video game technology in you shopping cart.

WSJ: Waiting in Line

2012-02-28T22:30:00.000-05:00

Here is a WSJ article on the science of waiting in line. Its from back in December of last year, but I just saw it today and though I'd like to capture it. I think the visual from the article does a great job describing several issues around the psychology of waiting:

and to go along with my recent foray into finding old Sesame Street Clips that might have something to do with a service concept, here is a video about a frog who is confused about where he stands in line:

Sequence Effects: Album listening edition

2012-02-24T00:46:00.004-05:00

I was poking round on the Monterey Jazz Festival website the other day and found this video of an interview the artist in residence, Ambrose Akinmusire:

I think artists seem to understand the importance of sequencing and considering the entire package when designing something. In my research I hope to learn from the artists and show that this can be applied to service design. With any luck, I can meet Ambrose and talk with him more about these ideas...

Reading the table

2012-02-24T00:27:00.006-05:00

Wall Street Journal reported recently on some strategies about how a waiter might "read" a table, i.e., learn from the mannerisms of the customers about how best to serve them. I found the interactive picture pretty revealing:

I think this is a good example of how a service process can be very different from a manufacturing process. In a traditional manufacturing process you have to train a person to do the same thing all day every day: put the bolt into the hole over and over again on the assembly line. In a service, the production worker must be able to react to the changes in the process, most notably the differences of customers. Treating all customers the same way may lead to the wrong experience for some customers. Customers must be treated individually.

Here's a good sesame street clip that shows what might happen if the wrong message is given to the wrong customer:

Backstage design: LDS general conference edition

2011-04-01T23:03:00.001-04:00

The LDS Church (of which I am a member) is hosting its semi-annual world wide General Conference this weekend. The conference is broadcast from Salt Lake City, UT to 13 million members of the church around the globe. The conference mostly includes talks given by the leaders of the church given in the Conference Center, a building designed and built primarily for this one purpose:

With 21,200 seats, the Conference Center is considered to be the largest theater auditorium in the world; the next nearest holds only about half as many people. But the months of careful planning and preparation create an unmistakable atmosphere of a house of worship as more than 100,000 Saints gather in the Conference Center twice a year to hear the counsel of living prophets and sing the hymns of Zion.

Last week the Church released a news brief describing some of details that take place in preparation of the conference:

An extraordinary amount of work requiring the coordination of many Church departments and hundreds of people around the world goes into preparing for general conference. The five sessions of conference draw a total of about 100,000 people to the Conference Center every six months and are broadcast to millions more around the world.

The article provides some details about the building of the rostrum, the floral arrangements, the camera, sound, lighting, satellite broadcasting, translation, teleprompting and others aspects that happen behind the scenes to make the conference successful. But success from the perspective of the "behind-the-scene" design is defined in an interesting way:

“Our goal is to be totally transparent,” said Russ Crabb, a producer for general conference. “We want to come away from conference with a message that’s clean and clear to everyone who’s listening or watching, and we want to support the First Presidency and Church leaders at a level that does that.”

“I think the overall level of preparation lends itself to the importance of conference,” said Thomas Smith, safety manager for the Church Media Services Department. “There is planning so this experience is not one that detracts from the spirit of conference. . . . We’re trying to make it something that will touch people’s hearts and bring them to Christ.”

The idea of transparency of service design is not a new one, it's what makes the backstage preparation difficult; if transparency in the preparation fails the delivery of the core service is compromised or at least sub-optimal.

Check out the videos on the link about the preparation that goes in to producing a weekend of spiritual enrichment.

Sound as an element in experience design

2011-03-16T22:53:00.000-04:00

Another quick post since I am spending most of my time writing my dissertation. I thought this was a good example of using sound as an element of service design.

Making the queue part of the experience: Disney Edition

2011-03-16T22:47:00.000-04:00

I'm in the thick of dissertation mode, but I found this video interesting and wanted to post it just to be able to record it.

Dinner and a Movie - Mash-ups

2011-03-02T12:20:00.000-05:00

Service Encounter Onstage recently blogged about the benefits of combining two experiences into one - a dinner AND a movie. AMC calls is "Fork and Screen".

I think the premise is solid; however, I think it is folly to think that since I do movies well, I can easily do food well or vice versa. Certainly the nature of the experience is different, the first being the tangibility of the food vs the intangibility of the movie - if the food is no good the blame falls on the theater, if the show is no good the blame will fall on the movie producer. Ordering and eating food is an active customer action while watching a movie is passive. I wonder if combining these two disparate forms of experience is a good idea from a management stand point; at the very least it would raise a lot of questions about how quality and experience theme be maintained, how are customer expectations managed, how do HR policies change etc?

Something like this came up in class the other day as a joke. We were discussion the intangibility of services and compared a massage to an auto repair shop. Massages are very intangible because you leave with only a feeling of relaxation, but no physical product. I always thought that an auto repair was pretty tangible because you do get a car back when you are finished, but a student pointed out that because it is difficult for customers to know if the car is actually fixed or if it needed what was said to be fixed, it was very intangible and customers leave feeling stressed. So we came up with a recommendation of a massage at the auto repair shop to relive stress of the unknown.

All this talk of combining things reminded me of a term "Mash-up" made popular by the television show Glee. the idea of a mashup is to combine elements of two songs to create a new better song - maybe the melody of one song with the lyrics a rhythm of another In their words:

"A 'Mash-up' is when you take two songs and you mash them together to create an even richer Explosion of Musical Expression."

It seems to work best if the two songs have something in common enough for the audience to pickup on the clever combination of the themes of the two songs. Perhaps similiar advice might apply when considering combining two experiences. Maybe a dinner and a movie might fit better together than a massage and an auto repair?

Here's a clip of some Glee mash-up action. Enjoy!

Analytics of a Service

2011-03-01T13:04:00.000-05:00

The good news is that I have recently accepted a faculty position at the Naval Postgraduate School in Monterey California! I will likely be teaching business statistics, so in preparation I have started an additional blog to record some idea to share with my future student along the line of business statistics. In the meantime, I'll keep posting here too. In honor of this new blog, I found a great clip from IBM touting the use of analytics in a healthcare setting:

We had a great discussion in my operations management MBA class yesterday about what I identify as 2 main frameworks that can be applied to practical service operations management. I call them analytical and behavioral. Under analytical we discussed queuing, revenue management, optimization, simulation, data modeling, etc, while under the behavioral framework we have to understand motivation, experiences, emotions, needs, etc. Because customers are often in the service process, ignoring the behavioral aspect can be detrimental. Additionally, behavioral aspects of a service cannot be delegated to the marketing department alone, instead the discussion of the experience desired for customers has to be a part of the operations management priorities or it won't be executed. This clip discusses how a hospital in Toronto has been able to record and analyze data from a new born from the instruments that surround it. The difficulty in the behavioral side of service operations management is that measurement is hard and near impossible in real time. While it is fairly easy to count how many people are in a line at a give time, it is not easy to tell who is upset about it and who is not.

Enchanted Art of Disney Cruise

2011-02-14T21:28:00.000-05:00

I've blogged about this before here, but I like the idea so much I wanted to show it again - now it full production mode. What I like most is that it is more than just a new monitor with an animation on it, if it ended there it would just be a TV with a motion sensor on it. The exciting part is the interaction that can take place in the game.

Back of the house management: Airport baggage handling edition

2011-02-04T11:12:00.003-05:00

Not a lot of detail about how they do things (i.e., this is a commercial of sorts for IBM services), still this video does a fair job of describing the complexity of baggage handing and routing. My wife and I had a conversation about this on our last flight; we were both in awe that baggage usually (not always...) ends up where we are going even after hoping several airports with delays and cancellations.

My favorite lines:

... there are two worlds, the worlds that the customer goes in and the world of the processes, like baggage handling.

... we must make more capacity available by making the system smarter.

At first blush it seems that this type of operational efficiency improvement has little to do with the "experience" of a customer since the customer is not directly being processed. However, we all know that after a long day of flying the worst thing that an airline could do is say that your bag is in the Bahamas (unless you are in the Bahamas - in which case good for you...) Worst still, is that this type of service failure becomes apparent to the customer at the END of the experience. My research suggests that that is the worse possible time for such a low point in the experience. So, its easy to see that although this is clearly not a customer facing operation, it has dramatic impact on the overall experience of flying.

Further thoughts: it might be interesting to consider if the timing of when to tell a customer that their bag is not going to be at their final destination upon arrival will have impact on service recovery aspects. Again, research suggests that if you have bad news for a customer, you should give it to them early on as opposed to later. Similarly, steps could be taken to facilitate the service recovery before landing perhaps expediting the final stages of the flying experience further enriching the recovery efforts. I would imagine that the capability to do this exists in most modern airlines, but little along these lines are attempted.

More on Queuing: Disney World Edition

2011-01-17T17:41:00.000-05:00

I recently had a discussion with my wife while waiting in a long queue at a wedding reception about queue management. One thing I found out is that I have been saying "balking" wrong (pronounced "bawking" like a chicken - no 'l'). We discussed ways that the bride and groom could have managed the line different to make the time pass a bit better, like more pictures and stories to see about the bride and groom, maybe a sign saying "expect 10 minutes from here", fast pass given to special guests, etc.

Here was an interesting New York Times article I stumbled on with some things that Disney does (hat tip Design For Service). It is good article about taking queue management to an extreme and is worth a read. Here are some excerpts:

In one corner, employees watch flat-screen televisions that depict various attractions in green, yellow and red outlines, with the colors representing wait-time gradations.

If Pirates of the Caribbean, the ride that sends people on a spirited voyage through the Spanish Main, suddenly blinks from green to yellow, the center might respond by alerting managers to launch more boats.

Another option involves dispatching Captain Jack Sparrow or Goofy or one of their pals to the queue to entertain people as they wait.

The following sounds like revenue or demand management applied to queuing:

What if Fantasyland is swamped with people but adjacent Tomorrowland has plenty of elbow room? The operations center can route a miniparade called “Move it! Shake it! Celebrate It!” into the less-populated pocket to siphon guests in that direction.

Behind-the-scenes systems — typically kept top secret by the company as it strives to create an environment where things happen as if by magic — are also highly computerized. Ride capacity is determined in part by analyzing hotel reservations, flight bookings and historic attendance data. Satellites provide minute-by-minute weather analysis.

Queuing theory explained well

2011-01-16T21:41:00.000-05:00

A bit delayed, but I thought this was a good video explaining some principles of queuing:

More thoughts on operational capabilities vs. experience design

2010-11-12T11:04:00.005-05:00

From marketing guru Seth Godin's blog post today:

It used to be that if you wanted to build an organization, you had to be prepared to do a lot of manufacturing and assembly--of something. ...

Restaurants used to be built by chefs. Now, more than ever, they're built by impresarios who know how to tie together real estate, promotion, service and chefs into a package that consumers want to buy. The difficult part isn't installing the stove, the difficult (and scarce) part is telling a story.

I'm talking about intentionally building a structure and a strategy and a position, not focusing your energy on the mechanics, because mechanics alone are insufficient. Just as you can't build a class A office building with nothing but a skilled carpenter, you can't build a business for the ages that merely puts widgets into boxes.

Mr. Godin's thoughts are expressed in a different way, but I think the message is similar to a post I had yesterday. Let's start to flush this idea out a bit more by creating a classic 2 by two matrix with experience design capabilities on one axis (low to high) and operational capabilities on the other. Something like this:

So now what? Well, I imagine the the high/high quadrant is a good place to be, but it implies high costs, but also high quality and value - think Disney. The low/low quadrant on the other hand is low service and low value, low costs - think vending machines. It is interesting to think about the possibilities of the the other two quadrants. For high operational capabilities, but low experience think traditional fast food with factory like precision, but very little emotional experience. This quadrant has probably been well tread and is what most traditional operations management people consider when thinking about improving a service. Low operational capabilities but high experience design may lead to a service full of emotional stimulus, but with the risk of service failure lurking around since there is no operational backbone to support the experience.

Still working through this idea and wondering if it is of any value when considering service strategy? I think we could find examples of service firms trying to shift their offering into a different quadrant, for example McDonald's with a major redesign of store and Starbuck's pulling on the reins of their baristas operational efficiency .

I'm interested in hearing what you think about the idea.

Learning Service Management through Sesame Street: Accommodation Strategy

2010-11-11T20:27:00.000-05:00

I'm still a pretty slow learner and Sesame Street is at about the right level for me:

I watched this video with my son tonight and it reminded me of the HBR article titled "Breaking the Trade-Off Between Efficiency and Service" by Francis Frei. Professor Frei brings up the librarians problem, mainly that sometimes customers might want something that is not usually offered (um num num..cookies...) and service providers have to make a choice to accommodate or not. She argues that services that choose to accommodate special requests have higher levels of perceived service experience, but also have higher costs. She encourages service providers to think about different types of customer induced variance when trying to create an accommodation strategy.

The library, for example, is a pretty low accommodation service, but how could it maintain its low cost while adding a degree of accommodation? One way would be to create a self-service option that could provide some cookies in the library (vending machine). Another way would be to outsource some cookie production to another service provider that has the capabilities of producing cookies at a low cost. Finally, the library could maintain its "books only" policy by, as Frie puts it, "limiting the service breadth." I read that as meaning create a service process for which customers will not ask for special accommodation. In the case of the library maybe these means switch completely to e-books - if Cookie Monster still wants a cookie, send him am electronic tracking cookie...

This post was brought to you by the letters C and A and the number 4.

Huge Restaurants: Trade off between Factory thinking and Experience thinking

2010-11-11T15:18:00.000-05:00

Two recent articles in WSJ have pointed out some operations of mega restaurants - both are worth investigating. The first is from the largest restaurant in the world in Damascus. Here is the video:

After watching the video, operations management folks like myself get a bit excited to think about the shear planning and organizing it takes to produce and deliver so much food every night. The kitchen essentially becomes an efficient factory and the head chef like a plant manager.

The next article is about the Tao in Las Vegas, sorry no video, but here a couple of pictures and quotes:

Seconds count because Tao's kitchen serves 1,400 dinners on a typical Saturday night, making it one of the busiest high-end restaurants in the country. While partially cooking dishes in advance isn't unusual in restaurant kitchens, doing so with quick-cooking fish is. That's one way Tao is able to keep the plates moving fast enough to get its legions of diners fed

click to see full size

Although it is only open for dinner, Tao operates 24 hours a day, preparing Chinese, Japanese and Thai-influenced cuisine. On Saturdays, the busiest day, the restaurant employs 57 cooks, eight chefs, 26 servers and 10 hostesses. It goes through 1,400 pairs of chopsticks, 50 pounds of rice and three gallons of Heinz ketchup—a key component of its kung pao sauce. A four-person set-up team folds 1,800 napkins, stocks bars with lemon, lime and apple slices and prepares Tao's over-the-top (think 20-foot-tall Buddha statue) dining room for the night, including lighting 269 candles. One employee does nothing but sweep for his eight-hour shift.

"In Las Vegas, everybody is looking for the big experience," says Rich Wolf, co-owner of the Tao Group, which owns Tao Las Vegas, 11 other restaurants and seven nightclubs in New York and Las Vegas. "It isn't your first thought for a quiet, intimate date," but it's where "people can go to when they want to be festive and celebrate and paint the town red."

The restaurant is part of a 60,000-square-foot complex that also includes a lounge, the popular nightclub and Tao Beach, an outdoor club (closed in winter) with a dance floor, pool and cabanas that offer food, drink and massages. Tao's strategy is to keep people under its roof, and spending money, all night long. Dinner is treated like a pre-party for the wilder antics upstairs at the nightclub. On a recent evening, two barely-clad models hired by Tao frolicked in a rose-petal-filled bathtub near the dance floor.

I suggest reading the entire article - it is fun to get a glimpse at how they do what they do.

I was struck, however, at the contrast between these two examples. The first Damascus video was nearly entirely focused on the operational execution that needs to take place every night - chopping, prepping, ordering, inventory, etc. The article about the Tao also spent considerable time on the topics of inventory, receiving, and food production, but on the other hand it emphasized the work that is put into creating experiences, for example:

By 10 a.m., the four set-up staff started preparing the dining room. One employee donned a harness and ropes to scale the 24-foot-high red wall and place rechargeable lights in the 48 candles highlighting the Buddha that rises above a pool filled with swimming Japanese carp. A representative from the Venetian hotel's floral department replaced the rose petals that filled the eight tubs dramatically lining the entrance to the restaurant.

I have no way of knowing if the Damsus restaurant does not spend similar resources on experience creation, but I think the contrast is interesting. One one hand, the factory approach is essential to ensuring consitent quality and delivery of food and the food certainly influences the experience. But, the experience must also consist of more than just the food and the Tao understands that well.

It is interesting to think about what the right mix of factory/production thinking and experience design thinking is right for specific service and how much resources should companies place in each area. I suppose it comes down to where the value is being created - is it the output of the kitchen (factory) or the atmosphere and experience of the dinning area. How much weight do customers put on each aspect? If a service designer is too biased toward one side or the other (factory vs experience thinking) what will happen?

Transparency at the post office

2010-11-01T15:30:00.001-04:00

Customer view - additional computer screen for customers to see what the server is doing on her screen. As seen at Cornell Post Office - picture taken by permission.

I saw this computer screen at the post office a couple of weeks ago and thought it was interesting. It allows customers a view of what the server is doing on her computer screen. It is nothing more than a duplicate screen of what the server sees, but I thought it was a good example of process transparency. It also forces the process to be simple enough that a lay customer can understand what is going on. Additionally, it allows customers to check on what's going on - am I getting charged for something I didn't want - and begins the training of customers on a self service option.

In general, most would say that transparency is a good thing. But when I asked the postal workers what thy thought if it they grumbled a bit and said they were not impressed by it. They said it often didn't work and that they had to shut it down when they were logging in. It sounds like it just added additional work for the servers. Unsaid, but a bit implied was that it gave customers a bit too much of a feeling of control, that is, I assume customers might start questioning a bit what is going on, especially if servers hurry through screens. So it might actually slow down the process if customers are able to see it.

So, is it the right thing to do? Under what conditions does added transparency work? Under what conditions might it harm things?

On a separate note, I was impressed by this offering:

This is a prepackaged, ready to send gift in the line at the post office. Think about it, if you are waiting in line at the post office to send your cousins and nephews and nieces all their Christmas gifts and you still have one gift left to get and suddenly a reasonably priced Christmas classic dvd appears in front of you ready to ship - talk about impulse buy!

Healthcare links

2010-10-26T20:47:00.001-04:00

The pros and cons of ER posting wait times
A bit more in depth, but along the same lines of my earlier post here.

So these break down along the lines of people may be stupid and caregivers may be given bad incentives. On the former, the concern is that people will opt for long drives or stay home because they are overly sensitive to waits. While I generally believe that it is never good to underestimate stupidity, this seems a bit much. As I said above, I am not sure that I would think to look at a Twitter feed when faced with a medical emergency. That is certainly clear if the emergency involved, say, chest pains. This really is about sprained vs broken ankles so this concern seems overstated.

Operations Management at the Dr.'s Office

What is interesting is that a number of the approaches the article highlights are pretty basic recommendations from the OM tool box. For example, shifting work to less expensive staff (e.g., having nurses give flu shots) is simply moving work from the bottleneck to less constrained resources. Having patients complete registration before arriving at the clinic or reducing unnecessary follow ups are examples of moving activities off the critical path or eliminating non-value added work

Vaccines – producing more by starting sooner

The idea behind the new technology is to do some pre-processing. Novartis will “develop a bank of synthetically constructed seed viruses ready to go into production as soon as the WHO identifies the flu strains”. In short, they will artificially create a bunch of potential viruses in the hope that one of them will turn out to be the useful one for production.

What will this extra time give them? The biggest advantage seems to be additional capacity. If a facility can make X doses per week, then adding 4 weeks to the schedule means 4x more doses for the season, pretty much with the same overhead as before.

No Company Can Rest on Previous Reputation for Quality and Responsiveness

Johnson & Johnson's recent battle with quality issues:

J&J and its McNeill unit has had a rather difficult two years, and a sweeping look at all manufacturing and perhaps supply chain processes is the right move. An overall revamping of all manufacturing operations is underway, including a new czar of manufacturing with an associated task team with sweeping organizational powers across all of J&J’s operating groups. The FDA also indicates that J&J faces additional close scrutiny and inspection by that agency. But the damage remains in millions of lost sales to date, over $100 million to upgrade McNeill’s plants, and uncertain consumer perceptions regarding brands.

Yet another well-run company with a stellar reputation for quality could not overcome a series of multiple back-to-back incidents relating to its process design and quality control processes. A compounding slow response and untimely or ineffective response by senior management was also evident.

Annoying Dentists or The irrational way we interact with Dentists

Dentistry is basically the unpleasant experience. They poke in your mouth. It's uncomfortable. It's painful. It's unpleasant. You have to keep your mouth open. And I think all of this pain actually causes cognitive dissonance - and cause higher loyalty to your dentist. Because who wants to go through this pain and say, I'm not sure if I did it for the right reason. I'm not sure this is the right guy.

So you can imagine that at some point in your dental treatment, you have a choice between things that have the same possible outcome, but one of them is more expensive to you and better financially for the dentist. Which one would you choose, and how the duration of relationship be affecting that?

And it turns out that the more time people have seen the same dentist, the more likely the decision is going to go in favor of the dentist. People are going to go for the treatment that is more expensive but has the same outcome. More out of pocket for them, more money for the doctor. So in this case, loyalty actually creates more benefit for the dentists.

And in other news: McDonald's is taking over the world (or at least the news)

2010-10-19T22:08:00.001-04:00

From Fast Company: McDonald's experience design of the future:

The next phase, McDonald's execs say, depends on design. "People eat with their eyes first," says president and COO Don Thompson. "If you have a restaurant that is appealing, contemporary, and relevant both from the street and interior, the food tastes better.

As the younger generation starts to see McDonald's as a place you go to eat instead of just picking up food, you could very well change their behavior for years to come," says Darren Tristano of restaurant consultancy Technomic. "The next step," he says, "is to draw people in for a dining experience."

As previously discussed about Starbucks:

"How do you increase service speed and efficiency and optimize the customer experience at the same time?"

Line of interaction

"If Martians came to Earth and visited a McDonald's, a post office, and a bank, they wouldn't be able to tell the difference. They would just see that everything starts with a line, has a counter that acts as a divider where the money exchanges, and has something hidden going on way in the back."

On technology innovations (self service):

A few minutes later, the mother and son try a prototype of a self-ordering kiosk. "Oh, you already know what you are ordering," Karen exclaims, when Joey starts interacting with it like a video game. "The mom and son shared a moment while looking over that menu," he says. "And the kid obviously felt empowered by the kiosk. It gives customers more control and makes it easier to make decisions. Those are the directions we might want to explore."

On integrating design into operations:

""We don't design in a vacuum here. If an idea doesn't come alive in the restaurant, it doesn't work. Once you can see it," Weil says, "you can show it to an operations person and they can see the differences and they usually get it." And if they don't? "Repeat often," he says. "This is the only way to line up what we are doing with our business needs."

On experience design (old post on oatmeal here):

Weil has restored some live entertainment value by positioning McCafé barista stands next to the registers. Customers can view their drinks made with traditional espresso machines that pull fresh shots and steamed milk on demand -- just the way Starbucks used to do before it got too big. At breakfast, employees must stir a cup of oatmeal a minimum of 12 times before serving it to the customer, both to mix the ingredients properly and to signal homemade goodness.

On queuing or wait perception:

Weil and his team have a patent pending on a design that adds an additional window for people with enormous orders. The drive-through of the renovated Kearney store, a rural outpost just past Kansas City's suburbs, features two lanes of cars lined up at two different ordering kiosks. This rejiggered drive-through isn't going to find its way into MoMA, but functionally, it's genius: It consolidates the traffic around the restaurant so everything appears much less gridlocked.

And finally, on sequence:

Rather than the usual swinging gate in front of the trash bin, this one is open faced with a slimmer, oval-shaped slot that still seems to shield customers from an unpleasant view or smell. He leans over and slides his trash off the tray and into the receptacle. This is the last step in the customer experience. "It always took two hands to operate," he says, one to hold the gate open and one to fumble with the tray. "I wanted it to be quick and easy, to leave the customer with a good impression as they leave."

In other news, from CNN: Weddings at McDonald's or "Can you hear the fry bells ringing? Would you like an apple pie-cake with that?"

The package has all the details to attract a wedding banquet cynic or a Golden Arches obsessive: a baked apple pie wedding cake, dress made out of party balloons, kiddie party favors for guests, and of course, catering by McDonald’s.

In still other news, McDonald's is the winner in the Cornell Hospitality Research in Practice Award competition

McDonald's has evolved its menu many times over the years, basing their modifications on customers' preferences and tastes. Their strategic plan to enter the beverage market space was no exception. Since the coffee market space was already crowded, McDonald's developed its McCafé Beverage Program by methodically testing all products in three different ways. Every product had to pass customer taste tests, operations testing, and market analysis.

And some older McDonald's related links:

Photo of isolated seating in Japan

Smooth supply chain Smoothie roll out

hat tip: Tyler Cowen

Can you get too lean, be too fast?: The Starbucks Experience at risk

2010-10-15T16:21:00.000-04:00

Although I am not a coffee drinker (if you are interested -here's why), I found the recent article in the WSJ very interesting. It is about the direction that Starbucks is taking its processes. A while back Starbucks tried to take ideas from lean manufacturing trying to find ways to shave seconds off their service process. Here is an example from the article of the things they found:

That team discovered that many stores kept beans below the counter, leading baristas to waste time bending over to scoop beans, so those stores ended up storing the beans in bins on the top of the counter.

Although So, that sounds great except that it turned out that baristas seemed to get a bit too efficient at the expense of their core product:

Amid customer complaints that the Seattle-based coffee chain has reduced the fine art of coffee making to a mechanized process with all the romance of an assembly line, Starbucks baristas are being told to stop making multiple drinks at the same time and focus instead on no more than two drinks at a time—starting a second one while finishing the first, according to company documents reviewed recently by The Wall Street Journal.

The WSJ article makes it sound like Starbucks is making the changes for the sake of product quality, mainly that by working on too many drinks at a time, drink quality goes down. This could be the case if each drink may take slightly longer than if it was worked in isolation. It seems baristas don't buy the time saving part, they claim that the new policies will make things slower. One of my favorite lines in the article:

When asked whether changes have created longer lines in the test markets, Starbucks spokeswoman Ms. Smith said she didn't have "that level of detail."

Hmmm, pretty sure that means either, we didn't think of that (unlikely) or "well, yes, but it will be better for the customer." Will it?

Quality might also be reduced in multi-drink-proccessing because each drink has its own process unique from the one before and after making mistakes more likely. So, the new policies are acting as a sort of mistake proofing, poke-yoke if you will. This may insult the multitasking capabilities of the baristas, again a tough sale.

So, where does this bring us? Is it better for a process to be faster with a slightly higher risk of mistakes and un-freshness or should baristas be told to slow down at the sake of longer queues? This is not an easy question to answer, hence(in my opinion) the more interesting problems that arise in service operations.

My opinion is that Starbucks has seemed to find a paradox: applying operations management principles directly into a service process might impact the customers experience. If asked what makes service operations management different from manufacturing operations a good answer would be that services involve customers in the process - you have to consider what they do and what they think about what you do. For traditional manufactured products, customers don't particularly care about how a product is made apart from that it has the features and quality that they expect.

Starbucks barristas seemed to be forgetting that they are in the service business. If they were making coffee in a bottling plant then efficiency is the best principle, but because customers are in front of them seeing and experiencing (and paying a hefty price for) the process of making their drink they may need to emphasize something different:

To boost the freshness of the coffee and to bring back some of the "theater" that had been lost, the baristas also started grinding beans for each batch of coffee, instead of grinding the day's beans in the morning

Starbucks sells more than the liquid in the cup, it is in the business of the experience of the "fine art of coffee making" (at least it used to), but because of its popularity and high demand it has transformed into a service factory - spitting out drinks as fast as possible. The danger is that it is losing its hard fought brand promise.

So, what would you do if you were Starbucks management? How do you handle the barristas fear that lines will get longer? Who do you side with - baristas, customers, management? What are the needs and concerns of each of these groups? How are these needs and concerns out of balance and how can you align them?

The future of...

2010-10-11T11:01:00.000-04:00

Self Service ATMs

The Future of Self-Service Banking from IDEO on Vimeo.

Book reading as an experience (It is all pretty cool, but the I especially found "Alice" interesting, starting at 3:10)

The Future of the Book. from IDEO on Vimeo.

The bathroom (an example of self service failure...)

bathroom of the future from Mike Merrill on Vimeo.

Retail Checkout (this is a bit old and maybe we should be there by now..)

Retail Experience of the Future from Mike Wittenstein on Vimeo.

Random Links

2010-10-09T08:04:00.000-04:00

Is it staged or is it not, who cares Cebu Airline flight attendants jam in the aisles: read more here

Is Mexico City really this cool or is this a case of letting photographers create unrealistic expectations.

Is China posed to take on outsourced services

From Forbes :

China’s scale--and the number of potential outsourcing cities and service providers to choose from--offers huge opportunity for the market ahead of its competitor nations. Organizations are able to source multiple suppliers within one country, which reduces their dependence on a single location or supplier. It has a large domestic market, a government that invests heavily in infrastructure and a large pool of graduates that form the workforce. It offers good logistics operations, in addition to competitive wages. It does now need to shift from manufacturing into services, in order to maintain its competitive edge. Its main consumers in Europe and the US are purchasing less and this means their importance to China will lessen as its economy continues to expand. There will be less opportunity to sell its goods to overseas markets. This will equate to steady volume growth, while margins continue to fall and investment in factories and equipment will decline. Hence the need to shift its focus to services.

How is healthcare like pizza?

2010-10-06T12:56:00.002-04:00

I stumbled onto this (I think I clicked an ad on accident), but found it pretty interesting:

The very first line is what hooked me:

Even my pizza place stores my information digitally, so why do I have to fill out the same medical forms over and over?

The numbers on everyone are little freaky, but the idea is worthwhile considering. Think about why the pizza place stores your information? One of my first jobs during high school days was at Papa John's Pizza. At one time I won the fastest dough slapping contest in the state Utah - there was only one store in Utah at the time, but I digress. We opened the first Papa Johns in the state of Utah, so when we first opened taking orders over the phone usually meant taking the time to get all the information from customers: name, address, phone number, etc. Order taking was a slow process and it required lots of people on the phone and queues built up fairly quickly. Often the bottleneck was the order taking process and not the pizza making, the dough slapper and pizza assembly workers would often look over the shoulders of the order takers and get a head start on making the pizza. After several months - maybe even a year - the store had developed a healthy database of most of regular customers that called in and ordered. Order takers just had to confirm customer's information and could even ask if they wanted the same thing they ordered last time. Now the bottleneck shifted to pizza making and delivery - the actual value added parts of the service. We needed less people to handle phones and customers got their food faster.

So how does this apply in a health care system? Apart from no longer annoying customers with endless forms to fill out, a data driven approach to patient health records certainly will have the same effect, mainly that a bottleneck and resource hog that used to be the check-in process can be shifted to a more value-added process like, I don't know, actual health care. Additionally, doctors should be able to review quickly the history of patients without having to rely on the patients memory.

Poke around on United Healthcare's new Numbers site and tell me what you think.

Boeing as a service provider: W.P. Carey's Center for Services Leadership

2010-09-30T13:25:00.000-04:00

A couple of my favorite quotes:

"Services are just very hard to get your head wrapped around," says Gravell. "Sometimes you can lose the big picture of what you're doing with them. It's more complex than the product side -- not from a technical standpoint, but from a value-creation and customer service standpoint."

And

The Boeing of today has its field service reps providing tech expertise not only to new customers rolling out new platforms or new product, but also to old customers managing mature platforms. The company is constantly seeking new ways to keep its clients and make their operations more manageable. The goal, Shaheen says, is to ensure that the Boeing customer experience is positive, consistent and reliable.

Read the rest here.

There is a growing interest among academics to understand this transition from a pure manufacturing role to one of service, sometimes called servitization, the idea that manufacturers transition into being service providers. The difficulty is the experience part, as said in the article in needs to be positive, consistent and reliable. I'm certain we will hear more about it.