New Service design

❑ Customers do not simply buy elements of services, but

look for much greater and intangible experience

- Educational experiences vs.

lectures/food/accommodation/books

❑ Service organizations need to create a central

theme/organizing idea
New Service design – Central theme
Service “A store selling paints, tools and other
organization
items for home improvement”

“Enabling the
Organizing “Providing the cheapest customers to carry out
idea/Central
theme
hardware in town” high-quality home
improvements”
“Investment in skilled
Operational “No sales staff to provide
implications frills/Efficiency/Economy” guidance to carryout do-
it-yourself (DIY) projects
Are these enough? (Service organization vs.
Customers)
New Service Design – Service concept
Service organization: NayaRaipur theme park

Organizing idea: A great day out at the theme park

Service concept (summary): A theme park providing an

inclusive package of over 100 rides and attractions to suit all
ages and tastes with thrills, fun, fantasy, historic heritage and
magnificent gardens

Service experience Service outcomes

Service operations Service value

Service experience
o Quick and easy to buy ticket
o Exhilarating and entertaining
o Fun and lively for all ages
o Range of attractions

Customers’ direct experience of service offering

Service outcome
o Great day out
o Never a dull moment
o Thrilling rides
o Exhausting

The result for the customer of the service

Service Operations
o Good signage to the park areas
o Large parking
o Clear site maps
o Efficient queuing system
The way in which service would be delivered

Service value
• All inclusive price
• Value for money
• Car parking included in ticket
• Additional costs only for food

The benefits the customers perceive weighed against cost

of the service
 Why?
• Helps in generating Detailed process design and
performance indicators and aligns marketing and
operations.
• If not updated regularly, we cannot measure gap
between service expectation and outcomes,
changing customer preferences.
• Fall into trap of provider mentality – whatever
contractor is providing is good and it must be
good. In service concept gives detailed and
updated regularly.
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Exercise
Service organization: IIT Bhilai

Organizing idea:??

Service concept (summary): ??

Service experience Service outcomes

?? ??

Service operations Service value

?? ??

▪ Service concept need to be well defined

• Oraganising idea need to be as crip and
precise as possible so as to ensure no
vagueness in understanding by stakeholders.
• Based on organizing idea, all the 4 factors
have to be modified
• It is part of front end of services design

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Service concept
In what ways the establishing service concept is helpful?

❑ Mechanism that links both operations and marketing

❑ Regular reviews to help prevent service organizations

slipping into “Provider mentality”
- Service providers’ thinking that customers love us since
we know what we provide is good.
Operational elements of New Service Design

Revenue and yield

Delivery planning
management

Service System
Design

Ensuring service Facility design and

quality location decisions
Delivery planning (Planning & Scheduling in Airline
industry)

❑ Integrated nature of the problem

❑ Safety and regulatory issues

❑ Lots of interaction amongst variables

Challenges

• Planning process in airline industry is a very

complicated process due to:
– Numerous airport location with different restrictions
– Different aircraft types with different operational
characteristics
– Crew scheduling and regulations
– Large sized integrated problem
Typical objective in schedule design
Aircraft type “f”
Flight leg “l”
CAPf = Capacity of aircraft type “f”
Dl = Demand of flight leg “l”
OPCOSTl,f = Operating cost of aircraft type “f” for
flight leg “l”

FAREl = Fare of flight leg “l”

Profitability of flight leg ‘’l” associated

with a particular aircraft “f”?
A typical flight scheduling problem
An airline need to assign its crew to cover all its upcoming flights. The
airlines has three set of crews that need to be allocated to three feasible
sequence of flights (out of total 12 feasible flight sequences) in such a
way that there should be all atleast one flight for one route. What
should the airline do?
15
Ai/(2Bi) + c/2

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