Once the service package is specified, operations is ready to make decisions concerning the factors of process, capacity, quality, inventory, supply chain and information systems. These are the six decision responsibilities of service operations.
Processes
A service delivery process consists of all the routines, tasks and steps that are used to deliver service to clients along with the jobs and training for service employees which are needed to deliver services appropriately. There are many ways to organise a process to provide client service in an effective and efficient manner to deliver the service.
The design ( and r e- design) of service delivery processes is an extremely im- portant task in public services. It is human resources coupled with facilitating goods ( see below) which are utilised in the defined process to deliver public ser- vices. Thus, process design will have major implications for service effectiveness, client satisfaction and resource efficiency. However, service processes in public service organisations may vary enormously between delivery organisations for the same service. While there may sometimes be good reasons for this, other times there may not be a justification. In some public service organisations, ser- vices processes may be reviewed and refined periodically, while in others they
CHAPTER 2 Operations management of public services 23
may remain unchanged for years. In a time of austerity, the review and re-design of such processes may often be the key to improvements.
In undertaking process design ( or re- design), it is important to consider the degree of client contact and how that contact should be facilitated. Chase and Tansik ( 1983) argued that high client contact processes should be designed and managed differently from low- contact processes. High- contact processes have the client in the system while providing the service. This can lead to difficulties in standardising the service or inefficiencies when the client makes demands or expects unique services. On the other hand, high- contact processes also pro- vide the possibility of s elf- service where customers provide part of the service themselves ( e.g. patient self- testing for some medical conditions, self- learning in schools and colleges). L ow- contact services are performed away from the client
CASE STUDY 2.1
Re- designing public services
Employment services
The Ministry of Employment was looking to reform and re- design a number of existing employment services with the aim of introducing radically new ways of dealing with long- term unemployment and vulnerable citizens. One of the main elements has been to create a shift from a focus on activity to a focus on outcomes for citizens.
This has been done by exploring how to invest in creating positive change in the citizens’ situations through interdisciplinary collaboration and greater professional freedom in case processing. Initially, they began a process of merging development and implementation exploring how employment processes really worked for citizens, in job centres and in the everyday practice of frontline staff.
They then used this research to engage national decision- makers and local practitioners in collectively analysing insights, co- creating new ideas and co- designing a number of activities in order to productively put the new reforms into practice. The project has since evolved into a situation where human- centred design is being applied and experimented with in other phases of the policymaking cycle.
This is resulting in various new ways of connecting policy and practice including mandatory placements for policymakers alongside local case workers, and practice- oriented preventive units focusing on quick adaptation of failing reforms.
Key to this process was a consideration of the costs of change and the ongoing costs of delivery to be compared with the benefits and outcomes to be derived from the changes.
Drawn from the work of Nesta Ideo:Design for Europe – Designing public services
in what is often called “ the back room.” In this case, the service process can be more standardised and efficient since the client is not in the system to request preferences, customisation or changes. An example here might be paying coun- cil tax online.
Lean thinking can also be applied to process design, the time taken for each step in a service flowchart can be recorded and/ or a separate value- stream map can be constructed. Then the process can be analysed for time reductions to reduce waiting and n on- value- added steps. Changes can be made to reduce time and waste in the process. Waste is anything that does not add value to the process including waiting time in line, unrequired steps, client confusion and defects in service. Leite and Vieira ( 2015) suggest that service managers must re- alise that the client will be happy if the service provided meets or exceeds expec- tations. In addition, the interaction between the client and the people providing the service is essential to achieve satisfied customers. Employee involvement is often emphasised as part of lean thinking to achieve high levels of commitment by service employees.
Capacity management
Public services, like all organisations, have limited physical and human capacity.
While capacity may be increased in the longer term, it is often largely fixed in the short to medium term. Hence, the management of capacity is a key aspect of operations management in many public services.
Forecasting service demand is a prerequisite for managing capacity. In some cases, traditional time series methods can be used to predict trends and seasonal- ity in client demand. Future demand is forecast based on past demand patterns.
Many of the same time series and statistical methods for forecasting can be used for manufacturing or service operations including public services. Examples here might be forecasting the demand for hospital care in winter among elderly peo- ple or forecasting the likely prevalence of road accidents at different points in the year. These traditional forecasting techniques have limitations, and, in future, the forecasting of client demand may increasingly make use of big data analytics ( BDA) to make forecasts. The use of BDA is discussed further in Chapter 13.
Capacity planning is quite different between manufacturing and services given that service cannot be stored or transported to another location. As a result, location of services often ( but not always) has to be near the client. Cus- tomers are only willing to travel short distances to receive most public services.
Exceptions might be healthcare when the illness requires a specialist and other services where local expertise is not available.
Services ( including public services) show variations in client demand over time, and a major operational problem is how to meet peak demand at any point in time. Service capacity is perishable and cannot be stored and used later.
However, it is completely uneconomic to provide resources ( physical or human) to meet peak demand since for most of the time much of those resources will be under- utilised. Hence, two other approaches might be employed:
• Find mechanisms to try reduce peak demand by some form of mitigating activities
CHAPTER 2 Operations management of public services 25
• Top up existing capacity by a combination of approaches such as
• Use of agency staff
• Overtime
• Sub-contracting
• Hire of equipment, etc.
While some of these same mechanisms are used in manufacturing, they are much more crucial in service operations. However, the current coronavirus pan- demic illustrates the problems with this. The impact of the pandemic meant that the demand in hospitals for Intensive Therapy Unit (ITU) beds and ventilators exceeded normal operating requirements by many hundreds of percent. Urgent actions were taken to procure more capacity but once the pandemic subsides, much of this capacity may be redundant and have to be mothballed. The key task in future will be to reconsider what constitutes peak demand.
Scheduling also has some differences between manufacturing and service.
In manufacturing, jobs are scheduled through a factory to sequence them in the best order to meet due dates and reduce costs. In services, clients are being scheduled. As a result, waiting time becomes much more critical. While man- ufacturing orders don’t mind waiting in line or waiting in inventory, real life clients do mind. Some of the scheduling applications for services are scheduling of patients to operating rooms in hospitals and scheduling students to classes.
Many scheduling problems have been solved by using operations research meth- ods to optimise the schedule.
Quality management
Quality management practices for services have much in common with manu- facturing, despite the fact that the product is intangible. Various approaches are available and are widely used for services. These approaches have several things in common. They begin with defining and measuring the client’s needs. Any ser- vice that does not meet a client’s need can be thought of as a defect. Then these approaches seek to reduce defects through statistical methods, c ause- a nd- effect analysis, problem- solving teams and involvement of employees. They focus on improving the processes that underlie production of the service.
In addition to intangibility, two approaches about quality are unique to service operations management.
• Service recovery. For manufactured products, quality problems are han- dled through warranties, returns and repair after the product is delivered.
In high- contact services there is no time to fix quality problems later;
they must be handled by service recovery as the service is delivered. For example, if soup is spilled on the client in a restaurant, the waiter might apologise, offer to pay to have the suit cleaned and provide a free meal. If a hotel room is not ready when promised, the staff could apologise, offer to store the client’s luggage or provide an upgraded room. Service recov- ery is intended to fix the problem on the spot and go even further to offer the client some form of consolation and compensation. The objective is to make the client satisfied with the situation, even though there was a service
failure. Ideally, such arrangements are also needed in public services but may not always be provided. It is a debatable point as to how easy it would be to make an immediate recovery of such defects in public services but it should be considered.
• Service guarantee. A service guarantee is similar to a manufacturing guar- antee, except the service cannot be returned. A service guarantee provides a specific reward for failure of service delivery. Some examples are as follows:
• Your package will be delivered by the time promised or you will not pay.
• We will fix your automobile or give you £100 if you must bring it back for repair.
• Customers who are not satisfied with their haircut get the next haircut free.
Service guarantees serve to assure the client of quality, and they provide a way for the employees to know the cost of service failure. Again, such arrangements may not always be provided in public services, and it may be difficult to do so in all cases.