PCN Diagrams: A new tool for service design and innovation

Transcription

1 PCN Diagrams: A new tool for service design and innovation Dr. Scott E. Sampson Passey Professor of Business Management and Service Operations Brigham Young University Provo, Utah, USA rev 6/11/2011 BYU Business Management Department Seminar (August 20, 2010) London Service Science Forum (September 16, 2010) Bath, UK EurOMA Service OM Forum (September 20-21, 2010) Cambridge International Manufacturing Management Symposium (September 24, 2010) San Diego Decision Sciences Institute Meeting (November 23, 2010) Sampson PCN Diagrams Paul Dishman, Ph.D.

2 Outline 1. Problems with service design and innovation 2. Tools for service design 3. Service strategy and innovation Sampson PCN Diagrams

3 1. Problems with service design and innovation Sampson PCN Diagrams

4 Experts say innovation in services is less disciplined and less creative than in the manufacturing and technology sectors. A recent comprehensive review of the academic literature on product innovation also reveals little explicit coverage of research on service innovation. lack of widespread and disciplined innovation in services derives at least partially from the nature of services themselves. Source: Bitner, M. J., Ostrom, A. L., and Morgan, F. N. (2008). Service blueprinting: A practical technique for service innovation. California Management Review, 50(3), Sampson PCN Diagrams

5 Service design and innovation sucks! The design of new services remains among the least studied and understood topics in the service management literature despite the plethora of rigorous research and models on product ment, especially in recent years. (Menor, Tatikonda, and Sampson 2002) Design and innovation: Who, Where, and What Sampson PCN Diagrams

6 2. Tools for service design Sampson PCN Diagrams

7 Service design tools Services are processes Process design tools: 1. Process Flowcharts 2. Service Blueprints 3. Supply Chain Diagrams 4. Process-Chain-Network Diagrams Sampson PCN Diagrams

8 Tool 4. Process-Chain-Network (PCN) Diagrams a new tool document processes documents s documents networks facilitates strategy and innovation Sampson PCN Diagrams

9 Process Chains Sampson PCN Diagrams

10 What is a process? Sequence of dependent steps Sampson PCN Diagrams

11 What is a process? Sequence of dependent steps negotiate supply contract identify ingredients recipes receive order online forecast supply needs preheat ovens maintain cook take order serve Sampson PCN Diagrams

12 What is a process? Sequence of dependent steps Process Step (action verb and object noun) Precedence relationship (implies a required resource state) negotiate supply contract identify ingredients recipes receive order online forecast supply needs preheat ovens maintain cook take order serve Sampson PCN Diagrams

13 Process Entity Entity Entity s Process Domain An entity s Process Domain includes all processes that are directly performed by the entity. Sampson PCN Diagrams

14 Process Entity example Pizza Restaurant Restaurant s Process Domain Sampson PCN Diagrams

15 Process Entity example Pizza Restaurant Restaurant s Process Domain negotiate supply contract identify ingredients recipes receive order online forecast supply needs preheat ovens maintain cook take order serve Sampson PCN Diagrams

16 Three regions of a Process Domain Pizza Restaurant Restaurant s Process Domain (e.g. with supplier) (e.g. acting on supplier resources) Independent processing (entity acting on entity s owned/controlled resources) (e.g. acting on customer resources) (e.g. with customer) negotiate supply contract identify ingredients recipes receive order online forecast supply needs preheat ovens maintain cook take order serve Sampson PCN Diagrams

17 Three regions of a Process Domain Pizza Restaurant Restaurant s Process Domain Independent processing negotiate supply contract identify ingredients recipes receive order online forecast supply needs preheat ovens maintain cook take order serve Sampson PCN Diagrams

18 Three regions of a Process Domain 1. Interaction Entity person acting in conjunction with another entity person. People with people. 2. Interaction Entity person acting on/with resource(s) of another entity. People with things (belongings, information). 3. Independent Processing Entity acting only on/with entity s own resources. Sampson PCN Diagrams

19 Three regions of a Process Domain 1. Interaction Entity person acting in conjunction with another entity person. People with people. 2. Interaction Entity person acting on/with resource(s) of another entity. People with things (belongings, information). 3. Independent Processing Entity acting only on/with entity s own resources. Underlying assumptions: People are process initiators ( operant resources ). Things (belongings, information) are objects of processing ( operand resources ). Limitations: No representation of things autonomously acting on things. automatic car wash? auto bill-pay? Questions the existence of things acting on people (versus people using things to act on themselves). Sampson PCN Diagrams

20 Process Chain Networks Sampson PCN Diagrams

21 What is a Process Chain Network? a network of interdependent process chains that span multiple process entities. entity process domain entity processes entity process domain entity processes entity process domain entity processes entity process domain entity processes entity process domain entity processes entity process domain entity processes Sampson PCN Diagrams

22 Interdependent Process Chains Pizza Restaurant Restaurant s Process Domain ate ion Independent processing Surroga interacti negotiate supply contract identify ingredients recipes seat customer wait to be seated review me fill rder order online forecast supply needs preheat ovens cook create order wait for receive maintain serve eat prepare check present check pay chec Sampson PCN Diagrams

23 Process-Chain-Network (PCN) Diagram Health Clinic Patient PCN Diagrams can span an unlimited number of entities. Dir. Sur. Ind. Sur. Dir. procure lab tools submit payment claim Insurance Company Dir. Sur. Ind. Sur. Dir. pay covered amount review claim train staff on tools clean lab tools payment schedule analyze blood process payment take blood prescribe mediction medication coverage agreement Dir. Sur. Ind. Sur. Dir. take medication Pharmacy submit prescription to pharmacy Dir. Sur. Ind. Sur. Dir. submit payment claim fill prescription check coverage get pmt Sampson PCN Diagrams

24 PCN Analysis Sampson PCN Diagrams

25 Process steps span different regions Supplier Pizza Restaurant Customer Pizza Consumer Independent processing Independent processing recipes seat customer wait to be seated appetite preheat ovens cook create order review menu maintain wait for eat leftovers serve eat prepare check present check pay check return home Sampson PCN Diagrams

26 P-C-N depictions of service concepts Supplier Pizza Restaurant Customer Pizza Consumer Independent processing Independent processing recipes preheat ovens support process steps maintain backoffice process steps cook seat customer front-stage process steps customer contact create order Service process steps wait to be seated selfservice review menu wait for appetite do it yourself process steps eat leftovers serve co-production (customer labor) eat surrogate influence on customer prepare processes check direct influence present on customer pay check processes check surrogate influence on customer return processes home Sampson PCN Diagrams

27 Customer Intensity Supplier Pizza Restaurant Customer Pizza Consumer Independent processing Independent processing recipes independent preheat process ovens steps have maintain low Customer Intensity cook service process steps have seat customer high Customer Intensity serve create order Customer Intensity wait to be seated review menu wait for eat appetite independent process steps have low eat leftovers Customer Intensity prepare check present check pay check return home Sampson PCN Diagrams

28 What is Customer Intensity? A relationship between customer and the provider s process The degree to which variation coming from customers causes variation in the firm s processes. (Sampson 2010) The degree of influence individual customers have on the design and execution of firm processes. Low Customer Intensity Customer variation has little impact on variation in the process step. e.g. baking bread High Customer Intensity Customer variation has big impact on variation in the process step. e.g. selling bakery items Sampson PCN Diagrams

29 Why do we care about Customer Intensity? Design Factor Low Customer Intensity High Customer Intensity Facility layout Worker skills Job design Sales opportunity Quality control Asset utilization Use of technology Economies of scale Organized to enhance process flow. Accommodate customer needs and expectations. Focus on efficiency and consistency. Trained. Tightly defined with precise steps and cycle time. Mass marketing. Based on formal specifications. Schedule assets for maximum utilization (ROI). Cost/productivity issues dominate. Key to cost effectiveness. Focus on skills and responsiveness. Broadly defined. Personal selling. Based on variable standards from customers. Balance asset utilization with customer responsiveness. Customer acceptance issues dominate. Limited by variation in customer requirements/resources. Sampson PCN Diagrams

30 Buying furniture at Ethan Allen Supplier Ethan Allen Customer furniture purchaser Independent processing Independent processing design furniture offerings fabricate furniture ship to retail stores get/give advice Ethan Allen sales process has in stock? high Customer backorder item Intensity browse showroom make selection trash old furniture use item fill backorder purchase item transport home Facility layout: aesthetic. Worker skills: domain experts. Job design: broad. Sales opportunity: personal. Quality control: experiential. Asset utilization: low. Use of technology: limited. Economies of scale: low. Sampson PCN Diagrams

31 Buying furniture at IKEA Supplier Customer IKEA furniture purchaser Independent processing Independent processing design furniture offerings fabricate furniture kits ship to retail stores IKEA sales process has low Customer Intensity purchase item browse store make selection transport item to register trash old furniture use item assemble item transport home Facility layout: functional. Worker skills: trained. Job design: tight. Sales opportunity: mass marketing. Quality control: engineered. Asset utilization: high. Use of technology: extensive. Economies of scale: high. Sampson PCN Diagrams

32 3. Service strategy and innovation Enabling and Relieving Servitization and Deservitization Sampson PCN Diagrams

33 Principles of Process-Chain Innovation 1. Customer Intensity is a strategic choice! Sampson PCN Diagrams

34 1. Customer Intensity is a strategic choice Sandwich Supplier Supplier s Process Domain assemble sandwich Sandwich Consumer Consumer s Process Domain gate ction Independent processing Independent processing Surrog interact assemble prepackaged sandwich in a factory for sale at grocery store assemble sandwich to order in restaurant kitchen assemble sandwich at a buffet restaurant assemble sandwich at home using ingredients from the refrigerator assemble sandwich at a Subway sandwich as customer selects orders Sampson PCN Diagrams

35 Principles of Process-Chain Innovation 1. Customer Intensity is a strategic choice! 2. Process positioning makes a difference! Sampson PCN Diagrams

36 Which is the best process positioning? Sandwich Supplier Supplier s Process Domain assemble sandwich Sandwich Consumer Consumer s Process Domain gate ction Independent processing Independent processing Surrog interact assemble prepackaged sandwich in a factory for sale at grocery store assemble sandwich to order in restaurant kitchen assemble sandwich at a Subway sandwich as customer selects orders assemble sandwich at a buffet restaurant assemble sandwich at home using ingredients from the refrigerator Principle #1: Process inefficiency Principle #2: Customization Principle #3: Economies of scale Principle #4 Sampson PCN Diagrams

37 Principles of Process-Chain Innovation 1. Customer Intensity is a strategic choice! 2. Process positioning makes a difference! 3. Enabling innovations move process steps toward customers. 4. Relieving innovations move process steps away from customers. Sampson PCN Diagrams

38 Take-and-bake Process Chain Supplier Take & Bake Pizza Customer Pizza Consumer Independent processing Independent processing recipes call restaurant appetite preheat ovens assemble discuss options and specials eat leftovers prepare components wrap place order travel to store eat maintain pay for cook travel home Sampson PCN Diagrams

39 Enabling innovation? Supplier enabling innovations move process steps towards customers Customer Take & Bake Pizza Pizza Consumer Independent processing Independent processing recipes call restaurant appetite work play preheat ovens assemble discuss options and specials eat leftovers prepare components wrap place order travel to store eat maintain pay for cook travel home Sampson PCN Diagrams

40 Enabling innovation: order phone app Supplier enabling innovations move process steps towards customers Customer Take & Bake Pizza Pizza Consumer Independent processing Independent processing recipes preheat ovens assemble discuss options and specials call restaurant place order on mobile phone app appetite eat leftovers work play prepare components wrap place order travel to store eat The NEW Pizza Hut iphone App maintain pay for cook travel home Sampson PCN Diagrams

41 Relieving innovation? Supplier relieving innovations move process steps away from customers Customer Take & Bake Pizza Pizza Consumer Independent processing Independent processing recipes call restaurant appetite preheat ovens assemble discuss options and specials eat leftovers prepare components wrap place order travel to store eat maintain pay for cook travel home Sampson PCN Diagrams

42 Relieving innovation: autopay & porch delivery Supplier relieving innovations move process steps away from customers Customer Take & Bake Pizza Pizza Consumer Independent processing Independent processing recipes call restaurant appetite preheat ovens assemble discuss options and specials eat leftovers prepare components wrap place order travel to store eat maintain deduct from customer account pay for cook place in customer s porch box travel home Sampson PCN Diagrams

43 Summary An important new service design tool PCN Diagrams (aka Sampson Diagrams) Can document multi-entity process networks. Can capture interrelationships between firm processes and customer processes. Can reveal opportunities for process innovation. Examples: Airline travel Mobile phone purchase Industrial laundry Sampson PCN Diagrams