Service Management - Essay Example

Executive summary

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The paper introduces the concept of service management and its importance in organizations. It then further gives a description in customer service improvement initiative which is the new strategy to better service management. In the discussion, it provides a rationale for the service action which is attached to the framework from the case study of the DHL Company to guide the development of an implementation plan which refers to change management to support the choice of structure, which means choose and explain a change in service management. This research-based paper constitutes an attempt at assessing dominant discourses and practices of Strategic service strategies. An important part of modern management discipline, the DHL company studies present a specially interesting example of the interconnectedness between underlying ideological assumptions of customer service and organizational efficiency, on the one hand, and the managers and employees practical efforts at implementing these ideologically-driven prescriptions in firms daily activities. The conclusion and recommendation give a detailed consideration of the power relationships within your stakeholder group; a suitable timeline for implementation; review of service management evaluation strategies. It further outlines a recap of the discussion in the paper.


A profound understanding of the environment an organization operates in is a prerequisite to developing an effective strategy. An organization that does not know its rivals or understand its industry and the rules of competition cannot develop an effective competitive strategy. An organization develops a strategy to determine how to respond to competitors and better yet how to change the environment and the rules of competition to its advantage. Service management demands careful attention to all levels of the business operation from the highest level of strategy formulation to the various organizational levels structures to the delivery of the customer experience at the front line. It requires an enormous breadth of attention on the part of the organization’s leaders and the ability to think on many levels, a challenge for most executives. It requires a person with this breadth of vision to make it work, as well as the energy to implement it in every dimension of the operation (Denney, United States., Booz Allen Hamilton., ; Iteris, Inc. 2009).

The one mode that spans this full range of thinking from the strategic level to the tactical level is the service triangle. It forms the core of the service management concept and provides the conceptual checklist for evaluating the organization progress toward its goal of strategic customer focus. The real power of the service triangle as a thinking model for running a service is the way if integrates the key components of customer value, business strategy, people and system into a unified concept (Mangan, Lalwani ; Butcher, 2008). The strategy must be connected to the client’s value model. The people must understand and implement the strategy. The system must support the people in creating value. Each of the connecting lines defines a crucial dimension of the total concept of strategic customer focus (Denney, United States., Booz Allen Hamilton., & Iteris, Inc. 2009).

Literature review

The organization has adopted a service triangle which enables its leaders to bring together the critical truths of its business strategy, the needs of its culture and the design of its infrastructure into a unified concept for competitive success. By placing the customer at the center of the triangle, they are declaring that the client’s value model that is the set of critical attributes of the service experience that drive the customer buying behavior will guide the decision about how the organization operates.

The business strategy at the top of the triangle spells out the organization unique way of winning and keeping the customers business with its particular customer value package which is the combination of things and experiences based on a carefully chosen value proposition which is the fundamental benefit premise that gives the organizations offering its competitive appeal (Mangan, Lalwani ; Butcher, 2008).

The people part of the service triangle refers to the entire culture of the organization, not just to the front line service delivery people. In a service culture, people think of their personal success as connected to the success of the enterprise, and they treated one another with the same respect, cooperation and added value spirit they offer of the paying customer. The various departments in the organization treat one another as customers as well concentrating more on contributing than the competition. An organization culture can be one of its best competitive weapons, or it can be a competitive handicap. Ultimately, the way your employees feel the way our customers will feel (Mangan, Lalwani, ; Butcher, 2008).

The systems part of the triangle refers to the entire infrastructure of the organization. All organizational structures functional relationships, physical facilities, information system procedures, rules and regulations should be customer friendly in their design. They should make it as easy as possible for the people in the organization to implement the strategic customer focus and deliver an outstanding experience to the customer at the many moments of truth which is the individual episodes or points of perception at which the customers come into contact with various aspect of the organization and make judgments about the value it offers.

Customer value model

One of the key starting points for adopting a strategic customer focus is finding out what the customer is trying to buy when he or she confronts the business. People do not buy products or services: they but value. They buy a solution to their problems, answers to their needs and improvements in their lives. The first critical skill of service management is learning to thin in customer value terms. The customer value model enables you to accomplish this.

Discovering and defining the customers value model is the first step in learning how to deliver it. Modern customer research methods focus on helping the customers tell one in his or her language and perspective, what three real values is. Once one clearly understands this value proposition, then he/she can engage in a dialogue with the customers that will help one discover the critical element of the service experience that make it real. The sidebar at left shows a typical customer value model for a hospital stay.

Another essential skill of service management is customer experience thinking. The organizations need to help everyone to understand what the service experience looks and feels like to the client (Mangan, Lalwani, ; Butcher, 2008). This is where the traditional industrial model of management has failed so completely it insists on describing events from the organization’s point of view, not from the client’s perspective.

People working in an organization tend to think regarding their individual departments and their local functional specialties and procedures. Their picture of the customer experience is a never-ending sequence of repeating encounters as the individual customers come and go. The customer, however, tends to view the service experience as a unified series of events the moments of truth all connected into a single chain of experience or a cycle of service (Dalrymple ; Parsons, 2000).

The business strategy

Defining the competitive business strategy regarding customer focus means deciding what kind of total value package to offer (Dalrymple ; Parsons, 2000). Different types of businesses have different kinds of challenges and therefore different possibilities in designing the value package. Some service companies have simple value packages that require little skill knowledge or style to deliver. Fast foods business for instance typically provides a convenient, low-priced meal experience with little embellishment. Their customers typically expect no more of them. However, an enterprise with a more complicated value proposition has more challenges and more options for building customer preference (Dalrymple ; Parsons, 2000). In the service management way of thinking, organizational leaders must find the highest level of the strategic value hierarchy that makes sense for their line of business and focus on competing effectively at that level of value delivery.

DHL service management

The company has situated itself as a premium service supplier to accomplish its arrival and profitability. They request premium from customers as they can give reliable service, modify arrangements and give effective record management services. Accordingly, DHL’s center items and services, including Document Express and Worldwide Parcel Express, moved toward getting to be wares (Hennig-Thurau & Klee, 1997). A more prominent number of suppliers were presently equipped for giving the service quality and physical travel times that customers require (DHL International (U.K.). 1996).

For the level business methodologies, DHL embraces the Differentiation Strategies. DHL separates itself with competitors by distinguishing key clients and realizing what they esteem. DHL gives better services at same cost by enhancing their base. It incorporates extending trucking courses, making center air points, and enhancing the sorting focuses, drop-off focuses. Also, Focused Differentiation is embraced; DHL gives high service management advantages to a market portion (DHL International (U.K.). 1996). The company concentrates on the midmarket and smaller businesses, as to provide high service benefits to the customers.

DHL embraces acquisitions and Integration Strategies. DHL has coordinated more than 100 organizations; the flat mix with Airborne Inc. helps DHL to grow their overall network Furthermore the ground network. It builds the capacity to draw in United States customers who need to cut expenses by sending parcels overland instead of via air. Broadening Strategies are embraced in entering United States market. The United States market is moving toward a ground network; DHL broadened another market of the ground-based system as to catch United States customers of little and medium-sized businesses. A decent ground network is required for the new market; DHL puts more in creating and enhancing its framework for fulfilling the new market (Hennig-Thurau & Klee, 1997).

DHL Service Operations Management

Service operations management is, for the most part, worried about giving down to earth understanding to enable firms to send their operations viably. Extraordinary service companies have an unmistakable internal key service vision given focused market and customer portions, the idea of a service design as a mind-boggling item package and the configuration of their service conveyance frameworks. These parts speak to the fundamental qualities on which a firm is manufactured and the level of coordination or arrangement. At the point when these customer-centered parts are very much coordinated or adjusted, they positively affect profitability. When organizations center their consideration on the customer market, the service idea, and the conveyance framework, they make esteem amid the service experience that can drive customer fulfillment with the item or service and upgrade the buying knowledge. Thus, expanded customer fulfillment upgrades customer reliability and firm profitability (Dalrymple & Parsons, 2000).

While these calculated connections are among the most prevalent approaches to outline the connection between customer-centered conduct and profitability, they have not been very much accepted observationally. Also, the literature is noiseless about the succession that chiefs ought to take after while executing a key service vision. In this paper, we rethink customer arrangement and depict the grouping of exercises and procedures required to set up a vital service vision inside DHL. In our methodology, the key service vision starts with the improvement of an idea service model. Next, we utilize the idea service model to figure out a market division model and afterward to overhaul the framework service plan (Cook, 2012).

The greater parts of the competitive advantages of DHL are most appropriate to an adult industry. In this developed industry, it is under Hypercompetitive conditions. As to maintain competitive advantages, associations need to concentrate on the capacity to change, speed, adaptability, development and disturbance of business sector. DHL is a specialist in express bearer, and all aforementioned competitive advantages of the organization are reasonable in this full grown industry with the hyper rivalry (Denney, United States., Booz Allen Hamilton & Iteris, Inc. 2009).

The service idea was initially characterized as the aggregate heap of merchandise and services sold to the customer and the relative significance of every part to the customer. At the end of the day, it mirrors the way an organization might want its services to be seen by customers. A key purpose of separation for DHL was to reclassify its way to deal with the service idea in light of the relative significance of different center and fringe service segments. This obliged us to model customer inclinations all the more straightforwardly given a two-stage approach (Cook, 2012).

There are some reasons why DHL proceeds with a worldwide spotlight on parcels and expedited delivery. It can use vital abilities of the company and another association. The physical assets can be shared between the company and other association. For instance, vehicles, planes, ships, and all offices can be shared or acquired at a moderately low cost. It can guarantee and expand the accessibility of assets. The absence of ground transport capacity is one of the issues of DHL in entering U.S. market; it takes lots of money and a considerable measure of ability to construct a brilliant ground system (Denney, United States., Booz Allen Hamilton & Iteris, Inc. 2009). In the wake of finishing the integration of Airborne, which had officially settled a ground-based system, it helps it to lessen cost and time for building a ground system. By related enhancement, the company can build its monetary assets. The expansion of capital and money, helps the company to have more chances to contribute more significant ventures, build up its business to a worldwide system furthermore enhance its base.

Economies of scale are an advantage of related broadening. On account of DHL, their competitors are gaining decent profit rates, double-digit edges. However, DHL won’t get these edges for some time. It is because their competitors have bigger economies of scale. Join related exercises into a separate operation, it expands the economies of scale, with the economies of scale around the world; DHL can likewise procure an attractive profit rates or even a higher profit rates than its competitors. Exchanging skill or learning between associations is helpful. DHL is a specialist in the bearer industry; related broadening can exchange its current skills to the new related business. It can enhance client furthermore increase competitive advantage. It makes new competitive qualities and capacities of DHL (Denney, United States., Booz Allen Hamilton ; Iteris, Inc. 2009). It makes the effect of cooperative energy, and it can build profit and lower cost of the company.

DHL Online service management

The growth of ICT has had a profound impact on the DHL Company by changing the way in which retail business are organized, conducted and linked to other organizations. In particular, the internet has enhanced supply chain management by facilitating the speed, ease, flexibility and agility of real-time information exchange. The internet has thus provided numerous opportunities for cost reduction, coordination and service improvement in the supply chain. The internet has improved integrated forecasting. The incorporation of DHL service management works for the propose of Collaborative production planning, transportation management, customer relationship management and new product development to meet the changing demands of customers (Mangan, Lalwani ; Butcher, 2008). It is, therefore, not surprising that an increasing number of retailers now use the internet for purchasing, transportation, inventory management, customers service and supplier management. The internet has improved interfere relationship, strategic partnerships, information sharing, mutual learning and transparent SCM process. In many instances, this has transformed the hierarchical relationship into market relationships among previously disparate organizations (Mangan, Lalwani ; Butcher, 2008).

Conclusion and Recommendation

Dont do service management because it seems like a good idea. Do it because there is some business improvement or result required and service management just happens to be the best way to get there for instance lower cost customer support, fewer disastrous rollouts happier customers, better data on the product, introducing a more sophisticated service. Service management is not one subset of the business; it is not one activity at the end of the main supply chain. It is a different way of seeing the whole supply chain, the whole business that produces the service, by seeing it initially from the outside from the customer point of view. Understanding our business regarding the service, it provides cant help but make us better at providing them. To a customer better means more useful and more reliable, more valuable and better quality. It is to create a continual service improvement program from the start, it has a plan, it takes suggestions, prioritizes them based on how they align with the objectives, farms them out, tracks them, pushes them along. Dont let management design improvements alone. Senior mangers bring context, strategy and customer needs. Frontline managers bring their knowledge of how to improve operational process and procedures, and external consultants bring experience, expertise, ideas from outside and theoretical best proactive content.

In conclusion, service management means of delivering value to customers by facilitating outcomes to achieve, but without the ownership of specific costs of risk. Adopting a service management advance can have a reflective effect on the approach business work and staff think. It removes us from that isolated, base up imagining that starts with what we have and what we do and in the long run works its way up and out to what we convey to the customer. Rather to an emphasis on what leaves the channel to what we give. In this case, service is a distinctive method for seeing the entire production network, the entire business that creates the service, by seeing it at first all things considered, from the customer’s perspective. The case of DHL in the recent discussion of service management often centers on service improvement. DHL has been able to understand the service that they are providing from both a consumer and provider perspective. It has also ensured that the services do facilitate the outcomes that their customers want to achieve, understand the value of those services to their customers and hence their relative importance and finally understand and manage all of the costs and risk associated with providing those services.


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