SBP 1b: Defining by Customer Content

This principle occurs because customer inputs are present in all services, in accordance with the Unified Services Theory.

To effectively understand a service we need to identify customer inputs into production and how those inputs are processed.

Is a hospital a service? What inputs do customers provide to the hospital process? Themselves as an ill, injured, or expecting patient. Their information, as medical history, description of symptoms, and list of allergies and special health conditions.

Is a bank a service? What inputs do customers provide to the banking process? Their belongings in the form of money. Also their check and credit card transactions, which can be considered information about desired payments.

Now for a more difficult example: Is a home builder a service? What customer inputs are involved in the home building process? The answer to that question determines whether a particular builder is a home manufacturer or a building service provider–home manufacturers build homes without the need for customer inputs. Does this designation matter? It certainly does. Custom home builders who ignore customer inputs, acting like home manufacturers, will soon find themselves liberated from their customers.

Another difficult example: Is a fast-food restaurant a service? Does the restaurant require customer inputs to begin the food preparation process? In fact, during busy times of the day the food is likely prepared prior to customer arrival–without any input from the customer. The customer order simply triggers the assembly of the order from items which were previously prepared. Thus we may observe that the cooking sub-process may at times be food manufacturing. Nevertheless, the front counter process–to take the order, answer questions, and accept payment– clearly cannot be accomplished without customer inputs. Thus we see that an overall operating process may have some elements which are service processes, and some elements which are manufacturing processes. (This idea will be discussed in “The Unit of Analysis” Service Business Principle.) These parts thus should be managed differently.

The inputs to an airline “production process” are customers' selves, their luggage, and their seat requests. The outputs from that process are customers' selves and their luggage at a preferred location.

With manufacturing, customers do not provide inputs to the main production process–non-customer suppliers provide all of the inputs. However, post-production elements may have customer inputs, making them service elements.

1. Do customers provide themselves as an input to the service production process? If so, how does the service process act on each customer?
2. Do customers provide their belongings as a service process input? How does the service provider manipulate those inputs? Are the customer-belonging inputs subsequently returned to the customer?
3. What information do customers provide as input to the service process? How is the information transformed or used by the service provider?

Draw a flowchart that describes the steps of a major processes in your company. Use rectangles for actions and diamonds for decisions, with arrows between to show the order of steps. (You should read Appendix B on Flowcharting Service Processes prior to completing this exercise.) For this exercise, choose a process that can be described in a dozen steps or fewer. Then, draw arrows identifying where customer inputs enter the process and write what the customer inputs are at specific steps. Put an “S:” before customer self inputs, a “B:” before customer belonging inputs, and a “I:” before customer information inputs. At the end of the process, identify how each of the inputs is likely to have been changed by the process. Where is most of the value added by the process?