Service design has been characterized as having three basic components - (i) physical facilities, processes & procedures, (ii) employee's behaviors, and (iii) employee's professional judgement. Given that car rental service is a relatively tangible, homogenous service with fairly low levels of customer contact (i.e., simultaneity), rental companies tend to focus their service design on the physical facilities, processes and procedures. While employees' behaviors are not unimportant, they are of secondary importance to facilities, processes and procedures in service design in the car rental industry. This can be seen industry wide.
Related Results 2. EasyCar obviously competes on the basis of low price. What does it do in operations to support this strategy?
Once the student understands the characteristics of the car rental industry from a service design perspective, the discussion can move to how easyCar's operational design allows it to compete on the basis of price. Given the extent to which easyCar has designed its process to reduce cost, students should not have a difficult time identifying the features of its process design that allow it to offer a lower price. The key point to drive home is the extent that easyCar has gone to align its operations strategy and process design with its business strategy. Clearly the order winning criteria in this case is low price, (see Terry Hill's Manufacturing Strategy textbook for more on the concept of the order winning criteria in operations strategy).
Perhaps the best way to make this point is to explicitly compare easyCar's operations with the operations of a traditional car rental company. Exhibit TN-I shows this comparison. After having gone through this comparison, the instructor can ask stude ...