PCN Analysis Exercise Assignment Log

1. PCN Analysis Exercise Assignment Log PCN Analysis for team 0: Scott Sampson

2. Selecting a Target Business Process to Analyze To complete the assigned exercises, identify a target business process to analyze, unless one is assigned by the instructor. It is good to select a process that involves two entities that interact – a firm and a customer. Examples include: • the process of ordering and serving food at a restaurant • the process of getting your computer repaired • the process of having an eye exam It is good to use a process from your own company or a company you have experience with. Do not select an airline process, the illustrative example. The following pages show an example of completed PCN Analysis Exercises using an airline as the subject of analysis. PCN Analysis for team 0: Scott Sampson

3. PCN Analysis Exercise Cover Page • Assignment: PCN Analysis Exercises for Ch1-Ch13 • Course: MBA 619-1 Spring 2013, BYU • Team: 0 • Team members: • Scott Sampson • Target business process: Airline flight booking and transportation PCN Analysis for team 0: Scott Sampson

4. Chapter 1 Exercise: Identify service design needs Service Failure example #1: I was on a United airlines flight from Salt Lake City to San Francisco. The flight was delayed three hours then canceled. The airline made no gate announcements about the delay, but required us to make trips to the gate and inquire about the delay status. When the flight was finally canceled we had missed all other possible flights that day. The effect was missing an important meeting in San Francisco the next morning. The airline only provided meal and lodging vouchers upon our instance, and even that was somewhat grudgingly. Improvement opportunities include: • Gate agent employees could have been trained to provide better communication about delayed flights. • The digital sign at the gate could have provided more accurate flight status updates. • The airline could have had a procedure for proactively helping stranded customers instead of requiring us to be upset enough to complain. PCN Analysis for team 0: Scott Sampson

5. Chapter 1 Exercise: Identify service design needs Service Failure example #2 My family and I were on an Air France flight from Bristol UK to Paris France (CDG), which connected to a flight to the U.S.. In Bristol the gate agent only gave us boarding cards for the Bristol-Paris leg, stating that we needed to get the Paris-US boarding cards in Paris. In Paris we hurried through the CDG terminal to catch our connecting flight that was soon to depart. When we got near the gate they asked for our boarding cards and we told them that the Bristol agent said we were to get them at CDG. The Air France employee said that should have happened before TSA security, so we had to go back through security (with another scan) to get the cards, then again back through security to get to the gate. At the gate we were the last passengers for this flight, but they still decided to do a thorough search of my 7-year-old daughter’s kiddy backpack. Improvement opportunities include: • Better communication of expectations between the Bristol and CDG airports. • Clearer indication of where we were to get boarding passes at CDG. • Means for producing boarding cards nearer the point where they are needed (so passengers without cards do not need to go back through security). PCN Analysis for team 0: Scott Sampson

6. Chapter 2 exercise: Diagram your service supply chain. TSA qualified self jet equipment jet manufacturer self and luggage self passenger airline peanut packager peanuts transported self and luggage hungry self fed self airport food vendors PCN Analysis for team 0: Scott Sampson

7. Chapter 3 AE: Create a PCN Diagram (first page) Airline passenger booking a ticket on an airline website visit an airline website need air transportation enter search information acceptable flight? no develop flight schedule provide flight options yes select flight process payment enter payment information print eticket send eticket wait until flight day PCN Analysis for team 0: Scott Sampson

8. Chapter 3 AE: Create a PCN Diagram (second page) Airline passenger check-in and transportation process drive to airport check identification find parking check reservation wait in line get to terminal receive checked bags tag checked bags transfer bags to appropriate gate go through security place bags on belt give boarding pass land plane load bags on plane board plane wait for boarding clean and refuel plane exit plane fly to destination walk to bag claim unload checked bags watch and wait transport bags to baggage claim retrieve bags depart airport PCN Analysis for team 0: Scott Sampson

9. Ch4: Analyze the value proposition (first page) Airline passenger booking a ticket on an airline website visit an airline website need air transportation enter search information  acceptable flight? no develop flight schedule provide flight options yes select flight +$ process payment enter payment information print eticket send eticket  wait until flight day PCN Analysis for team 0: Scott Sampson

10. Ch4: Analyze the value proposition (second page) Airline passenger check-in and transportation process drive to airport check identification  find parking  check reservation wait in line get to terminal receive checked bags -$ tag checked bags -$  transfer bags to appropriate gate go through security place bags on belt   give boarding pass -$ land plane load bags on plane board plane wait for boarding -$ clean and refuel plane exit plane fly to destination  walk to bag claim unload checked bags -$  watch and wait  transport bags to baggage claim retrieve bags depart airport PCN Analysis for team 0: Scott Sampson

11. Ch4. Description of Value Proposition • Describe key steps for creating value potential. What resources are involved in creating value potential? • The steps “Enter search information” and find “acceptable flight” are important because it can often be difficult to find acceptable flights. Acceptable flight includes finding acceptable locations, dates and times, seats, and price. Providing easy-to-use search tools (online) is essential to creating value potential. • The step “print e-ticket” gives the customer confidence that they actually do have the reservation. Even though an e-ticket can be optional in this day and age, it is a tangible indicator of what the customer has purchased. • Describe value realization. In what steps is value realized? • Value realization for the airline is primarily in arriving at the airport—the joy of being at the destination. Unfortunately, this joy is often magnified by the horrible experience it is waiting and being on the flight. • Value could be realized in the “fly to destination” step if it involved comfort, good food, and/or quality entertainment. • For the diagramed process, describe the major cost drivers for the provider. • The primary cost driver is "fly to destination" because it involves an expensive asset, the plane, and fuel on the plane. • The other major cost drivers are largely labor, to check in passengers, check bags, handle bags, fly planes, and provide some version of food or drink on flights. • For the diagramed process, describe the major psychological costs to customers. • Many of the psychological costs involve waiting: waiting to check in, waiting to get through security, waiting to board plane, waiting to retrieve bags. • Check-in can also provide psychological cost when passengers are not within required weight and size limits (for luggage). • Going through security can likewise provide psychological costs when passengers are not fully aware or compliant with TSA regulations. PCN Analysis for team 0: Scott Sampson

12. Ch5. Enabling Innovation: Online checking and bag tagging Airline passenger check-in and transportation process check in on airline website check identification drive to airport find parking get to terminal print boarding pass and luggage tag  check reservation receive checked bags -$ scan luggage tag and tape on bag* tag checked bags -$   -$ transfer bags to appropriate gate go through security place bags on belt   give boarding pass -$ land plane load bags on plane board plane wait for boarding -$ clean and refuel plane exit plane fly to destination  walk to bag claim unload checked bags -$  watch and wait  transport bags to baggage claim retrieve bags depart airport PCN Analysis for team 0: Scott Sampson

13. Ch5. Relieving Innovation: Provided county airport shuttle Airline passenger check-in and transportation process meet shuttle at county parking lot drive to airport drive passenger to airport check identification -$ (+$?)   find parking  check reservation wait in line get to terminal receive checked bags -$ tag checked bags -$  transfer bags to appropriate gate go through security place bags on belt   give boarding pass -$ land plane load bags on plane board plane wait for boarding -$ clean and refuel plane exit plane fly to destination  walk to bag claim unload checked bags -$  watch and wait  transport bags to baggage claim retrieve bags depart airport PCN Analysis for team 0: Scott Sampson

14. Ch5. Description of Enabling and Relieving Innovations • Enabling Innovation • Passengers print their own boarding pass and luggage tag. • Description: • Passengers have the option of printing their own boarding pass and luggage tags at home within 24 hours of their flight. • The only contact customer has with the airline before security is allowing a low-wage employee to tape the luggage tag on the luggage. • If the luggage tag printed by the passenger is unusable, the low-wage employee can scan the tag or boarding pass and print out a new one. • Impact on Value Proposition and Operating Characteristics: • Increased customization: customers can print passes whenever they want. • Reduces economies of scale: customers might not have knowledge or supplies to print and attach their own luggage tags. (Scotch tape probably is not going to work.) • Improves efficiencies: • Reduced  cost to customer, who does not need to wait in line to check bags (low-wage employee is highly efficient) • Reduced -$ cost to firm, replacing multiple bag checkers with one or two low-wage employees. • Relieving Innovation • Provide a county-based shuttle to the airport • Description: • When passenger books their ticket, they are given the opportunity to buy a slot on a shuttle-bus that departs from a location in the passenger’s county or city. • Passenger still needs to get a ride to the shuttle location, or drive car and pay for parking there. • Shuttles leave at fixed intervals, but passenger would have a reserved seat. • Passenger would print out their shuttle confirmation at time of ticketing. • Impact on Value Proposition and Operating Characteristics: • Increased economies of scale: saves gas and reduces number of vehicles at airport. • Reduces customization: • customers can only leave at scheduled shuttle times. • customers can only go to/from airport (cannot stop at Wendy’s on the way) • Reduced  cost, since customer do not need to deal with traffic and parking. • Additional revenue opportunity +$ for airline. PCN Analysis for team 0: Scott Sampson

15. Ch6. Analyze capacity, utilization, and idleness (first page) Airline passenger booking a ticket on an airline website visit an airline website need air transportation capacity step enter search information acceptable flight? no develop flight schedule provide flight options yes select flight process payment enter payment information print eticket send eticket wait until flight day PCN Analysis for team 0: Scott Sampson

16. Ch6. Analyze capacity, utilization, and idleness (second page) Airline passenger check-in and transportation process drive to airport check identification find parking check reservation wait in line get to terminal receive checked bags capacity step tag checked bags transfer bags to appropriate gate go through security place bags on belt give boarding pass land plane load bags on plane board plane wait for boarding clean and refuel plane exit plane fly to destination walk to bag claim unload checked bags watch and wait transport bags to baggage claim retrieve bags depart airport PCN Analysis for team 0: Scott Sampson

17. Ch6. Analyze capacity, utilization, and idleness Step from provider’s Independent Processing • step: develop flight schedule • step time estimate: 40-100 hours per year • Resource 1: Chief Operating Officer (COO) • estimated 10% of COO time developing flight schedules • rest of time spent monitoring and managing the operations • short-term capacity increase by outsourcing schedule planning • long-term capacity increase by hiring scheduling assistants • Resource 2: Computer system • estimated 1% of computer system time developing flight schedules • rest of time spent tracking data or idle • short-term capacity increase by utilizing night hours to do scheduling • long-term capacity increase capacity by purchasing additional computers Direct Interaction step • step: tag checked bags • step time estimate: 1 minute per customer • Resource 1: Airline employee • estimated 5% of employee time tagging checked bags • rest of time spent checking passenger records or waiting for passengers • short-term capacity increase by having employees from other areas tag bags • long-term capacity increase by requiring customers to tag their own bags • Resource 2: tag printing machine • estimate that machine spends 2% of its time printing tags • rest of time it is idle • short-term capacity increase not really feasible • long-term capacity increase by buying additional tag printing machines PCN Analysis for team 0: Scott Sampson

18. Airline passenger check-in and transportation process Ch6. Analyze customer waiting wait 0 to 30 minutes due to limited number of airline employees. drive to airport check identification find parking check reservation wait in line get to terminal receive checked bags tag checked bags transfer bags to appropriate gate go through security place bags on belt give boarding pass land plane load bags on plane board plane wait for boarding clean and refuel plane exit plane fly to destination walk to bag claim unload checked bags wait 10 to 20 minutes due delay in getting bags unloaded and transported to baggage claim area. watch and wait transport bags to baggage claim retrieve bags depart airport PCN Analysis for team 0: Scott Sampson

19. Ch6. Analyze customer waiting wait in line to check in • expect to wait 0-30 minutes. • Waiting occurs because customers arrive in large numbers shortly before popular flight times, with a fixed number of check-in employees. • Psychological costs could be reduced by: • Provide signs showing the current TSA wait, reducing anxiety. • Check documents as people come into line, so that customers will fell they are in process, and to reduce uncertainty about whether waiting in that line is even necessary. wait at baggage claim • expect to wait 10-20 minutes. • Waiting occurs because of the transit time of bags moving from the plane to the baggage claim. • Psychological costs could be reduced by: • Feature a video screen of information about attractions of the city and surrounding area to keep people occupied while waiting (turn screen off when bags arrive to avoid distraction). • Provide customers with an ETA update about when the bags will arrive, so that the wait will have a known duration. PCN Analysis for team 0: Scott Sampson

20. Airline passenger booking a ticket on an airline website Ch7. Indication of two service failure points. visit an airline website need air transportation (F1) flight information web server goes down. Detected by customer when entering flight query. enter search information acceptable flight? no develop flight schedule provide flight options yes select flight process payment enter payment information print eticket send eticket wait until flight day (F2) passenger never receives e-ticket. Detected by customer either immediately or at flight day. PCN Analysis for team 0: Scott Sampson

21. Airline passenger booking a ticket on an airline website Ch7. Analyze service failure response (F1). visit an airline website need air transportation enter search information (F1) server goes down acceptable flight? no develop flight schedule provide flight options yes provide form for customer to provide phone number airline calls customer select flight discuss flight alternatives and options process payment provide payment information print eticket send eticket wait until flight day PCN Analysis for team 0: Scott Sampson

22. Airline passenger booking a ticket on an airline website Ch7. Analyze service failure response (F2). visit an airline website need air transportation enter search information acceptable flight? no develop flight schedule provide flight options yes select flight process payment enter payment information (F2) passenger never receives e-ticket print eticket send eticket customer calls airline re-send eticket did customer get eticket? yes wait until flight day no FedEx ticket PCN Analysis for team 0: Scott Sampson

23. Ch7. Description of service failure responses • Failure (F1): Airline web server goes down • This failure may occur because of technical problem, system overload. • We assume that when the reservation system goes down the router is still able to redirect requests to another system or web page. • Details: • When server goes down, customer is immediately redirected to a form that explains that there is a problem, and if the customer will provide a phone number then an agent will call the customer back about the flight. • Customer might optionally provide a time window to be called back. • If the server comes back up, agents can call customers and tell them that is the case. • Customer would not be charged any extra fees for using an agent for reservations. • Benefits to customer: • Not needing to call airline and wait on hold. • Benefits to airline: • Fewer lost customers. • Failure (F2): e-ticket not received • This failure may happen with airlines that email the e-ticket to passengers. Causes might include: • bad email address • e-ticket filtered as spam • customer does not recognize e-ticket email message • customer does not check email account very often • and so forth • Details: • Customer notices that he or she did not receive the e-ticket, calls airline. • Airline immediately resends e-ticket and asks customer if he or she got it. • If not, paper ticket is mailed via regular mail (if time), or FedEx (if no time) • Alternately, customer could be given flight confirmation identifier over the phone, which can be used to check the flight status on the airline’s website. • Benefits to passenger: • Have assurance that reservation is booked. • Benefits to airline: • Fewer passengers showing up at airport unprepared. PCN Analysis for team 0: Scott Sampson

24. Airline passenger booking a ticket on an airline website Ch7. Poka yoke to prevent service failure (F2). visit an airline website need air transportation enter search information acceptable flight? no develop flight schedule provide flight options yes select flight process payment enter payment information click e-ticket link send e-ticket link (F2) passenger never clicks e-ticket link wait until flight day has customer clicked link within 5 days? airline calls customer print e-ticket no discuss problem and determine if alternate ticketing method is needed PCN Analysis for team 0: Scott Sampson

25. Ch7. Description of poke yoke • Failure (F2): e-ticket not received • This failure may happen with airlines that email the e-ticket to passengers. Causes might include: • bad email address • e-ticket filtered as spam • customer does not recognize e-ticket email message • customer does not check email account very often • and so forth • Poka yoke details: • To detect this failure (without waiting for customers to report it), instead of sending the e-ticket the airline sends a link to the e-ticket. If the customer has not clicked the e-ticket link with 5 days we assume a service failure. • On detected failure, the airline calls the customer at the number they gave when ticketing. • Airline agent asks customer if they are aware of the problem. • Agent records in database any information about cause of the problem (e.g.s above). • Agent determines an alternate email address, or if snail-mail ticketing is necessary (perhaps for a mailing fee). • Airline tracks common causes of problems and makes process adjustments accordingly. • Benefits to passenger: • Less likely to forget about not having e-ticket. • Benefits to airline: • Able to identify more errors and correct causes. • Failure (F2): e-ticket not received • This failure may happen with airlines that email the e-ticket to passengers. Causes might include: • bad email address • e-ticket filtered as spam • customer does not recognize e-ticket email message • customer does not check email account very often • and so forth • Details: • Customer notices that he or she did not receive the e-ticket, calls airline. • Airline immediately resends e-ticket and asks customer if he or she got it. • If not, paper ticket is mailed via regular mail (if time), or FedEx (if no time) • Alternately, customer could be given flight confirmation identifier over the phone, which can be used to check the flight status on the airline’s website. • Benefits to passenger: • Have assurance that reservation is booked. • Benefits to airline: • Fewer passengers showing up at airport unprepared. PCN Analysis for team 0: Scott Sampson

26. Airline passenger check-in and transportation process Ch8a. Job design drive to airport check identification Divergence about how to handle bags that are fragile or unusually packaged. find parking check reservation wait in line get to terminal receive checked bags tag checked bags transfer bags to appropriate gate go through security place bags on belt give boarding pass land plane load bags on plane board plane wait for boarding clean and refuel plane exit plane fly to destination walk to bag claim unload checked bags watch and wait transport bags to baggage claim retrieve bags depart airport PCN Analysis for team 0: Scott Sampson

27. Ch8a. Job Design • Divergence step: receive checked luggage • Divergence about how to handle luggage that are fragile or unusually packaged. • Costs of divergence • Would need to hire employees who know about the luggage handling process and what it’s limits are. • Fragile or insufficiently packaged items may be damaged in transit, leading to customer claims. • Increased standard operating procedures • Provide customers with specific guidelines about acceptable luggage. • Require customers to sign a release for all luggage of unusual nature. • This would reduce airline liability, but may upset customers. PCN Analysis for team 0: Scott Sampson

28. Airline passenger check-in and transportation process Ch8b. Customer training drive to airport check identification attire of employee information about which line to be in find parking check reservation wait in line get to terminal receive checked bags line layout noise or music info about policies and procedures tag checked bags transfer bags to appropriate gate go through security place bags on belt give boarding pass land plane load bags on plane board plane wait for boarding noise, smells, entertainment, seating, electrical outlets, boarding progress info clean and refuel plane exit plane fly to destination info about where bag claim for this flight is walk to bag claim unload checked bags watch and wait transport bags to baggage claim retrieve bags depart airport PCN Analysis for team 0: Scott Sampson

29. Ch8b. Customer trainingDescription of sensory elements and impact on customer behavior • step: wait in line • behavior: passenger not spending time in wrong line and line jumping. • element (sign): information about which line to be in. • behavior: passenger having reasonable expectations about line duration. • element (space): line layout that allows passenger to see how line progresses. • behavior: passengers not being grumpy in line. • element (ambient condition): provide pleasant music. • step: check in • behavior: passenger have confidence in employee • element (symbols): attire of employee makes employee look more like a captain than a baggage handler. • step: go through security • behavior: passenger be prepared for that specific process (e.g. belt removed, pockets emptied, shoes off, etc.) • element (sign): provide information in line about that airport’s specific policies and procedures. • step: wait for boarding • behavior: passengers experience severe psychological costs during the waiting process • element (ambient condition): provide a pleasant noise (other than CNN disaster news), provide a pleasant smell (like candy), provide some type of appropriate entertainment (besides CNN). • element (function): furnish seating areas with more power outlets, so that waiting passengers can self-entertain or be productive. • element (sign): provide passengers with a clear identification of boarding progress (besides PA announcements). • step: walk to bag claim • behavior: passenger going to the wrong bag claim area and reporting missing bags. • element (sign): provide disembarking passengers with information about where baggage claim is for the flight they are just getting off of. PCN Analysis for team 0: Scott Sampson

30. Ch9. Managing customer roles PCN Analysis for team 0: Scott Sampson

31. Ch10. Lean Service analysis Airline passenger check-in and transportation process (3)Eliminate direct interaction by (3) Enabling customer to self-serve. check identification check identification at an eye retina scan kiosk that then prints bag tags drive to airport check reservation (1)Enhance interaction by having agent tell the customer the weather at the destination shown on the reservation. find parking tell weather at destination wait in line get to terminal receive checked bags tag checked bags transfer bags to appropriate gate go through security place bags on belt give boarding pass land plane load bags on plane board plane wait for boarding clean and refuel plane (4) Extend offering by providing frequent flier customers with a colored card that allows them in the fast line at security. exit plane fly to destination walk to bag claim unload checked bags watch and wait transport bags to baggage claim retrieve bags depart airport PCN Analysis for team 0: Scott Sampson

32. Ch11: Deservitization example Airline passenger check-in and transportation processfor Ryanair (low-cost airline in Europe) drive to airport check identification wait in line Prior process had customer handing bag to airline employee who placed the bag on the conveyer belt find parking check reservation get to terminal take bags to departure terminal tag checked bags place bags on belt load bags on conveyer belt go through security land plane load bags on plane board plane wait for boarding clean and refuel plane exit plane fly to destination walk to bag claim unload checked bags watch and wait transport bags to baggage claim retrieve bags depart airport PCN Analysis for team 0: Scott Sampson

33. Ch11. Analyze deservitization and servitization Deservitization • Example: Ryanair • Description: Most airlines take bags from passengers at check-in. Ryanair tags bags at check-in, but (at some airports) requires the customer to take their bags to the terminal where the flight departs from. This saves Ryanair from having to route bags to different terminals. • This is an example of service disintermediation. The customer can perform that portion of baggage handling without relying on the provider. Servitization • Servitization (increasing the value of interaction) could be accomplished by training check-in employees about the various destinations of flights from that airport. A good way to do this would be to regularly fly the employees to those destinations and put them on tours that would highlight features of the destination. • Employees could then provide travel advice to customers at check-in, based on the expressed interests of the customers. • This would decrease the efficiency of direct-interaction check-in, but also increase the value of that interaction. PCN Analysis for team 0: Scott Sampson

34. Ch12. Explore systematic service innovation Airline passenger booking a ticket on an airline website customer enters search information on flight schedule software loaded on customer’s PC airline prints a book of flight information with a table of contents and index airline agent enters flight preferences that were emailed from customer customer tells flight preferences to airline agent who enters them in a flight search system customer enters flight preferences on airline website enter search information enter search information enter search information enter search information enter search information 1 2 B 3 4 provide flight options provide flight options provide flight options provide flight options provide flight options airline prints a book of flight information airline system sends flight options via website or email airline agent calls customer and provides them with flight options customer sorts through flight options listed on airlines website customer sorts through flight options listed in airline’s printed or downloaded flight schedule PCN Analysis for team 0: Scott Sampson

35. Ch12. Explore systematic service innovation • Configuration (1) has the airline’s agent taking flight information requests over the phone then emailing the results to the client. • Advantage is that it gives the agent time to search for good flight options without detaining the customer on the phone. • Disadvantage is customers cannot directly ask questions about the results. • Some travel agents currently operate like this, such as BYU Travel. • Configuration (2) has the airline agent interacting directly with the customer both to enter the search information and provide the flight options, in person or on the phone. • Advantage is that the customer can hone their preferences based on the advice and recommendations of the agent. • Disadvantage is inefficiency – very labor intensive. • Most airlines operated this way before the Internet. • Configuration (3) has the customer entering information via a website or via email and an airline agent calling back with results. • Advantage is the ability of the airline agent to explain the flight results to the customer. • Disadvantage is inefficiency of calling customers back. • This is an innovation – not aware of any airlines that currently operate like this. • Configuration (4) has the customers loading airline schedule data on their personal computers (perhaps in a massive spreadsheet) and searching for desired flights. • Advantage is the customer has high control over the search process, and can write their own search algorithms if desired. • Disadvantage is the customer will have to learn how to do this and will not have up-to-date seat availability and price information. • This is an innovation – not aware of any airlines that currently operate like this. PCN Analysis for team 0: Scott Sampson

36. Ch13. Analyze the Service Value Network How processes could be integrated: • Airport food service providers could bring a food cart with pre-packaged food to gate just before boarding starts, so passengers can have decent food to eat on the flight. The food could be non-messy and non-smelly. • Currency exchange services can be notified of the arrival of international flights to be prepared to assist with appropriate currency exchange at arrival gate. For example, a flight from New York to Europe might be met with a currency exchange employee prepared to convert dollars to euro. • Airlines can sell tickets to ground transportation (trains, subways, busses) on the flight to be used at the arrival gate, providing directions of how to find the transportation at the arrival airport. • Airlines could sell tickets to popular tours at destination cities on the flight, and provide customers with previews of the tours on in-flight multimedia. PCN Analysis for team 0: Scott Sampson