Journal of Business Research 57 (2004) 392 404

Blueprinting the service company

Managing service processes efficiently
Sabine Fliea,*, Michael Kleinaltenkampb,1
a
Lehrstuhl fur Dienstleistungsmanagement, Fern Universitat Hagen, Profilstr. 8, D-58084 Hagen, Germany
b
Institut fur Marketing/Weiterbildendes Studium Technischer Vertrieb, Freie Universitat Berlin, Otto-von-Simson-Str. 13/15,
D-14195 Berlin, Germany

Abstract

Service processes require the participation of the customer: Without the customer, service processes cannot take place. The fact that the
service provider is dependent on customer participation causes difficulties in managing service processes efficiently and effectively because
customers contributions can only be influenced by the provider up to a certain extent. The article will stress the management of service
process efficiency. Therefore, a production-theoretic view will be used to identify the sources of efficiency problems. Based on this approach,
we will differentiate between customer-induced and customer-independent activities for a better efficiency management. The well-known
blueprinting technique will be used in a revised version based on the production-theoretic approach to identify starting points for improving
process efficiency. Differentiating between three areas of process management, we will suggest measures of factor combination management,
information management and property rights management.
D 2002 Elsevier Inc. All rights reserved.

Keywords: Customer integration; Integrative value chain; Service management; Service efficiency; Production theory; Blueprinting

1. Customer participation and its impact on service
process efficiency
The most remarkable thing about service processes is that
they do not take place without the customer (Chase, 1978;
Corsten, 1988; Cowell, 1984; Gronroos, 1990; Hilke, 1989;
Hoffman and Bateson, 1997; Kurtz and Clow, 1998; Larsson
and Bowen, 1989; Lovelock and Young, 1979; Meffert,
1995; Meyer, 1993; Mills, 1985; Schneider and Bowen,
1983; Zeithaml and Bitner, 2000, p. 319). Before the supplier
can really start with the production and delivery of a service,
the customers requirements, above all, need to be specified.
For this aim, the service provider is dependent on the
customers information about the requirements the service
has to fulfill, where and how the service should take place or
should be used, etc. (Mengen, 1993; Krimm, 1995). More-
over, some service processes require the participation of the
customer during all or some service operations. As a cop-
roducer (Cowell, 1984; Edvardsson et al., 1994; Meyer and
* Corresponding author. Tel.: +49-2331-987-2534; fax: +49-2331-987-
4494.
E-mail addresses: sabine.fliess@fernuni-hagen.de (S. Flie),
michael.kleinaltenkamp@wiwiss.fu-berlin.de (M. Kleinaltenkamp).
1
Tel.: + 49-30-8385-2493/2494; fax: + 49-30-832-57-46.
Blumelhuber, 1994; Schade, 1995) or partial employee
(Bateson, 1985; Schneider and Bowen, 1983; Kelley et al.,
1992), the customer may take an active part in the service
operation, such as in self-service restaurants. Participation
can also be limited to a more passive form of involvement
(Eiglier and Langeard, 1999; Maleri, 1997), a requirement of
physical presence such as in surgery, a need for the customer
to be merely mentally present such as in education or the need
to start and stop a process such as in car repairs (Langeard,
1981; Hoffman and Bateson, 1997; Meyer, 1994).
From the service providers point of view, increasing
customer participation may lead to more efficiency, as the
customer carries out tasks that otherwise have to be carried
out by the suppliers employees (Hoffman and Bateson,
1997). However, increasing customer participation also
causes high demands on the providers service process
management: Missing, delayed or unqualified customer con-
tributions influence costs, time and tasks carried out by the
suppliers employees (Zeithaml and Bitner, 2000). Important
influences of customer contributions can be identified in the
following areas:
 Meeting customers requirements is dependent on cus-
tomers contributions, particularly on information given

0148-2963/$ see front matter D 2002 Elsevier Inc. All rights reserved.
doi:10.1016/S0148-2963(02)00273-4
 S. Flie, M. Kleinaltenkamp / Journal of Business Research 57 (2004) 392404
by the customer but also on the quality of customer
participation (Brentani and Ragot, 1996; Kelley et al.,
1992; Kurtz and Clow, 1998; Zeithaml and Bitner, 2000).
 Delayed customer contributions can cause bottlenecks and
capacity problems and lead to an overall delay of service
delivering (Corsten and Stuhlmann, 1997; Hoffman and
Bateson, 1997; Kleinaltenkamp and Marra, 1997; Kurtz
and Clow, 1998; Mudie and Cottam, 1999).
 Delayed and unqualified customer contributions, fur-
thermore, can cause additional costs, e.g. when new or
changed contributions are required (Maleri, 1997; Mudie
and Cottam, 1999).
 Changing or uncertain customer requirements can affect
service effectiveness as well as service efficiency (Mills
and Moberg, 1990, p. 105; Zeithaml and Bitner, 2000, p.
323).
To solve these problems, we can find a bunch of
different suggestions. From an operations management
perspective, naturally prevailing in efficiency management,
it is suggested to standardize, automate or mechanize
service processes (Northcraft and Chase, 1985), keep cus-
tomer involvement within limits (Chase, 1978), delegate
activities to the customer (Maister, 1982), or switch from a
professional service production approach to a job shop, a
batch process or an assembly approach (Bateson, 1990;
Levitt, 1972).
The operations management perspective can conflict
with the marketing perspective: Sometimes the customer
wants to participate to a larger extent in order to receive
customized or individualized services according to his
specific needs (Engelhardt et al., 1993; Lovelock, 1990)
and sometimes he/she likes to play an active part in service
processing (Zeithaml and Bitner, 2000). On the other hand,
the customer might not want to participate at all because s/he
has delegated the tasks to the provider or because s/he does
not have the time, necessary skills or knowledge to take
over these functions (Collier, 1987; Corsten and Stuhl-
mann, 1997).
Therefore, one of the most important goals in service
process management is to make sure that customer par-
ticipation takes place when, where and in the way it is
needed to operate efficiently without neglecting customer
satisfaction (Palmer and Cole, 1995). In order to achieve
this aim, we will introduce a production-theoretic approach
of service processes. This approach will be used to identify
three areas of potential inefficiencies in service processes:
(1) information management insufficiencies, (2) failures in
factor combination, e.g. the operation process itself, and
(3) incompletely defined property rights. The approach will
further be used to distinguish between two different kinds of
activities within a service process: customer-induced activ-
ities and customer-independent activities. It will be shown
that these different activities are connected to different
management tasks and, therefore, give new insights in
efficiency management.
393
In the second part of the article, we will combine the
production-theoretic approach with the well-known tech-
nique of blueprinting. Blueprinting is normally seen as a
heuristic method for analyzing and designing service pro-
cesses. Basing the blueprinting on a production-theoretic
approach, we will show that the introduction of a new line
will clarify points of departure for efficiency management.
In Section 3, we will suggest different actions in
information management, factor combination management
and property rights management for improving service
process efficiency by using the production-theoretic ap-
proach and the blueprinting technique as well.
2. A production-theoretic approach of service processes
As the customer is often viewed as a coproducer
(Cowell, 1984; Edvardsson et al., 1994; Meyer and Blu-
melhuber, 1994; Schade, 1995; Mills and Moberg, 1982) or
as a partial employee (Bateson, 1985; Schneider and
Bowen, 1983; Kelley et al., 1992), the vision of the cus-
tomer as a productive resource (Zeithaml and Bitner, 2000)
is not totally new. Some authors actually suggest that if
customers contribute effort, time or other resources to the
service production process, they should be considered as
part of the organization (Mills et al., 1983; Mills and Morris,
1986). From a production-theoretic approach, these sugges-
tions go too far. Based on this view and with reference to the
three dimensions of services (potential, process and out-
come) (Donabedian, 1980; Corsten and Hilke, 1994; Hilke,
1989), we can distinguish between two main stages of
service production (Corsten, 1985; Altenburger, 1980; Ger-
hardt, 1987).
The first stage refers to the service providers potential.
A providers potential comprises capacity factors (assets) as
well as commodity factors and provides the foundation on
which all value creation is based (Gutenberg, 1983). For a
bank, capacity factors consist of the buildings, computers,
software and employees, whereas commodity factors are
paper, pencils or energy. It may be that from time to time
finished and/or semifinished goods are produced in terms of
a speculative precombination (Schneider, 1993) of internal
production factors, i.e. production processes taking place
without specific customer orders having triggered them. The
goods resulting from such anticipative production runs, and,
as mentioned, varying in their degree of completion, to-
gether with capacity and commodity factors will then
become part of a supplier firms internal factors. Examples
for such precombinations in a bank may be the preparation
of information folders containing different kinds of leaflets
or the preparation of service product bundles for different
customer groups. So, the service providers potential typ-
ically consists of the service providers resources and
capacity ready to serve the customer.
The second stage of the service production activities
involves the customer in the service operation. From a
394 S. Flie, M. Kleinaltenkamp / Journal of Business Research 57 (2004) 392404
Fig. 1. Integrative value chain.
production-theoretic view, customer contributions can be
regarded as additional external production factors, which
need to be integrated in the service operations (Corsten,
1997; Maleri, 1997).2 In producing and delivering services,
external and internal production factors are combined and
form an integrative value chain (see Fig. 1) (Kleinalten-
kamp, 1997). The outcome of these activities, which is
finally passed on to the customer, in any case, will show
itself to be a bundle of goods and services.
The main difference between the first and second stages
of production is founded on the integration of external
production factors into the service operation. External
production factors can be grouped as follows (Engelhardt
et al., 1993; Kleinaltenkamp and Jacob, 1997):
 physical objects like a machine in need of repair, a piece
of land to be built on or a building to be cleaned
 human resources like employees of the customer who, in
systems selling, are regularly delegated to the project
management teams of the supplier, or like a customer in
need of a hair cut
 the utilisation of rights by a lawyer or a licensee within a
legal action
 nominal goods, which are placed at a banks or enter-
prises disposal with the aim of getting interest
 information used for production of services by an
advertising agency or a consultant
As can easily be seen, the customer is not a member of the
service providers organization but a contributor of addi-
2
Note that service production comprises all operations necessary to
deliver a service, including customer interaction, management activities and
service production operations in a narrower sense.
tional and necessary resources. Only in special cases, e.g.
hairdresser or medical diagnosis, the customer himself is
regarded as a resource.
External production factors contributed by the customer
differ from internal production factors by the following char-
acteristics (Kleinaltenkamp and Haase, 1999; Maleri, 1997):
. External production factors are put at the service
providers disposal by the customer, i.e. they cannot be
bought on the market.
. The service providers disposal of external production
factors is limited in time to the duration of the service
process, i.e. after finishing the service process, they have to
be returned to the customers.
. The service providers disposal is limited in scope
to certain property rights (Kleinaltenkamp and Haase,
1999), i.e. normally, the service provider is not allowed
to sell the customers external factors to somebody else,
as an individual customers external factors will be
integrated either as objects of the transformation activities
themselves (Carp, 1974; Gerhardt, 1987) or as means of
production that will at least facilitate these activities
(Mengen, 1993).In contrast to internal production factors,
which can be fully disposed by the service provider, the
service providers disposal on external production factors
is limited. Therefore, the first and second stages of pro-
duction differ not only by different kinds of production
factors (external and internal) but also call for different
management activities.
Activities within the first stage of production only
require internal production factors. They can be autono-
mously disposed by the service provider, which means that
they are independent of a specific customer. These activities
can be characterized as customer-independent activities
(Kleinaltenkamp, 1997; Flie, 2001).
 S. Flie, M. Kleinaltenkamp / Journal of Business Research 57 (2004) 392404
By integrating additional external factors, which are
delivered by the customer, the second stage of service
production, the service process, starts. These activities are
customer-induced, that is, they can only be carried out if
they are started by a customer; if they are started by
some external production factors, the customer is intro-
duced into the service process. The integration of external
production factors, e.g. the contact between the customer
and the service provider, constitutes the service process
and differentiates between service potential and service
process activities (Kleinaltenkamp and Haase, 1999;
Flie, 2001).
Customer-induced and customer-independent activities
have a different impact on service process efficiency be-
cause they are connected to different kinds of risk.
3. Efficiency management: balancing production and
market risk
3.1. Types of risks connected with customer-induced and
customer-independent activities
Basically, two types of risks can be distinguished:
production risk and market risk (Riebel, 1965). In its
extreme form, market risk arises in a situation where a
preproduced product cannot be sold because no customer is
interested in it. On the contrary, production risk refers to
a situation where a contract is made but the supplier
is not able to produce or to deliver the required good
or service.
Considering service companies, production risk and
market risk have to be taken into account in various degrees
(Engelhardt and Freiling, 1995). Production risk is mainly
connected to customer-induced activities, whereas market
risk is mainly connected to customer-independent activities.
Customer-induced activities are dependent on customer
participation, i.e. on the contribution of external production
factors. Production risk arises because customer contribu-
tions, i.e. external factors, not always fully meet the pro-
viders requirements.
While production risk is higher with customer-induced
activities, it is lower with customer-independent activities.
The reason can be seen in the kind of disposal the different
activities allow for: customer-independent activities are
based on production factors whose property rights fully
belong to the suppliers company. Customer-induced activ-
ities combine internal and external production factors. For
external production factors, the property rights belong to the
customers companies and are transferred only partly and
timely limited to the service provider. As Swartz et al.
(1992) state, managing customer behavior is problematic
because organizations typically have no formal authority
over them (unlike with employees).
Whereas production risk is mainly connected to cus-
tomer-induced activities, market risk is mainly linked to
395
customer-independent activities. Market risk arises when a
service provider does not know if he will find enough
customers for the services he offers. Market risk, therefore,
is particularly entailed to autonomously made decisions like
decisions on capacity, personnel qualifications or furnish-
ings of the premises. Customer-induced activities do not
cause market risks because the fact that the customer starts
the service process and participates in the service operations
by contributing his/her external factors normally means that
s/he has agreed to accept the service and pay for it: The
contract is made before production starts (Jacob, 1995).
Therefore, market risk is minimal.
3.2. Impact of production and market risk on efficiency
Production risk increases with the number of contact
points between customer and supplier because each contact
point means that additional external factors are introduced
into the service process (Flie, 2001). A special case among
the external factors is information. We can distinguish bet-
ween two kinds of information as external factors (Kleinal-
tenkamp, 1997): active or process information and passive
information or data. While passive information has no special
impact on the activities and is just passed and transformed
throughout the service process, active information steers the
flow of activities. It comprises all information about the cus-
tomers wishes, special needs, deadlines, preferred suppliers
and material and the like. Active information determines the
degree of customer integration, which means that it decreases
the part of autonomously disposed activities. As the supplier
cannot dispose external factors like internal production fac-
tors, especially the integration of active information, makes it
more difficult for the supplier to plan capacity and to direct
resources to their most efficient use (Corsten, 1997;
Schnittka, 1998), thus increasing the costs of service oper-
ations (Paul, 1998).
In order to manage service processes efficiency, it is
typically suggested to standardize or automate service pro-
cedures or to reduce the number of customer contact points by
delegating activities to the customer. However, and this is
already well known, these measures increase market risk,
cause inflexibility of service processes and if the company
does not manage to find enough customers for these unin-
dividualized, and therefore substitutable, service offers
also increase costs per process.
As production risk as well as market risk influence
costs and productivity, efficiency management obviously
should consist in balancing production and market risk
by balancing customer-induced and customer-independ-
ent activities.
As a first step, efficiency management, therefore, requires
to identify customer-induced and customer-independent
activities, as these activities are linked to production and
market risk. A method, which can serve this purpose, is a
revised version of the blueprint.
396 S. Flie, M. Kleinaltenkamp / Journal of Business Research 57 (2004) 392404
4. Identifying customer-induced and
customer-independent activities blueprinting
the service process
4.1. Blueprintingstages of development
Blueprinting is a method invented by Shostack (1982,
1984a,b, 1987) and developed further by Kingman-Brund-
age (Kingman-Brundage, 1989, 1993, 1995; Kingman-
Brundage et al., 1995) to visualize service processes.3 As
Zeithaml and Bitner (2000) put it, a service blueprint is a
picture or map that accurately portrays the service system so
that the different people involved in providing it can
understand and deal with it objectively regardless of their
roles or their individual point of view.
A blueprint can be regarded as a two-dimensional
picture of a service process: The horizontal axis represents
the chronology of actions conducted by the service cus-
tomer and the service provider. The vertical axis distin-
guishes between different areas of actions. These areas of
actions are separated by different lines. Blueprinting has
so far been applied to a wide range of different service
processes and has been used for different purposes. Con-
sidering the application of blueprinting during the last 15
years, three stages of development can be identified, each
stage adding new elements to the blueprint (see Fig. 2
based on Heskett et al., 1997; Kingman-Brundage, 1995;
Kingman-Brundage et al., 1995; Noch, 1995; Zeithaml and
Bitner, 2000).
Although blueprints of the third stage are not homoge-
nously structured (Zeithaml and Bitner, 1996), five key
action areas can be identified which are separated by four
horizontal lines (Kingman-Brundage and George, 1996;
Kingman-Brundage et al., 1995):
. The line of interaction separates the customer action
area from the supplier action area, representing the direct
interactions between customer and supplier. Above the line
of interaction, we find activities, choices and interactions
performed by the customer.
. The line of visibility differentiates between actions
visible and invisible to the customer. Above the line of
visibility, actions and decisions carried out by front office
employees are shown.
. The line of internal interaction distinguishes
between front office and back office activities. Support
processes, which are necessary to provide front office
employees in delivering the service, are carried out beneath
the line of internal interaction.
3
Lovelock differentiates between the terms service blueprinting
and service mapping. According to him, service mapping refers to the
portraying of an existing service process, whereas service blueprinting is
the technical term for the purpose of planning a new or revised service
process (Lovelock, 1996). In this paper, blueprinting will be used to
describe both purposes.
. The line of implementation separates between
planning, managing and controlling (management zone)
and support activities (support zone). Support activities are
directly related to the service process performed by the
contact personnel for a specific customer. Management
activities are also related to this specific service process
but can also be used to direct numerous service processes. In
the management area, activities like the allocation of
resources, the conduct of employee surveys or the prepara-
tion of revenue reports can be found. These activities also
take place while the service operations are conducted.
Kingman-Brundage et al. suggest to connect the cus-
tomers, the employees and the technical logic of services
in order to form an integrated system of service logic.
Customer logic refers to the customers role as consumer
and coproducer as well. Technical logic comprises the basic
principles that govern service production. Employee logic
contains the underlying rationale that drives employee
behavior (Kingman-Brundage et al., 1995). In the distinct-
ive service mapping format [. . .], the customer occupies the
top zone, management occupies the bottom zone and service
operations are sandwiched between them. Thus, service
maps literally show how service personnel manipulate
service components to bridge the gap between management
intent and customer demand. The service logic model
interprets the dynamics of this bridging activity (King-
man-Brundage et al., 1995). To understand customers logic,
the service blueprint is to be read from the top to the bottom
to understand managements logic and reading of the service
blueprint starts from the bottom and ends at the top zone
(Zeithaml and Bitner, 2000).
This last version of the service blueprint will be used to
be linked to the production theoretic approach of services.
4.2. The revised service blueprint: separating
customer-induced and customer-independent activities
The line of interaction, the line of visibility and the line
of internal interaction are adopted from Kingman-Brunda-
ges service blueprint. The areas between the lines comprise
the activities carried out by integrating the customers
external factors. Here, we find the customer-induced activ-
ities, i.e. activities that only can be carried out after having
been started by the customer or his/her external factors.
Beneath the line of internal interaction, a new line is
introduced: the line of order penetration (Kleinaltenkamp,
1999; Flie, 2001). In logistics, the point marking the
meeting of production and market risk is called the point
of order penetration (Jacob, 1995; Schnabele, 1997). This
idea can be transferred to the blueprint, calling the line
separating customer-induced from customer-independent
activities the line of order penetration. Since customer-
induced activities belong to the service process, whereas
customer-independent activities form the service potential of
the service company, the line of order penetration can also
be considered as separating the service companys potential
 S. Flie, M. Kleinaltenkamp / Journal of Business Research 57 (2004) 392404 397

Fig. 2. Stages of blueprint development.

from the service process. Activities above the line of order
penetration are customer-induced and are, therefore,
dependent on external production factors. Activities beneath
the line of order penetration are independent from a specific
customer and only rely on the service companys internal
production factors.
Activities, which take place within the customer-inde-
pendent area of service activities, can be further structured
in preparation activities and facility activities. Facility
activities provide the supplier with resources necessary to
produce the service. They refer to the assets or capacity
factors and the commodity factors of the first stage of the
production process (see Fig. 1). Storage of components and
material, purchase of equipment and other fixed assets and
employment are activities that belong to the facility area.
Preparation activities are those which are necessary to
put facilities into operation. They refer to the combination of
different internal production factors within the first stage of
service production (see Fig. 1). Maintenance of machines,
cleaning of premises and training of employees are typical

Fig. 3. Blueprint of a simplified acquisition process.

398 S. Flie, M. Kleinaltenkamp / Journal of Business Research 57 (2004) 392404
preparation activities. The line of implementation separates
the two areas. Fig. 3 contains a simplified version of a sales
process using the revised blueprint.
The main differences between the traditional blue-
print of Kingman-Brundage et al. and the revised blueprint
can be found in the following aspects:
. In the traditional blueprint, a service process can start
with management activities (Kingman-Brundage, 1995). In
the revised blueprint, a service process ex definitione starts
by integrating the customers external factors, i.e. a service
process is always set in motion by the customer and never
by the management.
. In the traditional blueprint, we find customer-induced
activities as well as customer-independent activities. In the
traditional blueprint, for example, the activity of developing
advertising and sales promotion is considered to be a
support activity and, therefore, is placed between the line
of internal interaction and the line of implementation (King-
man-Brundage, 1995). Referring to the production-theoretic
approach, the development of advertising and sales pro-
motion is customer-independent, i.e. it is not induced by the
customer. Therefore, in the revised blueprint, this activity
has to be placed below the line of order penetration. As it
requires the combination of different internal production
factors, it is considered a preparation activity.
So, the traditional blueprint does not differentiate between
customer-induced and customer-independent activities. It
rather shows different activities, carried out by different
persons or departments. Therefore, the traditional blueprint
refers to different responsibilities and to the organizational
structure of the service process. The revised blueprint shows
activities concerning the production structure of service
operations and refers rather to the value chain of services
than to the organizational structure of service operations.
Section 5 will show the three areas of efficiency
management, combining them with the production-theoretic
approach and the revised blueprint.
5. Areas of efficiency management
Failures in service process management are due either to
the service provider or the customer. Maybe, the service
provider did not procure or did not use the resources that
serve best (personnel, machines, software or orders) or did
not dispose it in the right way (e.g. capacity). These are
failures anchored in autonomously disposed activities. Fail-
ures can also be due to mismanagement in integratively
disposed activities, i.e. an employee does not serve the
customer properly, and finally, they can also be caused by
the customer who did not contribute the right quality or
quantity of external production factors at the right place or
in time, e.g. a customer missing his appointment with a
consultant engineer or a customer bringing the wrong
documents to the lawyer. These failures are mainly due to
mismanagement in combining internal and/or external fac-
tors. The first area of efficiency management can, therefore,
be regarded as factor combination management.
Failures because of insufficient customer contributions
are often caused by misinformation. The customer does not
know where, when and how to participate in the service
process. Information insufficiencies arise if the service
provider does not manage to communicate appropriately
to the customer. They also can be caused by customer-
independent activities, e.g. advertisements rising inappro-
priate expectations, or by customer-induced activities,
e.g. inappropriate or inadequate guidance of the customer
during the service process. The second area of efficiency
management can, therefore, be regarded as the information
management of service processes.
Inefficiencies in service processes in general and in
factor combination especially can also be based on insuffi-
ciently specified property rights concerning either the
external factors or the outcome of the service operation.
Property rights are especially crucial for knowledge-based
services. Is a consultancy company allowed to use the
information gathered from the customer during a service
operation for other service operations with different cus-
tomers, and if not, how can the customer prevent him to do
so? How can the service provider protect himself against the
new competition of experienced customers? As the third
area of efficiency management, the property rights manage-
ment of service processes can be identified.
Factor combination management, information manage-
ment and property rights management are not independent
from one another (Kleinaltenkamp, 1997). As the custom-
ers information is normally needed to combine internal and
external factors according to the customers needs and
wants, information management can be seen as an ante-
cedent of factor combination management, while the man-
agement of property rights is a process accompanying the
combination of internal and external factors.
Each of the areas stresses different aspects of efficiency
management a service provider can use to improve the
service process. In Section 5.1, we will show how some
measures of efficiency management relate to these three
areas. We, therefore, will continue to differentiate between
customer-induced and customer-independent activities and
connect our suggestions to the blueprint technique.
5.1. Increasing efficiency by information management
Services delivered can only meet the customers require-
ment at lowest costs if the customer and the service provider
know which resources and contributions are required. Some-
times, the customer even does not know which problem has to
be solved s/he is lacking problem evidence (Engelhardt
and Schwab, 1982). Sometimes, the customer does not know
why, where, when and how to participate in the service pro-
cess. S/He only has limited process evidence, which consists
of process awareness and process transparency (Flie,
1996b). Process awareness means that the customer knows
 S. Flie, M. Kleinaltenkamp / Journal of Business Research 57 (2004) 392404
that his participation is required during the service process
and that service production and delivery is dependent on his
external production factors. Process transparency means that
the customer has an idea how the service activities are carried
out and which part s/he plays. Process transparency, there-
fore, refers to the customers script of the service process
(Bateson, 1985; Corsten and Stuhlmann, 1997).
Process evidence refers to two dimensions: integration
evidence and factor evidence (Flie, 2001). Integration
evidence means that the customer does not know when
and where to participate in the service process, while factor
evidence refers to the situation that the customer does not
know how to participate, i.e. which external factors are
required. For example, the production risk of a management
consultant can be lowered if the customer delivers exactly
the information the consultant needs to analyze the compa-
nys situation, to reveal the competitive advantage and to
develop a suitable marketing strategy.
Service process evidence may not always be similarly
distributed between customer and supplier. We suppose that
depending on the degree of process and factor evidence
customer and supplier possess, four types of service pro-
cesses can be distinguished (Flie, 1996b).
Service processes of the first type are supposed to be
characteristic for innovative services where neither the
customer nor the supplier has the knowledge to direct the
service process without trial and error. Lead User projects
may be typical for this kind of service process (Kleinalten-
kamp and Staudt, 1991).
In service processes of the second type, the customer has a
knowledge advantage. S/He knows more exactly how the
service company should operate. In a situation like this, the
customer is likely to direct the service process and therefore
the service outcome. Service processes of this type can be
called customer directed. They are typically linked to a strong
supply management as we find in the automotive industry.
Service processes of the third type are opposite to service
processes of the second type. Here, the supplier knows more
exactly than the customer how, where and when the customer
will participate into the service operating system. This is
typical for a situation where the customer has never bought
the service before, whereas the supplier already has a great
deal of experience. They are called supplier-dominated
service processes.
The last type is the service process where customer and
service provider exactly know how to deliver the service.
This is true especially for mature service industries where
customers and suppliers scripts of the service process
already match. These service processes are well coordinated.
Changing the degree of customer participation can
increase efficiency with the third type of service and enlarge
effectiveness with the first type. It probably will not work
with service processes of the second type because the
customer will refuse to participate. Standardization always
has to take into account the expectations of the customer, the
importance of personal interaction for customer satisfaction,
399
customer involvement, the customers risk attitude and
situational influences (Gersch, 1995).
To increase process evidence, the service blueprint can
be used. The information flow between customer and
supplier can be improved by designing a service blueprint
together with the customereven in trial and error sit-
uations. So, both parties get an idea of the expectations
and concepts of the other party. The application of the
service blueprint will help to identify possible pitfalls, to
agree on milestones and to coordinate activities. In cus-
tomer- or supplier-dominated service processes, the blue-
print may help to integrate the other party, to show the
kind and time of customers contributions, to fix mile-
stones and to anticipate failures because of delayed
customer contributions.
Another possibility is to use the service blueprint for
redesigning the service process. Here, the service blueprint
serves as a planning tool. Especially, moving the line of
visibility may help to increase process evidence. Moving the
line of visibility means to inform the customer about the
different steps of the service process and to give him/her
insight in the service operation. However, note that increasing
the degree of visibility may not always be appropriate to
decrease production risk: If the customer gets more insight
into the service process, s/he may want to participate more
intensively as s/he now has a better impression of how his/her
contributions affect the service outcome. In this case, service
effectiveness is to weigh against service efficiency, as in-
creasing customer participation makes it more difficult for the
supplier to direct the service operation. So, moving the line of
visibility is only appropriate for those service operations,
which meet the customers service script and in which cus-
tomer contributions are easy to handle for the supplier.
However, information management does not only mean
to improve the flow of information between the customer
and the customer contact personnel but also inside the
service providers company. Therefore, the line of internal
interaction shows potential frictions in the internal flow of
information. The line of internal interaction can be used to
identify, specify and define the amount, kind and quality of
information needed while work is passing from one person
or department to another.
Finally, the blueprint as a picture of the service process
operations can be used to formulate specifications for soft-
ware programs supporting the information and work flow.
The different examples show that the blueprinting tech-
nique can be used as either a coordination instrument or a
planning instrument.
5.2. Increasing efficiency by factor combination manage-
ment
Efficient factor combinations are those which serve the
customers needs and wants at the lowest costs. Choosing
appropriate internal and external factors and combining and
directing them to their most efficient use are the main tasks
400 S. Flie, M. Kleinaltenkamp / Journal of Business Research 57 (2004) 392404
in factor combination management. To fulfil these tasks, the
service blueprint can be used in different ways.
It can help to choose suitable external factors and
integrate them into the service process. Every service
process requires certain external factors. The analysis of
the customer contact points at the line of interaction facil-
itates to specify the external factors requirements. Market
segmentation according to the characteristics of the required
external factors (Corsten, 1997; Schnittka, 1998) allows for
efficient factor combination management. Of course, this is
a supplier-dominated point of view. More customer-oriented
measures refer to qualifying and training customers (Gouth-
ier, 2000) or designing different service processes according
to the different characteristics of external factors and cus-
tomers, e.g. automated quick check-in procedure and check-
in at the counter in the usual way at the airport. As these
examples show, factor combination management and in-
formation management go close together.
The service blueprint can also help to improve factor
allocation by choosing and directing the appropriate internal
factors. In combination with complaint and satisfaction
analysis, it helps to identify bottlenecks and to highlight
the critical path in the service operations. For the most
important activities on the critical path, standards can be set.
These standards can refer to the time needed for different
actions (Zeithaml and Bitner, 2000) or to the quality of
certain activities.
In addition, input output ratios can be included to
evaluate the process and direct resources. Customer contact
points along the line of interaction are the most appropriate
starting points for such efficiency standards. For acquisition
processes, these measures already exist: The number of
inquiries, offers and orders are measures for customer
contact points. To evaluate productivity, ratios can be
formulated, e.g. the number of inquiries per service, person
or department. To find out if the process itself works
efficiently, the number of offers in relation to the number
of inquiries and the number of orders in relation to the
number of offers are taken as benchmarks. In order to plan
capacity more efficiently, we also can think about ratios of
activities above and beneath the line of order penetration.
Of course, the blueprint can help to redesign service
processes. As the improvement of efficiency in factor
combination management is also a matter of technology,
the blueprint can show where to substitute people by
machines and though how to standardize the service pro-
cess. In the blueprint terminology, standardization means to
move activities from the customer-induced area into the
customer-independent area, that is, from above the line of
order penetration beneath the line of order penetration.
Standardization can be applied to different objects. First,
customer contributions can be standardized (Gersch, 1995).
Of course, this is only possible if the external factors are
highly homogenous. An example are cash dispensers where
the external factors are information (name, account number,
etc.), which are stored on the bank card. The information
content differs from customer to customer (each customer
has a different account number), but the form of the
information (digits of the account number) is the same for
all customers.
If external factors differ highly, standardization can only
be reached by establishing homogenous customer supplier
interfaces (Flie, 2001). Toshiba, for example, uses a
software program where the customer himself can design
an ASIC by following certain steps within a menu, filling
in the necessary information and testing the developed
design (Kleinaltenkamp, 1996). Using software programs
or implementing service procedures on the internet goes a
step further than just standardizing external factors or
interfaces: it standardizes parts of the service process itself.
It, therefore, has an impact on service process design,
which can be located in the blueprint in the following
way. Standardization of external factors and interfaces
mainly affects the customer-induced activities but has a
minor impact on customer-independent activities as well. In
order to standardize interfaces, the design and implementa-
tion of integration tools has to be completed before
customer-induced activities take place. Standardization of
parts of the service process means that most of the activities
are not started and influenced by the customer any more
but that the sequence and kind of activities are determined
by the supplier before a customer enters the service
operations. Decreasing production risk by standardization,
therefore, means that more and more activities are moved
from the customer-induced area of the blueprint beneath the
line of order penetration into the customer-independent area
of the service company.
As customer-independent activities are autonomously
disposed, it is easier to reduce costs in this area because
customer-independent activities mostly are supposed to
consist of repeated actions. Repeated actions offer possibil-
ities for using economies of scale and for profiting from the
experience curve, thus lowering the costs per activity. On
the contrary, activities above the line of order penetration
should be evaluated according to the use of economies of
scope (Jacob, 1995). An empirical study undertaken by the
Weiterbildendes Studium Technischer Vertrieb of the Freie
Universitat Berlin comes to the conclusion that as far as
revenues and costs are concerned, a market offering ideally
should show a 20 30% degree of individualization, i.e.
services consisting of integratively disposed activities, while
70 80% of the offering, instead, may be made up of
standardized components based on autonomously disposed
activities (Jacob and Kleinaltenkamp, 1994).
It is evident that the service company loses flexibility by
standardizing its operations. Therefore, it has to weigh
flexibility against certainty in operation planning. The line
of order penetration can show the orientation of service
companies: towards flexibility and higher production risk
(more activities above the line of order penetration) or
towards certainty and lower production risk (more activities
beneath the line of order penetration).
 S. Flie, M. Kleinaltenkamp / Journal of Business Research 57 (2004) 392404
Another way to improve efficiency is to shift activities
from the service provider towards other participants in the
service process. Outsourcing can take place either in the
customer-induced areas, i.e. activities are shifted towards
the customer, or in the customer-independent area, i.e.
activities are shifted to subcontractors (Kleinaltenkamp et
al., 1997). Competitive advantages of a company can either
be based on customers benefits or on cost leadership
(Porter, 1980). If the competitive advantage is based on a
cost advantage, this advantage is supposed to be more likely
situated in the area of customer-independent activities,
whereas a benefit advantage would be expected in the area
of customer-induced activities. Customer-induced activities
are characterized by close customer contact so that the
supplier can win new insights into the customers processes.
His increased knowledge may use to develop new services
jointly with the customer as a lead user. Later on, these
services may be offered to additional customers as well.
Customer-induced activities may strengthen the service
suppliers core competence concerning the knowledge of
the customers processes and business. On the other side,
offering highly customized services require the core com-
petence of knowing customers needs, wants and processes.
Otherwise, the supplier may not be able to fully meet the
customers requirements.
Cost advantages, therefore, are supposed to lie in the area
of customer-independent activities. To increase cost lead-
ership, service suppliers can think about rationalisation,
automation and outsourcing customer-independent activities.
Considering outsourcing potentials of customer-independent
activities, the service blueprint can also be used to link the
actions of the service provider and its subcontractors.
Shifting activities towards the customers can be com-
bined with the standardization of external factors and/or
interfaces. If the customer takes over actions that have been
carried out by the supplier before, the interface must be clear
and the supplier must be sure that the customers contribu-
tions do not affect the service outcome in a negative way.
Besides, the supplier has to take into account that customers
can differ in their desire to participate in service operations
(Hilke, 1989; Lovelock and Young, 1979; Marion, 1996;
Schade, 1996).
Increasing the degree of activities taken over by the
customer, on the contrary, can lead to higher costs for the
service company. Customers must be willing to pay for more
performance. Otherwise, a changing degree of customer
integration has a negative impact not only on cost structure
but also on competitive advantage and service positioning. A
prerequisite for changing the division of labor between
customer and supplier is that customer and supplier possess
similar knowledge about how to perform the necessary
activities. Otherwise, taking over activities from the customer
may increase production risk instead of decreasing it.
Considering production risk and cost management of
service activities, we also can derive conclusions for the
organization of service companies (Kleinaltenkamp and
401
Jacob, 1997). Contemporary concepts of organizational
design demand a departure from traditional types of organ-
ization that rely on vertical structures comprising strong
hierarchical elements (Hammer and Champy, 1994). The
decision on how much of a horizontal organization a firm
should implement or on how much of its vertical structures it
should retain is a direct function of the decision on the extent
of customer-induced activities. This is because horizontal
structures provide the most appropriate form of organization
for processes underlying customer integration. Processes that
relate to a firms potential for value creation provide oppor-
tunities to benefit from specialization and hierarchical struc-
tures. As a general suggestion, activities beneath the line of
order penetration are to be organized within vertical hier-
archical structures to benefit from specialization, whereas
activities above the line of order penetration are to be
organized in horizontal structures to benefit from individu-
alized solutions and to strengthen the knowledge potential of
the company (Kleinaltenkamp and Jacob, 1997).
5.3. Increasing efficiency by property rights management
Property rights (Alchian and Demsetz, 1972) are crucial
in two ways: First, as mentioned above, the suppliers
property rights of external factors are limited. The extension
and content of these property rights have to be specified, at
best at the beginning of the service process. Second, as
production and consumption of services take place at the
same time, property rights of the outcome are shaped and
transferred during the service process, mainly by transfer-
ring information. If this ongoing process is not watched
properly, neither the customer nor the supplier will get what
they expected.
Normally, property rights are fixed within a contract.
However, as Macneil (1978) made clear, contracts are
normally incomplete. This is especially true for services,
as, in many cases, the object of the contract is created during
the service process. For this reason, additional integration
and coordination tools are needed to shape and fix property
rights in order to make sure that the service process still
meets the parties requirements.
An exploratory study of 14 case studies from different
fields of business-to-business-marketing (e.g. customized
software programs, development and implementation of
telecommunication networks and customized X-ray unit)
revealed that integration tools like design check sheets, letters
of intent, tenders, inspection and release of designs can serve
this purpose (Flie, 1996a). The characteristic of these tools is
that they confirm the outcome of the actions taken so far and,
therefore, build the base for the next steps of the process. A
very good example is the work of an advertising agency,
where during the production process of an image brochure,
the customer has to release the layout, the text, the
graphics, the prints, etc., so that the advertising agency
can always be sure that for each task the external factors
have accurately been combined with their internal factors.
402 S. Flie, M. Kleinaltenkamp / Journal of Business Research 57 (2004) 392404
6. Conclusion
Efficiency in service processes can not only be reached
by standardizing or automating service activities but also by
directing internal and external production factors in a better
way. Therefore, three areas of efficiency management can
be identified: information management, factor combination
management and property rights management.
As has been shown above, the revised blueprint, based on
a production-theoretic view, can be used as an analytical tool
and as a coordination and planning instrument as well.
Especially, the distinction between customer-induced and
autonomously disposed activities does not only help to
design new service processes and to improve efficiency of
actual service processes. Furthermore, it enables the service
provider to make decisions that are strategically important. It
helps to locate possibilities for attaining and maintaining
competitive advantages, to design the organizational struc-
ture and to plan the cost structure of the company. In
connection with instruments of modern accounting as activ-
ity-based costing, it enables the service management to
improve the companys efficiency.
The blueprint approach can be applied not only to the
service providers company but also, in case of business-to-
business services, to the customer companys as well. A
similar blueprint containing the customers activities during
the service process can be drawn in order to facilitate and
improve the supplier customer interface.
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