Module: OPM 582 Case Studies in Service Operations Management

Transcription

1 Module: OPM 582 Case Studies in Service Operations Management Contents: Services are the largest and fastest growing segment of our economy. However, services pose particular challenges to managers due to their intangible and experiential nature, timeperishability, and high levels of customer involvement. Accordingly, managing services requires tight integration between operations, marketing, strategy, technology, and organizational issues from an integrated viewpoint with a focus on the customer in order to gain competitive advantage. This course reviews managerial concepts and selected analytical tools for effectively and efficiently managing service operations in face of these challenges. In particular, we will explore the theory by applying it to various cases studies of firms covering a broad range of service industries, such as transport and communication, retailing, hospitality, professional services, e-services, as well as service functions of the manufacturing sector. Case topics will be allocated at the beginning of the course based on student preferences. Students will work in teams of two on the assigned case. Learning outcomes: Students will intensify their understanding of operations and service operations management by applying concepts and analytical tools in a broader, interdisciplinary and strategic context to practical case studies. The course should be useful for anyone with an intention of going into professional services such as consulting; into industry (service or manufacturing), where the importance of managing service processes is increasing every day; or with a desire to set up their own service business. Prerequisites: Formal: Successful application as described below. Recommended: Participants should be familiar with the fundamentals of operations management and service operations management. Furthermore, students need a basic knowledge in mathematics (including linear programming) and in statistics (probability distributions). Obligatory registration: yes Further Information on the registration: Max. 20 participants Courses Hours per week Self-study ECTS Lecture & Exercise class Exercise class ECTS in total 6 Form of assessment Lecturer/Person in charge Duration of module Offering Assignment(s)/work on case studies (in teams), final presentation, class participation Prof. Dr. Cornelia Schön 1 semester Fall term

2 Language English Program-specific educational goals LG 2, LG 4, LG 5 Range of application Session Schedule: Mannheim Master in Management, M.Sc. Business Education, M.Sc. Business Informatics, M.Sc. Business Mathematics, Diploma Bus. Adm., M.Sc. Econ. Sessions will take place in SO 318 on the following dates (B2 + B3): Kick-off & theory Theory Theory Help sessions (discussion and guidance of individual work) Final presentations Final presentations Final presentations Attendance for the final presentations is mandatory. For your presentation, your team will take on the role of consultants presenting to a management board consisting of another team which should critically review the analysis and the recommendations of the consulting team. The assignment of topics to management boards will be done by the instructor along with the allocation of topics to consulting teams. In addition to the presentation, each team has to submit a written report on the case of around 15 pages. Registration: For this course, work is done in teams of 2 (any exception only upon request). Registration for this course is obligatory. In order to register, please do the following: (1) As an individual, sign up to the according ILIAS group, and (2) As a team, send an with the subject line "Registration OPM 582" to soma@mail.uni-mannheim.de by Sept. 9 th, 2014 with the following information: Basic data for both team members: name, matriculation number, program of study, semester, any modules in Operations Management that you have already completed successfully during your bachelor or master studies at the University of Mannheim or elsewhere any Operations modules OPM 5xx or 6xx that you are attending in parallel in HWS14. Topic preferences of the team: Rank your team s three most preferred topics by allocating 100 points among them. Each of the three topics must receive a positive score and any two topics should have different scores.

3 Example: Valid allocation: Topic 8: 60 points, Topic 5: 30 points, Topic 6: 10 points Invalid allocation: Topic 8: 90 points, Topic 5: 10 points, Topic 6: 0 points Invalid allocation: Topic 8: 80 points, Topic 5: 10 points, Topic 6: 10 points. Allocation of topics will be announced by Sep. 11 th based on team preferences, and in case there are more applications than topics based on FCFS. Therefore, please note that your registration is binding.

4 Topics Topic 1: Manzana Insurance: Fruitvale Branch The case deals with performance assessment and improvement of a service operation in the insurance industry, a market that is highly sensitive to response time. Two branch offices in direct competition are described, and the impact of response time on performance is suggested. Management choices that impact response time are explored and the poorer performer of the two branches must decide how to respond. Subjects covered: Capacity planning; Competition; Performance measurement; Process analysis; Quantitative analysis; Service management Topic 2: JetBlue Airways: Deicing at Logan Airport The case explores a deicing capacity expansion decision made by JetBlue at Boston Logan International Airport in the summer of The need for capacity expansion was driven by significant challenges faced during the previous winter combined with substantial scheduled growth for the upcoming winter. The case allows readers to explore the impact of demand variability on delays as demand approaches capacity. This provides an opportunity to introduce and/or reinforce Little's Law in a service context. Additionally, the context of the airline industry allows students to explore how delays and disruptions rapidly propagate throughout the system in a network of operations. Subjects covered: Capacity planning; Operations management; Process analysis; Scheduling Topic 3: BAT Case: Putting Tech Support on the Fast Track Bruce-Alfred Technologies (BAT) has built a successful business selling packaged software. Its marketing has long promised free technical support to all customers, a key point of differentiation from BAT's competitors. However, the call center providing tech support is now in crisis. Wait times for callers are unacceptably high, leading to low customer satisfaction and negative press. BAT managers are evaluating the Fast Track Proposal, which would create two classes of calls. Fast Track calls would be promised a one-minute wait but pay for service. Standard calls would still be free but be given lower priority and have no wait time guarantee. Considers both the operational impact of this change and the strategic considerations of backing away from free tech support. The case shows the impact of priorities and alternative ways of managing capacity, allows to discuss different ways of pricing services--i.e., pay-per-transaction vs. subscription, and demonstrates the basics of the relation between utilization and delay. Subjects covered: Customer service; Economies of scale; Marketing; Operations management; Pricing

5 Topic 4: Shouldice Hospital Limited Various proposals are set forth for expanding the capacity of the hospital. In assessing them, serious consideration has to be given to the culture of the organization and the importance of preserving it in a service delivery system. In addition to issues of capacity and organizational analysis, describes a well-focused, well-managed medical service facility that may well point the way to future economies in the field. Subjects covered: Capacity planning; Expansion; Market segmentation; Organizational behavior; Quality management; Social enterprise; Word-of-mouth marketing Topic 5: SAP 2014: Reaching for the Cloud In May 2014, Bill McDermott will become the sole CEO of SAP AG, the world leader in the Enterprise Resource Planning (ERP) field. The case occurs in January 2014 at SAP's investors meeting, at a time when the company's stock is near record high. A 2010 strategy committed the company to a transition to cloud computing. The main driver behind this transition was the development of SAP HANA, an in-memory computing technology that combined database, data processing, and application platform functionality. Ownership of cloud infrastructure was a key question. SAP could build, own, and operate its own data centers, or partner to locate SAP HANA and other products with other cloud infrastructure providers, such as Amazon, Microsoft, or IBM. McDermott also had to make decisions around the organization and leadership of the company's cloud efforts. Subjects covered: Execution; Information technology; Leadership; Operations management; Platforms; Software development; Strategy Topic 6: Lean Transformation at Global Connect Global Connect, a major telecommunications service provider, partners with national cable providers to bundle media and telecom services offered through voice over Internet protocol (VoIP). Global Connect provides the VoIP physical infrastructure that enables cable providers to offer VoIP phone service to their end customers. VoIP cable services are growing at a faster rate than anticipated, leaving Global Connect incapable of meeting contractual agreements with the cable partners and preventing them from capturing substantial VoIP market opportunities. Students are asked to improve the configuration of work at this service organization by identifying the types of waste in the current process. Process improvements use lean tools and their impact is quantified using time and capacity analysis. Subjects covered: Lean service operations, Capacity analysis Topic 7: Starbucks: Delivering Customer Service Starbucks, the dominant specialty-coffee brand in North America, must respond to recent market research indicating that the company is not meeting customer expectations in terms of service. To increase customer satisfaction, the company is debating a plan that would increase the amount of labor in the stores and theoretically increase speed-of-service. However, the

6 impact of the plan (which would cost $40 million annually) on the company's bottom line is unclear. The case allows to explore the various meanings of the concept of "service" in the context of a company that is evolving in terms of both size and the composition of its customer base and to look at the links between "customer satisfaction" and a company's sales and profitability. Subjects covered: Customer retention; Customer service; Market research; Profitability Topic 8: Half a Century of Supply Chain Management at Wal-Mart A stock analyst is preparing a recommendation on what his firm, a large U.S. investment house, should do with its stake in Wal-Mart Stores, Inc. Wal-Mart, the world's largest retailer, was trying to recover from a series of missteps that had seen competitors such as Dollar Stores and Amazon.com close the performance gap. Competitors had copied many aspects of Wal-Mart's distribution system, from cross-docking product to eliminate storage time in warehouses, positioning stores around distribution centres, and widespread adoption of electronic data interchange (EDI), to manage ordering and shipping from suppliers. Subjects covered: Retailing services; Competitive advantage; Operations research; Scheduling; Suppliers; Supply chain management; Sustainability Topic 9: Service Process Design for Malawi s Pizza This case deals with improvement and adaption of a service operation in a catering business. Malawi s Pizza is introduced as a start-up-franchise with origin in the restaurant field and expansion plans for their catering service. Combining quality pizza with a donation policy (one meal per pizza sold is donated to children in Malawi) has made them very popular in their business area. To support their expansion plans, processes affecting the service experience need to be analyzed. In addition, new ways of delivering this service to the customer need to be found. Subjects covered: Service adaption; New service design; Operations management; Process analysis Topic 10: Apollo Hospitals: Differentiation through Hospitality Dr. Ananth Rao, who heads the Quality Department at Apollo Hospitals, Bangalore, had undertaken initiatives to measure and benchmark the hospitality services at the hospital. Inpatients spend around 80% of their time under the care of the staff from different departments such as nursing, housekeeping, food & beverages, operations, and so on. The Quality team at Apollo Bangalore received 1,434 complaints from the 1,38,600 in-patients treated between March 2011 and December The feedback was generally open-ended, in the form of patients' comments, opinions, or suggestions. Of the 1,434 complaints received, the housekeeping department received the maximum number of complaints, while the dietary service had the least number. Some of the complaints were genuine concerns, while some were related to minor discomfort. Some of the complaints were very specific, while some were generic.

7 All of these were analyzed, which would enable the hospital to work towards reducing the overall number of complaints. Text analytics was used to analyze the open-ended complaints. In order to gain deeper insights, "Defect-Defective" techniques were used to identify the processes that caused the defects. The processes were re-engineered to eliminate all the defects and a pilot study was done using the "Define Measure Analyse Improve and Control" (DMAIC) cycle. Dr. Rao and his team have developed benchmarks for several common complaints with three levels of service by adopting the Kano model. Critical to Quality (CTQ) metrics have been defined and Sigma levels were calculated for each CTQ. Dr Rao is pondering on what is a good Sigma score target to set given the importance of hospitality in Apollo Hospitals. Subjects covered: Lean and Six Sigma in services; Service quality; Service process analysis