SERVICE OPERATIONS MANAGEMENT

Transcription

1 SERVICE OPERATIONS MANAGEMENT IAV200 Perspectives On Services.. There are no such things as service industries. There are only industries whose service components are greater or less than other industries. Everybody is in service. Theodore Levitt, Marketing Guru 1

2 Perspectives On Services You can duplicate the airplanes. You can duplicate the gate facilities. You can duplicate all the hard things, the tangible things you can put you hands on. But it s the intangibles that determine success. They re the hardest to duplicate, if you can do it at all. Herb Kelleher, Airline Executive The Nature of Services Societal evolution: Pre-Industrial Industrial Post-Industrial Large and increasing sector of organised economy A definition of Service Package: A bundle of explicit and implicit benefits provided using facilitating goods and with a supporting facility. 2

3 The Service Manufacturing Pure Product Pure Service Spiritual (Ayurvedic) Healing/ Treatment Legal/Tax Consulting Cyber Café Telephone Booths Emergency Maintenance Services Facilities Maintenance High quality restaurant meal Fast food in a eat out joint Customised durable goods Fast moving commodities Vending Machines Based on Text Fig. 1.1 (Adapted from Operations Management by Hill, T., 2005) The Service Operations Challenge Intangibility Non-inventoriability/ Perishability (output/capacity) Simultaneous Production and Consumption Customer Presence/ Participation Heterogeneity/ Variability Service Worker Capabilities Everybody s an Expert 3

4 A Couple of Service Operations Classifications 1. Customer Contact Based Low Contact Medium Contact High Contact Buffered Core Permeable System Reactive System Sales Opportunity Production Efficiency 4

5 1. Contact-Based Classification Degree of customer/server contact High Buffered core (none) Permeable system (some) Reactive system (much) Low Sales Opportunity Mail contact Internet & on-site technology Phone Contact Face-to-face tight specs Face-to-face loose specs Face-to-face total customization Production Efficiency Low High Service-system Design Matrix 2. The Service Process Matrix Degree of Standardization Customized Standardized Quasi- Manufacturing Service/ Custom Shop Back Room Mass Service Professional Service Front Office Location of Main Value Addition 5

6 SERVICE DESIGN Basic Choices & Approaches (not mutually exclusive) Design Issues in Services Value apportionment between Explicit/ Implicit benefits provided by service itself and by facilitating goods/ supporting facilities Design Considerations: Function/ Form/ Production Product/ Process Design not separable Design of procedures for creation/ exchange of materials, information, advice, money etc. 6

7 Service Design Choices Degree of Standardization/ Customization Degree/ Stages of Customer Involvement Work partitioning between Back Room and Front Room Balance sought between Efficiency, Flexibility & Sales Opportunity Production Line Approach Service Standardization Division of Labour Limited Discretionary Action of Personnel Substitution of Technology/ Systems for People (The Technocratic Hamburger - Theodore Levitt) 7

8 Customer As Co-producer/ Participant Approach Substitution of Customer Effort for Provider s May be at one or more stages of the value chain, e.g. Design, Delivery, or both Involving Customers in Smoothing Service Demand also a supply/ demand matching approach Either way, customer must be willing to participate in creation/ delivery of the service, or in determination of its timing 8

9 Information Technology Based Approach Information Empowerment: Employee Customer Deployment of Information Technology for: Productivity Enhancement, e,g., Inventory Status Revenue Generation, e.g., Yield Management Customer Lock-in/ Barriers to entry, e.g., Club/ Reservation systems Database Asset,e.g., Micro-marketing 9

10 The USA Principle UNDERSTAND SIMPLIFY AUTOMATE Existing processes Processes by eliminating waste Simplified processes through by using Process Mapping Diagramming Brainstorming Eliminating Combining Rearranging Operations Technologies, EDI/ Internet etc. Simplify before Automating, otherwise you Simply Automate Waste. - Shigeo Shingo, Japanese Manufacturing Guru Designing Services With Queues 10

11 Murphy On Queues The other lines move faster. The longer you wait in line, the greater the likelihood that you are standing in the wrong line. If you change lines, the one you just left will start to move faster than the one you are now in. Switching back screws up both lines and makes everybody angry. Designing Services With Queues The Psychology of Waiting Lines Unoccupied time feels longer than occupied time. (That Old Empty Feeling) Pre-process waits feel longer than in-process waits. (A Foot in the Door) Anxiety makes waits seem longer. Uncertain waits seem longer than known, finite waits. (The Light at the End of the Tunnel) (Lovelock, Services Marketing ; Larson, The Waiting Line Blues ) 11

12 Designing Services With Queues The Psychology of Waiting Lines Unexplained waits seem longer than explained waits. (Just What Is Going On?) Unfair waits feel longer than equitable waits. (Excuse Me, But I Was First) Solo waits feel longer than group waits. (We re All In It Together) The more valuable the service, the longer the customer will wait. (Lovelock, Services Marketing ; Larson, The Waiting Line Blues ) 12