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Service Operations Management

Utility-based Service Design. Perceived utility to customer. Relative ... Defining service quality is more difficult than defining manufacturing quality. ...

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Service Operations Management

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    Slide 1:Service Operations Management

    Slide 2:Fundamentally, there are no differences between service and manufacturing operations! Both are concerned with: Efficiency Effectiveness Quality Cost

    Effectiveness Right prescription Right advice Service availability Efficiency No. of servers Use of resources Quality Training Error prevention Continuous Improvement Cost Inventory management Tradeoffs Purchasing

    Slide 4:Service Operations Management Selected Issues

    New service development Managing service experiences Front-office/Back-office Analyzing processes Service quality Yield management Inventory management Waiting time management

    Slide 5:New Service Development

    Service Blueprinting Focus on moments of truth Servicescapes Utility-based Service Design Perceived utility to customer Relative importance of Dimensions of Service Quality

    Slide 6:Service Blueprinting

    Source: Metters, King-Metters, Pullman, & Walton, p. 84

    Slide 7:Utility-based Service Design

    Source: Metters, King-Metters, Pullman, & Walton, p. 88

    Slide 8:Dimensions of Service Quality

    Reliability Responsiveness Assurance Empathy Tangibles Parasuraman, et al., 1985 ACSI Site: http://www.theacsi.org/index.php?option=com_content&task=view&id=15&Itemid=172

    Slide 9:Managing Service Experiences

    Customer Engagement Context Time Service Blueprinting Focus on moments of truth

    Slide 10:Front-office/Back-office

    Front-office work requires customer presence. Back-office work does not require customer presence. Decoupling: separating work into high-contact/low-contact jobs. Ultimate = outsourcing/offshoring

    Slide 11:Analyzing Processes

    Process flow diagrams (flow charts) Process communication Focusing mgt. attention on customer Determining what to work on Process Simulation

    Slide 12:Service Quality

    Defining service quality is more difficult than defining manufacturing quality. Expectation vs Perception Expectation vs Performance

    Slide 13:Gaps in Service Quality

    Source: Metters, King-Metters, Pullman, & Walton, p. 186

    Slide 14:Developing a Culture of Service Quality

    Hire the right people. Educate and train them well. Allow them to fix anything. Recognize and reward them regularly. Tell them everything, every day.

    Slide 15:Service Recovery

    Measure the costs Listen closely for complaints Anticipate needs for recovery Act fast Train employees Empower front line Close the loop

    Slide 16:Yield Management

    Purpose is to sell the right capacity to the right customer at the right price. Overbooking Differential pricing Capacity allocation

    Slide 17:Inventory Management Service vs Manufacturing

    Setup/Ordering costs high Number of products higher Limited shelf space Lost sales vs backorders Product substitution Demand variance higher Information accuracy (complication of customers)

    Slide 18:Waiting Time Management

    Waiting lines are pervasive in services The problem is important Lack of management intuition about waiting lines 15/30 Waiting Time Rule in hospital ER

    Slide 19:References

    Fitzsimmons & Fitzsimmons (1998). Service Management 2ed., Irwin/McGraw-Hill. Metters, King-Metters, Pullman, Walton (2006). Successful Service Operations Management 2ed., Thomson. Nelson. (2005). “Baldrige—Just What the Doctor Ordered.” Quality Progress. Sower, Duffy, Kohers, et al. (2001). “The Dimensions of Service Quality for Hospitals…” Health Care Management Review.

    Slide 20:MGT 568 Service Management & Marketing

    MGT 568 is a team-taught course available as a graduate elective.

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