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ISM 270

ISM 270. Service Engineering and Management. ISM 270: Service Engineering and Management. Focus on Operations Decisions in the Service Industry Open to students with an undergraduate engineering/science degree Learn analytical tools and software for decision making

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ISM 270

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  1. ISM 270 Service Engineering and Management

  2. ISM 270: Service Engineering and Management • Focus on Operations Decisions in the Service Industry • Open to students with an undergraduate engineering/science degree • Learn analytical tools and software for decision making • Featuring guest lectures from industry practitioners • Text: Fitzsimmons & Fitzsimmons ‘Service Management’ Operations, Strategy, Information Technology

  3. Topics covered • The nature of service enterprises • Strategy for new service development Technology in services • Quality in service encounters • Forecasting demand • Managing service capacity • Supply chains in services • Globalization and outsourcing

  4. Skills / Tools Learned Programming Tools • Spreadsheet Programming • Optimization Solvers • Littlefield Management Simulation Analytical Methods • Linear Programming • Data Envelopment Analysis • Statistics for Forecasting • Capacity Management and Queueing Theory • Project Management Under Uncertainty • Theory of Service Supply Chains

  5. Sample Project Utilizing statistics for web service development

  6. ISM 270: Details • 6 – 9pm, Thursday evenings • January6– March9(Winter) 2010 • UCSC Silicon Valley Center and/or Basking Engineering room 156 • Instructor: Kevin Ross • kross@soe.ucsc.edu

  7. Who is here? • My background • Brief introductions, student survey

  8. Logistics • Location • Class website • Readings • Text book • Office hours • 5-6pm before class, or by appointment • Fee for Simulation Game (~$20)

  9. Class Plan • Allotted class time = 3 hours • Average adult attention span = 20 minutes • … • Lecture / visitor / lab / split

  10. Computer issues • Who has a laptop? • Web access • Finding research papers • Excel, solver, …

  11. Please… • Bring: • Paper, pen, laptop, … • Opinions • Questions • Interesting articles, stories, anecdotes • Provide feedback!!! • Make every effort to keep up with readings etc.

  12. Schedule

  13. Assessment

  14. Sample Previous homework: Applying the Excel solver tool for data envelopment analysis (DEA)

  15. Sample Previous Homework 2: use AJAX calls to build a mashup with the Google Maps API

  16. Sample Previous Homework 3: learn to use SAS Enterprise Miner

  17. Project • More details later… • Focus on new service development • Written and Verbal Presentation at final class March9

  18. Questions and Break

  19. Remaining in Lecture 1 • Services in the Economy • Data Envelopment Analysis • Linear Programming • Excel

  20. Perspective • World-wide trends • Personalization trends

  21. Text Chapter 1:Role of Services in an Economy Service Management Professor James Fitzsimmons University of Texas at Austin

  22. Quiz Question • Name the top 10 USA companies by revenue in 2010 • How many would you describe as service companies?

  23. Top 10 Fortune 500 Revenue ($m) Profit ($m) 1 Wal-Mart Stores 408,214.0 14,335.0 2 Exxon Mobil 284,650.0 19,280.0 3 Chevron 163,527.0 10,483.0 4 General Electric 156,779.0 11,025.0 5 Bank of America 150,450.0 6,276.0 6 ConocoPhillips 139,515.0 4,858.0 7 AT&T 123,018.0 12,535.0 8 Ford Motor 118,308.0 2,717.0 9 J.P. Morgan Chase 115,632.0 11,728.0 10 Hewlett-Packard 114,552.0 7,660.0

  24. Definitions • What are services? • Service enterprises?

  25. Service Definitions Intangible goods? Services are deeds, processes, and performances. Valarie Zeithaml & Mary Jo Bitner A service is a time-perishable, intangible experience performed for a customer acting in the role of a co-producer. James Fitzsimmons Folks doing things for folks for Money Paul Magio

  26. Definition of Service Firms Service enterprises are organizations that facilitate the production and distribution of goods, support other firms in meeting their goals, and add value to our personal lives. James Fitzsimmons

  27. Services Science, Management and Engineering …the application of science, management, and engineering disciplines to tasks that one organization beneficially performs for and with another • (Wikipedia)

  28. Role of Services in an Economy

  29. Percent Employment in ServicesTop Ten Postindustrial Nations 1-29

  30. Quinary (Extending Human Potential): Health, Education, Research, Arts, Recreation Quaternary (Trade and Commerce): Transportation, Communications, Retailing, Finance, Government Tertiary (Domestic Services): Restaurants, Hotels, Laundry, Maintenance Secondary (Goods-Producing): Manufacturing, Processing Primary (Extractive): Agriculture, Mining, Fishing, Forestry Stages of Economic Activity 1-30

  31. Trends in U.S. Employment by Sector 1-31

  32. Stages of Economic Development Pre- Use of Standard dominant Human Unit of of Living Society Game Activity Labor Social Life Measure Structure Technology Pre- Against Agriculture Raw Extended Sub- Routine Simple hand Industrial Nature Mining muscle household sistence Traditional tools power Authoritative Industrial Against Goods Machine Individual Quantity Bureaucratic Machines fabricated production tending of goods Hierarchical nature Post- Among Services Artistic Community Quality of Inter- Information industrial Persons Creative life in terms dependent Intellectual health, education, recreation 1-32

  33. Percent Distribution of U.S. Employment by Industry 1-33

  34. All Industry Average Manufacturing Agriculture and mining Federal government Retail and wholesale trade State and local government Information Transportation and utilities Construction Other services Leisure and hospitality Financial services Educational services Professional and business services Health care and social assistance -20% -10% 0% 10% 20% 30% Projected Percent Change in U.S. Employment by Industry 1-34

  35. Economic Evolution 1-35

  36. The Four Realms of an Experience 1-36

  37. Experience Design Principles • Theme the Experience (Forum shops) • Harmonize Impressions with Positive Cues(O’Hare airport parking garage) • Eliminate Negative Cues(Cinemark talking trash containers) • Mix in Memorabilia (Hard Rock T-shirts) • Engage all Five Senses (Mist in Rainforest) 1-37

  38. Typology of Services in the 21st Century 1-38

  39. Source of Service Sector Growth • Information Technology (e.g. Internet) • Innovation Push theory (e.g. Post-it) Pull theory (e.g. Cash Management) Services derived from products (e.g. Netflix) Exploiting information (e.g. Auto part sales) Difficulty of testing service prototypes • Changing Demographics Aging of the population Two-income families Growth in number of single people Home as sanctuary 1-39

  40. Product Services A B Physical 6% 37% 31% Information 10% 63% 53% C D 84% 16% Distribution of GDP in the US Economy 1-40

  41. Question:What has engineering got to do with all of this?

  42. Discussion Topics • Describe the work that you do from a service perspective • Illustrate how the type of work you do influences a person’s lifestyle.

  43. Example Service Innovation: Disney World • Link

  44. Lessons from Disney

  45. Data Envelopment Analysis (DEA) • Method for evaluating efficiency of similar venues/products • Incorporates inputs and outputs – not just one dimensional • Uses LINEAR PROGRAMMING (LP)

  46. Sample LP: Product Mix Problem • How much beer and ale to produce from three scarce resources: • 480 pounds of corn • 160 ounces of hops • 1190 pounds of malt • A barrel of ale consumes 5 pounds of corn, 4 ounces of hops, 35 pounds of malt • A barrel of beer consumes 15 pounds of corn, 4 ounces of hops and 20 pounds of malt • Profits are $13 per barrel of ale, $23 for beer

  47. Sample LP: Transportation Problem • A firm produces computers in Singapore and Hoboken. • Distribution Centers are in Oakland, Hong Kong and Istanbul • Supply, demand and costs summary:

  48. Other LP examples • Blending problem • Diet problem • Assignment problem

  49. Key terms of LP • Variables • Parameters • Objective function • Constraints

  50. Standard Form(according to Hillier and Lieberman) Concise version: A is an m by n matrix: n variables, m constraints

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