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Shin‐Ming Guo
NKFUST
Service Operations
Department of Logistics Management
- ffice: C415, phone: 6011000 ext. 3216
Service Operations Shin Ming Guo NKFUST Department of Logistics - - PDF document
Service Operations Shin Ming Guo NKFUST Department of Logistics - - PDF document
Service Operations Shin Ming Guo NKFUST Department of Logistics Management office: C415, phone: 6011000 ext. 3216 e mail: smguo@nkfust.edu.tw web: www2.nkfust.edu.tw/~smguo/teaching/pom.htm Textbook Fitzsimmons and Fitzsimmons, Service
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Old Topics for Team Report
Loan Processing at Capital One — Wharton School Great Italian Cuisine without the Wait — HBS Taco Bell Corp. — HBR British Columbia NICU Bed Allocation — University of W. Ontario Which Products Should You Stock? — HBR The Morrison Company: redesigning the manufacturing process — HBR
What is Service?
Tangible or intangible? Customer involvement?
Standardization or customization? Human or machine processing? Inventory and leftover? A service is a time‐perishable, intangible experience performed for a customer acting in the role of co‐producer.
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Compare Manufacturing & Service
Characteristic Manufacturing Service
Product Tangible Tangible & Intangible Customer involvement Low High Uniformity of input High Low Labor content Low High Uniformity of output High Low Performance Measurement Easy Difficult Quality Control High Low Inventory Much Little or Perishable
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Moving to Experience Economy
Economy Agrarian Industrial Service Experience Economic Offering Food Packaged goods Commodity service Consumer services Business services Function Extract Make Deliver Stage Co‐create Nature Fungible Tangible Intangible Memorable Effectual Attribute Natural Standardized Customized Personal Growth Method of Supply Stored in bulk Inventoried Delivered
- n demand
Revealed
- ver time
Sustained
- ver time
Seller Trader Producer Provider Stager Collaborator Buyer Market Customer Client Guest Collaborator Expectation Quantity Features Benefits Sensations Capability
What is Operation Management?
Transformation = Production = Service
Physical: restaurants Location: transportation Exchange: retailing Storage: warehousing Physiological: health care Informational: telecommunications
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How Can OM Help a Business?
Low Cost? Fast Delivery? Quality Service? Better Selection?
Four Dimensions of Tradeoffs
Cost
▪ Efficiency ▪ Measured by:
‐ cost per unit ‐ utilization
Time
▪ Responsiveness to demand ▪ Measured by:
‐ customer lead time ‐ flow time
Quality
▪ Product quality
(how good?)
▪ Process quality
(as good as promised?)
Variety
▪ Customer heterogeneity ▪ Measured by:
‐ number of options ‐ flexibility / set‐ups
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1st Use: Remove Inefficiencies
Responsiveness Low High Eliminate inefficiencies Current frontier In the industry Labor Productivity Low High
Competitor A Competitor C Competitor B
It’s Details that Count
Speed and Convenience for Passengers! On time performance and Cost for Airlines!
needs fine‐tuning…
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2nd Use: Help Making Trade-Offs
Responsiveness Labor Productivity Low High Low High Trade‐off Very short waiting times Frequent operator idle time Long waiting times, yet operators are almost fully utilized
Call Center of Railroad Station
Goal: 80% of incoming calls wait less than 20 seconds Starting point: 30% of incoming calls wait less than 20 secs. Problem: Must decide staffing levels of call centers and understand impact on efficiency Solution: Provides tools to support strategic trade‐offs
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3rd Use: Evaluate New Process
Responsiveness Low High Redesign process Current frontier In the industry Labor Productivity Low High New frontier
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Operation is Heart of Business
Operations account for 60 to 80% of the
direct expenses that burden a firm’s profit.
Operations directly affect customers and
are essential to the competitiveness
- f the firm.
Service Managers need to perform