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Structure of the Unit

Week 8: Introduction, Service Classifications (assignment hand out, due on Friday week 12)

Week 9: Service Design

Week 10 (3 hours): (catching up), Service Productivity Service Capacity

Week 11: Strategic Links - Cultural Issues

Assignment
MS923 (MS)
40% of the total mark

MS957 (DMEM)
60% individual (4000 words) 40% group (2000)

20% individual (1500 words) 20% group (4000 words)

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Assignment
MS923 (MS)
Apply discussed topics to a service operation of your choice in groups (20%, 4000 words) Carry out a comparative study of service operations individually (20%, 1500 words)

MS957 (DMEM)
Apply discussed topics to a service operation of your choice individually (60%, 4000 words) Carry out a comparative study of service operations in groups (40%, 2000 words)

How many of you see yourself working in a manufacturing factory/plant/company in future?

More than 70% of the employment in developed countries is in service jobs. The figure is not that different in many developing countries.

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What is so special about Service Operations

So what do we mean by service operations?

Would you call fast food take away a service operation or a manufacturing operation?

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Lets find few criteria for defining service:

Compare the operations in a Car Factory with operations in a Management Consultancy Company: What are the main differences (Operations point of view)? 1. Intangibility 2. Heterogeneity 3. Inseparability 4. Perishability

Consequences of service characteristics:

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But are the four characteristics always apply?

Can you think of any exceptions?

Lovelock and Gummesson Options for Service Paradigm

Declare victory of manufacturing Focus on specific services Search for a new paradigm

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What is your suggestion?

So where is the line that differentiates services with manufacturing?

Service characteristics

(integrated)

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Hayes and Wheelwright, 1979 (for Manufacturing)

Classification of services

Is it useful?

Why?

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Classification of services: What is your suggestion?

For instance, how can we compare and cluster these services? Find (an) indicator/s that could be used for classifying (clustering/grouping) these services in a reasonable and beneficial way:

Airlines; Hospitals; Retailing; Doctors; Auto Repair; Trucking; Schools; Lawyers; Hotels; Retail Banking

Service Dimensions:
The unique characteristics of service operations and the wide variety of different kinds of services prompts the researchers to look for operational variables that could be used as indicators for understanding the behaviour of services. These variables are called service dimensions. There are no standard sets of service dimensions. Service Dimensions are being used as criteria for classification of services.

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Classification of services: Service Dimensions:

Degree of Customer Contact Degree of Customisation Degree of Front Value Added Degree of Labour Intensity Degree of Process Focus Degree of Discretion

Classification of services (three popular works):

Chases suggestion (1978)

Schmenners suggestion (1986)

Silvestro et. al. suggestion (1992)

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Customer Contact Approach (Chase)

Potential facility efficiency=

f [1 (CC time)/(service creation time)]

Example: Formula 1 Hotel

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Customer Contact Approach (developed)

HIGH
Buffered Core Sales Opportunity

LOW
Face-to-face total cust. Permeable system (penetrable) Face-to-face Face-to-face tight specs Phone contact Mail contact Onsite technology Reactive system loose specs

Production Efficiency

LOW

Customer Contact

HIGH

The service process matrix (Schmenner, 1986)

Degree of interaction and customisation High Low Service Factory Degree of labour intensity Low
Airlines Airlines Hotels Hotels Trucking Trucking

Service Shop
Hospitals Hospitals Auto Auto Repair

Mass Service
Retailing Retailing

Professional Service
Doctors Doctors Lawyers Lawyers

High

Schools Schools Retail Retail Banking

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The dynamic nature of SPM

Degree of interaction and customisation High Low Service Factory Degree of labour intensity Low
Airlines Airlines Hotels Hotels Trucking Trucking

Service Shop
Hospitals Hospitals Auto Auto Repair

Mass Service
Retailing Retailing

Professional Service
Doctors Doctors Lawyers Lawyers

High

Schools Schools Retail Retail Banking

Examples: No Frill Airlines, Catalogue Stores

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The Volume Measure (Silvestro)

Number of customers processed by an individual service unit per day.

The Volume Measure

High Professional Services

Customer Contact Process Focus Front Value Added Discretion Labour Intensity Customisation Med.

Service Shops

Mass Services Low

Volume of the Service

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Example: Lunn Poly

What do you think about Chases, Schmenners and Silvestros proposals for classification of services?

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Class Venue - times

22nd Nov: ST625 Tuesday 10-12 29th Nov: ST625 Tuesday 10 -1 (3 hours) 6th Dec: RCB Assembly Tuesday 10-12

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