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Operationin
Service Industry
By Praveen Sidola
Role of Services in an Economy
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
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
Role of Services in an Economy
Service Development Cycle
People
Technology Systems
Product
Full Launch Development
Design Analysis
Org
aniz
ati
onal
Conte
xt Team
s
Tools
Enablers
• Formulation of new services objective / strategy• Idea generation and screening• Concept development and testing
• Business analysis• Project authorization
• Full-scale launch• Post-launch review
• Service design and testing• Process and system design and testing• Marketing program design and testing• Personnel training• Service testing and pilot run• Test marketing
Role of Technology in the Service Encounter
Technology
Technology
Technology
Technology
Technology
Customer
Customer
Server
Server
Server
Server
Server
Customer
Customer
Customer
D. Technology-MediatedService Encounter
E. Technology-GeneratedService Encounter
A. Technology-FreeService Encounter
B. Technology-AssistedService Encounter
C. Technology-FacilitatedService Encounter
Service Quality Gap ModelCustomer
Perceptions
Customer
Expectations
Service
Delivery
Service Standards
ManagementPerceptions of Customer Expectations
Managing the Evidence
Conformance Service Design
Understanding the Customer
Customer Satisfaction GAP 5
Customer / Marketing Research
GAP 1
Conformance GAP 3
Communication GAP 4
Design GAP 2
Service Quality Gap Model
Service Process Control
Resources
Identify reasonfor
nonconformance
Establish measure of performance
Monitorconformance torequirements
Take corrective
action
Service concept
Customer input
Customer output
Service process
The Service Encounter Triad
ServiceOrganization
Efficiencyversus
satisfaction
Efficiencyversus
autonomy
CustomerContact
Personnel Perceived control
Process Analysis TerminologyCycle Time is the average time
between completions of successive units.
Bottleneck is the factor that limits production usually the slowest operation.
Capacity is a measure of output per unit time when fully busy.
Capacity Utilization is a measure of how much output is actually achieved.
Throughput Time is the time to complete a process from time of arrival to time of exit.
Process Analysis Terminology (cont.)
Rush Order Flow Time is the time to go through the system without any queue time.
Direct Labor Content is the actual amount of work time consumed.
Total Direct Labor Content is the sum of all the operations times.
Direct Labor Utilization is a measure of the percentage of time that workers are actually contributing value to the service.
Forecasting ModelsSubjective Models
Delphi MethodsCausal Models
Regression ModelsTime Series Models
Moving AveragesExponential Smoothing
Strategies for Matching Supply and Demand for Services
DEMANDSTRATEGIES
PartitioningdemandDeveloping
complementaryservices
Establishingprice
incentivesDevelopingreservationsystems
Promoting off-peakdemand
Yieldmanagement
SUPPLYSTRATEGIES
Cross-training
employees
Increasingcustomer
participationSharingcapacity
Schedulingwork shifts
Creatingadjustablecapacity
Usingpart-time
employees
Arrival Process
Static Dynamic
AppointmentsPriceAccept/Reject BalkingReneging
Randomarrivals withconstant rate
Random arrivalrate varying
with time
Facility-controlled
Customer-exercised
control
Arrival process
Essential Features of Queuing Systems
DepartureQueue
discipline
Arrival process
Queueconfiguration
Serviceprocess
Renege
Balk
Callingpopulation
No futureneed for service
Supply Chain for Physical Goods
Material transfer Information transfer
Suppliers
Process and Product Design
Manufacturing Distribution Retailing Customer Customer Service
Recycling/Remanufacturing
Customer-Supplier Duality in Service Supply Relationships (Hubs)
Material transfer Information transfer
Supplier
Service Design
Service Provider Customer
Inventory Models
Economic Order Quantity (EOQ)Special Inventory Models
With Quantity DiscountsPlanned Shortages
Demand Uncertainty - Safety StocksInventory Control Systems
Continuous-Review (Q,r)Periodic-Review (order-up-to)
Single Period Inventory Model
Expansion Strategies
Single Service Multiservice
Focused service: Clustered service:Single Location
Focused network: Diversified network:Multisite
ReferenceService Management: Operations, Strategy,
Information Technology
By - James Fitzsimmons Service Management—Academic Issues and
Scholarly Reflections from Operations Management Researchers.
By - Metters, Richard, Marucheck, Ann1