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Management
Instructor: Manpreet Hora
Agenda
• Objectives of the Course
• What is service operations management?
• Course Details
• Content
• Organization
• Grading
• Material
Teaching Development: Cases
Research: Failures (Service Failures, Product
Recalls, Oil Spills)
Delivery Customer
Organizational
System Value
Systems
Technology
and
Information
The Three Key Takeaways
Delight
Deliver
Design
6
Course Objectives
Value from
making a product
Agriculture:
Value from
harvesting nature
Year 2012
1-20
Distribution of U.S. Employment, 2009
Federal government 2%
Information 2%
Professional and
business services
12% Transportation and utilities 19%
Other services 4%
Health care
and social assistance State and local government
11% 13%
Educational services
2% Self employed and
Financial services unpaid family workers
Leisure and hospitality 6%
6%
9%
1-21
“Services generate about 70% of US GDP
and 85% of US jobs” … WSJ Jan. 6, 2009
Role of Services in an Economy
PERSONAL SERVICES
MANUFACTURING · Healthcare
Services inside company: · Restaurants
· Finance DISTRIBUTION · Hotels
· Accounting SERVICES
· Legal · Wholesaling
· R&D and design · Retailing
· Repairing CONSUMER
(Self-service)
BUSINESS SERVICES
· Consulting GOVERNMENT SERVICES
· Auditing · Military
· Advertising · Education
· Waste disposal · Judicial
· Police and fire protection
Services
And manufacturing employment is falling almost everywhere, including in China. The phenomenon is driven by technology,
and there’s reason to think developing countries are going to follow a different path to wealth than the U.S. did—one that
involves a lot more jobs in the services sector.
Why Factory Jobs Are Shrinking Everywhere, Businessweek, Charles Kenny, April 28, 2014
Distinctive Characteristics of Services
Operations
Business
Marketing Finance
Course Outline Review
• Nature of Services
• Service Delivery
• New Service Development
• Service Quality
• Service Productivity
• Service Failures and Service Recovery
• Nature of Services
Context
• Service Delivery Financial Services
• New Service Development Airlines
Health Care
• Service Quality Hospitality
• Service Productivity
• Service Failures and Service Recovery
• Presentations
• About 10 to 12 minutes
• Assigned questions to be addressed
• Written Component
• Ability to relate the concepts from the readings to the issues in the
specific situation.
• How well the discussion generated insights and ideas from the
participants.
• How effectively the team led the discussion.
• Was the analysis complete?
Service Project
• The individual project will cover the tools and
concepts developed in the course. The project will
focus on product companies with a service growth
potential and more details will be provided. Needless
to say, the work performed on the project must be
strictly your own.
Cases
It's easy to forget that so many of the goods that surround us made long
journeys across vast stretches of ocean to reach their destination--
Much as you might fancy yourself a world traveler, chances are that even the lowliest
objects by your side at this very moment - a pen, a coffee mug, a saltshaker - have
been around the globe, on the high seas, more than you ever will be. Source:
http://www.sfgate.com Monday, August 19, 2013
The Onset of Servicization
Vs.
Product as-a- Product
Service
Source of Service Sector Growth
• Innovation
• Push theory
• Pull theory (e.g. Cash Management)
• Services derived from products (e.g. Netflix)
• Exploiting information
• Changing Demographics
Distribution of GDP in the US Economy
Product Services
A B
Information
10% 53% 63%
C D
16% 84%
Chase (1996): Service Areas
• Service Encounter
• Interaction between service provider and customer
• Business Process Re-engineering
• Service Quality
• Linking to Performance
• Poka-Yoke
• Customer Loyalty
• Yield Management
• Information Revolution
• Customer Service
Economic Evolution
Economy Agrarian Industrial Service Experience
Method of Supply Stored in bulk Inventoried Delivered on Revealed over Sustained over
demand time time
Seller Trader Producer Provider Stager Collaborator
Customer Participation
Passive Active