MGS8770 Service Operations Management Understanding the Basics of Services ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ 2 Learning Objectives Describe the central role of services in an economy Discuss the evolution of an economy from an agrarian society to a service society Describe and contrast the features of the new experience economy with those of previous economies Describe the features of the new service economy Identify the sources of service sector growth 3 Learning Objectives Explain what is meant by a service-product bundle Identity and critique the five distinctive characteristics of a service operation and explain the implications for managers Explain how services can be described as customers renting resources Describe a service using the five dimensions of the service package Use the service process matrix to classify a service. Explain how a strategic classification of services can be helpful to managers Explain the role of a service manager from an open- systems view of service
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MGS8770
Service Operations Management
Understanding the Basics of Services
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Learning Objectives
Describe the central role of services in an
economy
Discuss the evolution of an economy from an
agrarian society to a service society
Describe and contrast the features of the new
experience economy with those of previous
economies
Describe the features of the new service economy
Identify the sources of service sector growth
3
Learning Objectives
Explain what is meant by a service-product bundle
Identity and critique the five distinctive characteristics of a service operation and explain the implications for managers
Explain how services can be described as customers renting resources
Describe a service using the five dimensions of the service package
Use the service process matrix to classify a service.
Explain how a strategic classification of services can be helpful to managers
Explain the role of a service manager from an open-systems view of service
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Why Study Service Operations?
Service plays a significant role in our economy
and our life
Management tools that are appropriate for
manufacturing are not all transferable into a
service environment
Knowing how to effectively and efficiently
manage service operations can gain you a
competitive edge
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What Are Services?
Difficult to define unambiguously
“Non-farming, non-manufacturing
employment”
Instead, it is easier to identify some
unique characteristics
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Unique Characteristics of Services
Intangibility
Perishability
Heterogeneity
Simultaneity
Customer Participation in the Service
Process
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Unique Characteristics of Services
Intangibility: creative advertising, no patent protection, importance of reputation
Perishability: cannot inventory, opportunity loss of idle capacity, need to match supply with demand
Heterogeneity: customer participation in delivery process results in variability
Simultaneity: opportunities for personal selling, interaction creates customer perceptions of quality
Customer Participation in the Service Process: attention to facility design but opportunities for co-production
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Services Characteristics and Managerial Implications
Adapt all business processes/decisions
Describe the fundamental characteristics as they apply to services
Examine the implications of the fundamental characteristics
on the customer and therefore on operations
Explore the potential managerial actions to address
the implications of the fundamental characteristics
Fundamental Issues with Unique Service Characteristics