my presentation at 42nd International Conference on Computers and Industrial Engineering at Cape Town (South Africa)

1. SERVICE SUPPLY CHAIN: AN INTEGRATED
CONCEPTUAL FRAMEWORK
SUMIT SAKHUJA AND VIPUL JAIN
DEPARTMENT OF MECHANICAL ENGINEERING
INDIAN INSTITUTE OF TECHNOLOGY, DELHI, INDIA 1

2. MOTIVATION
2

3. SERVICES ALL AROUND US
3

4. Services contribution in US
4

5. 5

6. Services contribution in India
2010
2010
 GDP – USD 900 billion
2008  GDP growth rate – 9%
2008
 GDP – USD 750 billion  Services contribution – 60-65 %
 GDP growth rate – 9.5%
2006
2006  Services contribution – 60 %
 GDP – USD 590 billion
 GDP growth rate – 9 %
 Services contribution – 54 %
6

7. REASON FOR SUCCESS
OF
MANUFACTURING COMPANIES
IS
SUPPLY CHAIN NETWORK
MANAGEMENT
7

8. 8

9. h in SSCM
Researc
in SCM
arch
Rese
9

10. CAN SERVICES BE VIEWED AS
NETWORK/CHAIN OF ACTIVITIES?
SERVICES
N S
LE
M
SC
10

11. INTRODUCTION
• A Service Supply Chain (SSC) is a network of service provider facilities
(in-house or outsourced), each of which is able to process one or more
service tasks on an as needed basis.
• Two key characteristics of a SSC are
(i) the business service is decomposable into several sequential
tasks that can be processed by different service providers, and
(ii) the primary capacity resource is skilled labor.
• SSCs are increasingly being developed by companies that experience a
high variability in the demand for their services (e.g., loan processing,
analytical consulting services, emergency repair crews, claims
processing, etc.).
11

12. Service Product Delivered by a Service Supply Chain
SERVICE JOB
SERVICE PRODUCT TASK 2 PROVIDER A
CUSTOMER REQUEST TASK 1
TASK 3
PROVIDER B
Y RE V L E D
I
C UD ORP E C VRES
TASK 4 PROVIDER C
TASK 5
I
12

13. LITERATURE REVIEW
• Services
• Service Operations Management
• Service Supply Chain Management
13

14. SERVICES
14

15. Service Definitions
Author (year) Definition
Levitt, 1972 A service is a personal performance.
Hill, 1977 A service may be defined as a change in the conditions of a person
or a good belonging to some economic unit, which is brought about
as a result of the activity of some other economic unit with the prior
agreement of the former person or economic unit.
Chase, 1978 Services are processes involving customer contact.
Berry, 1980 A service is a deed, act or performance.
Murdick et al., 1990 Define services as "economic activities that produce time, place,
form, or psychological utilities”.
Fitzsimmons and Fitzsimmons, Define services as a time-perishable, intangible experience
2004 performed for a customer acting in the role of co-producer.
Spohrer et al., 2007 Service is typically considered as an application of specialized
knowledge, skills, and experiences, performed for the benefit of
another.
15

16. The main source of the uniqueness is the customer involvement in
the process. Unique characteristics of services include:
– Customer-supplier duality
– Perishable
– Heterogeneity
– Labour intensive
16

17. Several characteristics that have been identified in the literature
include:
– the degree of labour intensity;
– the degree of interaction;
– the degree of customisation;
– the volume of the output;
– variety and flexibility of services offered;
– the length of customer contact time
17

18. Service Typology
EXTENT OF CUSTOMER CONTACT AND LABOR INTENSITY
SERVICE FACTORY
Ex: Transportation, MASS SERVICES
Airline, Hotel, Resort, Ex: Retailing, Schools.
Recreation
SERVICE SHOP PROFESSIONAL
Ex: Hospitals, Banks, SERVICES
Auto Repairs Ex: Law firms, Doctors,
Accountants
18

19. Service Concept
Elements Examples
Supporting Facilities Facilities layout, décor, support
technology and equipment, branch
network, kiosks, roller coasters
Facilitating goods (physical items) Food, ATM cards, forms, receipts,
check-book, golf clubs
Facilitating Information Schedules, fee structures, data,
Core Services medical records, web page design,
diagnostics
Explicit Services Satisfy hunger, transportation,
(experimental/sensual) surgery, transactions, and
entertainment.
Implicit Services (psychological Comfort, status, convenience, well
benefits) being, delight
Services/facilities that supplement or
“surround” the core service (e.g.
Peripheral Services valet parking for hospital services,
shopping at terminals for air
transportation services)
19

20. SERVICES OPERATIONS MANAGEMENT
20

21. Service
Service
provider
selection & forecasting
Outsourcin
g
Service Demand
performance management
measurement
Service
Service Operations/ Capacity
quality Activities management
measurement
Customer Coordination
related issues &
Collaboratio
n
Application of
manufacturing
principles
21

22. SERVICE SUPPLY CHAIN MANAGEMENT
22

23. Reasons why services can be viewed as a part of supply chains
(Giannakis 2011)
• Coordination of processes
For the design and delivery of services a large number of
independent stakeholders may be involved, whose processes need
to be coordinated.
• Improved performance through process integration
Considering services as part of supply chains offers a holistic
perspective of the processes involved for their creation and
provision and the weaknesses that need to be addressed.
• Improvement of the customer interface
The high level of customer contact in services stresses the
importance for an organisation to react swiftly to customer
23
feedback

24. Service Supply Chain Definitions
Author Definition
Kathawala & Abdou (2003) The supply chain management for the service industry is the ability of the company/firm to get closer to
the customer by improving its supply chain channels. The service supply chains will include
responsiveness, efficiency, and controlling
Ellram, Tate and Billington (2004) Supply chain management is the management of information, processes, capacity, service performance
and funds from the earliest supplier to the ultimate customer.
Baltacioglu et al. (2007) The service supply chain is the network of suppliers, service providers, consumers and other supporting
units that performs the functions of transaction of resources required to produce services;
transformation of these resources into supporting and core services; and the delivery of these services
to customers.
Baltacioglu et al. (2007) Service supply chain management is the management of information, processes, resources and service
performances from the earliest supplier to the ultimate customer.
Li, Liu and Cheng (2008) Service Supply Chain (SSC) is a service-network that reorganizes different service entities in order to
satisfy customers' require by using modem management technology to break down and rebuild a system
which considers customers' demands as starting point and takes a complex service or an Integrated
Service Package as a series of process in service when the service-industries are developed to some
extent.
Wu and Yang (2009) SSC can be defined as follows: an integration of a series of entities (individual person, organization,
enterprise) to provide personalized service directly or indirectly.
He, Ho and Xu (2010) SSC refers to the supply and demand chain of service which integrates the service resources using new
technologies and management models.
Its basic structure is an integrated value chain / network whose members are the service providers,
service integrators, and customers.
Song and Xu (2011) The PSSC management is an integrated management mode of service information, service processes,
service capacity, service performance and service funds from the initial service supplier to the ultimate
customer in the process of producer service outsourcing.
24

25. Structure of Service Supply Chain
Three key elements of a service supply chain are
 Service Providers
• provide standardized, single-service types,
• have a strong ability to cooperate and collaborate,
• according to the service integrator’s special requirement on
service capabilities and process, service providers can
make appropriate adjustments.
25

26.  Service Integrators
• core enterprise in a service supply chain,
• have a highly efficient information-processing,
• powerful service design ability to integrate services,
• coordinate service provider to provide customized services
on consumer’s demand,
• through customer demand forecasting and customer
relationship management service integrators can keep up
with changes of customer demand so as to create and seek
the value of new growth points,
• and service integrators can integrate the resources and
capabilities of service providers, improve the integration of
service.
26

27.  Customers
• customer can be an organization or an individual,
• depending upon the type of customer the operations of SSC
are initiated,
• performance of the SSC can be measured from the
customer perspective,
• customers are the initial suppliers in a SSC (Sampson
2000).
27

28. Service Supply Chain (Source: Baltacioglu et al. 2007).
28

29. Decision Levels in a Service Supply Chain
 Level-one decisions
• these decisions are in the area of service business planning,
• have a long term effect on the service supply chain,
• senior management is frequently the decision maker and
user of this information,
• quick response is not the requirement at this level since
these decisions are not made or revisited every day,
• examples of level-one decisions are dynamic sourcing,
service provider selection, capacity planning, service
delivery, service quality, service productivity etc.
29

30.  Level-two decisions
• these decisions are in the area of tactical planning, and they
have a shorter life than level-one decisions,
• detailed information is available, and the data probably are
very reliable,
• these decisions are constrained by level-one decisions with
some leeway to account for sudden change in data,
• at this level, quick response is nice to have, and
occasionally a requirement,
• an example of level-two decision is one that needs to
commit priority orders and obey commitments made in
level one, like capacity planning, effectiveness in
scheduling, supplier cost and pricing issues, forecasting
accuracy etc.
30

31.  Level-three decisions
• these decisions are in the area of operational planning and
scheduling,
• the effect of these decisions is short term and they are
constrained by level-one and level-two decisions,
• quick response is an absolutely necessity,
• examples are staff scheduling, short term forecasting,
resource allocation, the service order entry method, the
customer service order path, capacity utilization, operating
ratio of actual to planned working hours, etc.
31

32. Year wise Publications on Service Supply Chains.
32

33. Application Area of Service Supply Chain
33

34. Examples of SSC
34

35. (Sampson, 2000) 35

36. LOGISTICS SERVICE SUPPLY CHAIN
(Du and Rong, 2010)
36

37. (Song and Xu, 2011)
(Hu and Xianlong, 2011)
37

38. TOURISM SUPPLY CHAIN
(Zhang et al. 2009)
38

39. SUPPLY CHAIN OF PROPERTY PURCHASE
(Giannikis, 2011)
39

40. EDUCATION SUPPLY CHAIN
(Habib and Jungthirapanich, 2010)
40

41. PORT SERVICE SUPPLY CHAIN
(Zhang et al. 2009)
41

42. HOTEL SUPPLY CHAIN
42

43. • Financial Service Supply chains, Legal Service
Supply Chains, Healthcare Service Supply
Chains, Telecommunication Service Supply
Chains and more……….
43

44. LEARNING FROM THE LITERATURE
44

45. CUSTOMER CUSTOMER CUSTOMER CUSTOMER
INFORMATION MANAGEMENT
SERVICE
SERVICE DELIVERY
DEMAND
MANAGEMENT
SERVICE INTEGRATOR
C SERVICE
O CAPACITY SERVICE
L MANAGEMENT CUSTOMIZATION
L
A
B
O SERVICE SERVICE SERVICE
R PROVIDER OUTSOURCING INTEGRATION
A SELECTION
T
I
O
N
SERVICE SERVICE SERVICE SERVICE
PROVIDER PROVIDER PROVIDER PROVIDER
Conceptual Framework of Service Supply Chain
45

46. AN INTEGRATED CONCEPTUAL FRAMEWORK
• The proposed framework highlights the structure of the SSC
with three basic elements that are customers, service
integrator as a core and service providers.
• The framework explains the flow of key activities that are
carried out in a typical SSC.
• It shows that in a SSC, there can be a number of customers,
each of their individual service demands are forwarded to the
service integrator.
• The service integrator here is considered as the core element
of the SSC.
• Service integrator is responsible for managing customer
demand, through its demand management capability.
46

47. • Capacity management is done by selecting service providers
who are capable of performing the required service tasks.
• These service operations can also be outsourced to different
service provider using various service outsourcing strategies.
• After the service providers perform their operations and come
up with service solutions, these services need to be integrated
and customized depending upon the customer requirements.
• Finally, the customised service package is delivered to the final
customer through a well managed service delivery system,
which is again the core activity of the service integrator.
47

48. CONCLUSIONS
• The framework provides insights into the conceptualization of
the service supply chain management (SSCM) field.
• The work enables us to briefly describe SSCM, suggest how it
should be described and structured and also highlights the
various decisions that are needed to produce and deliver the
services to the customer through a SSC network.
• This generic model can fit to different service industries, and
also provides the vision to the service operation managers to
carry out their service activities in a systematic and planned
manner to achieve organizational objectives.
48

49. KEY REFERENCES
• Baltacioglu, T., E. Ada, M.D. Kaplan, O. Yurt and Y.C. Kaplan. ‘A New Framework for
Service Supply Chains’, The Service Industries Journal, (27:2), 2007, pp.105–124.
• Ellram, L.M, W.L. Tate and C. Billington, “Understanding and Managing the Services
Supply Chain’, The Journal of Supply Chain Management A Global Review of Purchasing
and Supply, (40:4), 2004, pp 17-32.
• Ellram, L.M, W.L. Tate and C. Billington, “Services Supply Management: the next frontier
for improved organizational performance”, California Management Review, (49:4), 2007, pp.
44-66.
• Giannakis. M. ‘Conceptualizing and managing service supply chains’, The Service Industries
Journal, (31:11), 2011, pp. 1809–1823.
• Cho, D.W., Y.H. Lee, S.H. Ahn and M.K. Hwang. ‘A framework for measuring the
performance of service supply chain management, International Conference on Computers
and Industrial engineering, 2011.
• Sampson, S.E. ‘Customer-supplier duality and bidirectional supply chains in service
organizations’, International Journal of Service Industry Management, (11:4), 2000, pp. 348-
364.
• Sengupta. K, D.R. Heiser and L.S. Cook. ‘Manufacturing and Service Supply Chain
Performance: A Comparative Analysis’, The Journal of Supply Chain Management, (42:4),
2006, pp. 4-15.
49

50. THANK YOU
50