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  • “ Marketing, more than any other business function, deals with customers.”
  • SLIDES

    1. 1. A Supply Chain Approach for Service Design and Innovation Scott E. Sampson Marriott School of Management, Brigham Young University Craig M. Froehle College of Business, University of Cincinnati 3 rd Annual Product and Service Innovation Conference Park City, Utah February 9-11, 2006
    2. 2. Designing Services Designing Product Supply Chains Services are supply chains! Product supply chains are well understood.
    3. 3. Three Key Questions <ul><li>What are supply chains? </li></ul><ul><li>What are major elements of supply chain design? </li></ul><ul><li>What are major elements of supply-chain design for services ? </li></ul>
    4. 4. Questions 1: What are supply chains? <ul><li>A network of suppliers and customers that work together to convert and move goods from the raw materials stage through to end consumers. </li></ul>graphic © 2004 The Progress Group
    5. 5. Supply Chain Innovators <ul><li>World class supply chain design! </li></ul><ul><li>Sustainable competitive advantage! </li></ul>
    6. 6. Question 2: What is supply chain design? <ul><li>Supply chain design is about… </li></ul><ul><li>Considering the various elements. </li></ul><ul><li>Improving linkages. </li></ul>
    7. 7. Elements of Supply Chain Design Suppliers Production Distribution (warehousing and logistics) Retailing Consumers Engineering ... Labor Quality assessment
    8. 8. Supply chain element #1: Suppliers <ul><li>Good suppliers… </li></ul><ul><li>supply inputs of adequate quality </li></ul><ul><li>are on schedule </li></ul><ul><li>are responsive </li></ul>Suppliers Production Distribution (warehousing and logistics) Retailing Consumers Engineering ... Labor Quality assessment
    9. 9. Supply chain element #2: Labor <ul><li>Good labor… </li></ul><ul><li>is competent </li></ul><ul><li>is able to follow instructions </li></ul><ul><li>works well with others </li></ul>Suppliers Production Distribution (warehousing and logistics) Retailing Consumers Engineering ... Labor Quality assessment
    10. 10. Supply chain element #3: Design Engineering <ul><li>Good design engineering… </li></ul><ul><li>is consistent with target segment needs </li></ul><ul><li>has achievable specifications </li></ul><ul><li>considers both the process and the product </li></ul>Suppliers Production Distribution (warehousing and logistics) Retailing Consumers Engineering ... Labor Quality assessment
    11. 11. Supply chain element #4: Production <ul><li>Good production… </li></ul><ul><li>conforms to specifications </li></ul><ul><li>provides cost efficient utilization of resources </li></ul><ul><li>does not have undetected problems </li></ul>Suppliers Production Distribution (warehousing and logistics) Retailing Consumers Engineering ... Labor Quality assessment
    12. 12. Supply chain element #5: Quality Assessment <ul><li>Good quality assessment… </li></ul><ul><li>provides accurate and reliable measurements </li></ul><ul><li>avoids false positives and false negatives </li></ul><ul><li>is actionable </li></ul>Suppliers Production Distribution (warehousing and logistics) Retailing Consumers Engineering ... Labor Quality assessment
    13. 13. Supply chain element #6: Inventory <ul><li>Good inventory… </li></ul><ul><li>is not kept waiting longer than necessary </li></ul><ul><li>does not incur a high holding cost </li></ul><ul><li>does not become obsolete </li></ul>Suppliers Production Distribution (warehousing and logistics) Retailing Consumers Engineering ... Labor Quality assessment
    14. 14. Supply chain element #7: Consumers <ul><li>Good consumers… </li></ul><ul><li>select things </li></ul><ul><li>pay for them </li></ul><ul><li>consume them </li></ul><ul><li>are loyal </li></ul>Suppliers Production Distribution (warehousing and logistics) Retailing Consumers Engineering ... Labor Quality assessment
    15. 15. Seven Supply Chain Elements <ul><li>suppliers </li></ul><ul><li>labor </li></ul><ul><li>engineering </li></ul><ul><li>production </li></ul><ul><li>quality assessment </li></ul><ul><li>inventory </li></ul><ul><li>consumers </li></ul>Suppliers Production Distribution (warehousing and logistics) Retailing Consumers Engineering ... Labor Quality assessment
    16. 16. Services
    17. 17. Service Innovators <ul><li>Sustainable competitive advantage! </li></ul><ul><li>World class supply chain design??? </li></ul><ul><li>What is service supply-chain design? </li></ul>
    18. 18. Question 3: What are elements of supply chain design for services?
    19. 19. Service customer role #1… <ul><li>Good customer-suppliers: </li></ul><ul><li>supply inputs of adequate quality </li></ul><ul><li>are on schedule </li></ul><ul><li>are responsive </li></ul><ul><li>Innovation? </li></ul><ul><li>Facilitating customer access and controlling the receipt of items provided by customers. </li></ul><ul><li>e.g., automated bag check. </li></ul>Customer as Supplier
    20. 20. Service customer role #2… <ul><li>Good customer labor… </li></ul><ul><li>is competent </li></ul><ul><li>is able to follow instructions </li></ul><ul><li>works well with others </li></ul><ul><li>Innovation? </li></ul><ul><li>Systems for facilitating co-production. </li></ul><ul><li>e.g., online booking. </li></ul>Customer as Labor
    21. 21. Service customer role #3… <ul><li>Good customer production… </li></ul><ul><li>conforms to specifications </li></ul><ul><li>provides cost efficient utilization of resources </li></ul><ul><li>does not have undetected problems </li></ul><ul><li>Innovation? </li></ul><ul><li>Production control systems including mass production and mass customization. </li></ul><ul><li>e.g., JetBlue entertainment console. </li></ul>Customer as Production
    22. 22. Service customer role #4… <ul><li>Good customer inventory: </li></ul><ul><li>is not kept waiting longer than necessary </li></ul><ul><li>does not incur a high holding cost </li></ul><ul><li>does not become obsolete </li></ul><ul><li>Innovation? </li></ul><ul><li>Scheduling and queuing systems. </li></ul><ul><li>Waiting enhancers. </li></ul><ul><li>e.g., cell phone notification of flight status. </li></ul>Customer as Inventory
    23. 23. Service customer role #5… <ul><li>Good customer quality assessment… </li></ul><ul><li>provides accurate and reliable measurements </li></ul><ul><li>avoids false positives and false negatives </li></ul><ul><li>is actionable </li></ul><ul><li>Innovation? </li></ul><ul><li>Customer feedback mechanisms. </li></ul><ul><li>e.g., in-flight feedback. </li></ul>Customer as Quality Assessment
    24. 24. Service customer role #6… <ul><li>Good customer design engineering… </li></ul><ul><li>is consistent with target segment needs </li></ul><ul><li>has achievable specifications </li></ul><ul><li>considers both the process and the product </li></ul><ul><li>Innovation? </li></ul><ul><li>Adaptable systems. </li></ul><ul><li>“ Experience personalization.” </li></ul>Customer as Design Engineer This would taste better with paprika
    25. 25. Service customer role #7… <ul><li>Good service consumers: </li></ul><ul><li>select things </li></ul><ul><li>pay for them </li></ul><ul><li>consume them </li></ul><ul><li>are loyal…but… </li></ul>Customer as Consumer
    26. 26. Service Customer Loyalty Principle <ul><li>“With services, often the chief competitor is the customers who can provide the service themselves…” </li></ul><ul><ul><li>SBP 6b: Competing With Customers </li></ul></ul>Customer as Competitor Innovation? Packaging services for self service.
    27. 27. 1. Customer- supplier innovations: Supplier access channels
    28. 28. 2. Customer- labor innovations: Co-production facilitators
    29. 29. 3. Customer- production innovations: mass-produced services
    30. 30. 4. Customer- inventory innovations: Scheduling and queuing system
    31. 31. 5. Customer quality-assessment innovations: Feedback mechanisms
    32. 32. 6. Customer- engineering innovations: Adaptable systems The Ritz-Carlton provides the finest personal service and facilities throughout the world. The atmosphere is warm and relaxed and the ambience embraces the uniqueness of the local culture. The variety of services offered will enable you to create your own experience. &quot;Experience Personalization&quot;
    33. 33. 7. Customer- competitor innovations: Packaging services
    34. 34. Framework for Service Innovation Packaging services 7. Competitor Adaptable customization 6. Engineering Feedback mechanisms 5. Inventory Scheduling & queuing systems 4. Quality assessment Mass-production services 3. Production Co-production facilitators 2. Labor Methods of access 1. Supplier Innovation Examples Customer Role
    35. 35. “ The Seven Elements of Service Design” <ul><li>1. Customer as supplier </li></ul><ul><li>2. Customer as labor </li></ul><ul><li>3. Customer as production </li></ul><ul><li>4. Customer as inventory </li></ul><ul><li>5. Customer as quality assessment </li></ul><ul><li>6. Customer as design engineer </li></ul><ul><li>7. Customer as competitor </li></ul><ul><li>Supply chain elements </li></ul><ul><li>suppliers </li></ul><ul><li>labor </li></ul><ul><li>production </li></ul><ul><li>inventory </li></ul><ul><li>quality assessment </li></ul><ul><li>engineering </li></ul><ul><li>consumers </li></ul>
    36. 36. Traditional Supply Chain Service Supply Chain quality assessments & suggestions Suppliers Consumers ... Service Provider customer supplied inputs Suppliers Production Distribution (warehousing and logistics) Retailing Consumers Engineering ... Labor Quality assessment
    37. 37. Summary <ul><li>A useful method for analyzing service innovations is according to how they enhance the supply chain roles of service customers. </li></ul>

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