This document discusses several key concepts in operations management for the service industry. It covers the service development cycle, including formulation, design, testing, and launch. It also discusses the role of technology in service encounters, models for service quality and process control, forecasting methods, strategies for matching supply and demand, essential features of queuing systems, and inventory models. Finally, it provides an overview of expansion strategies for service firms.

1. Operation
in
Service Industry
By
Praveen Sidola

2. 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

3. Role of Services in an
Economy

4. Service Development Cycle
• Full-scale launch
• Post-launch
review
Full Launch Enablers Development
• Formulation
of new services
objective / strateg
People
• Idea generation
• Service design
and screening
and testing
• Concept
• Process and system
development and
design and testing Product testing
• Marketing program
design and testing
• Personnel training Technology Systems
• Service testing and
pilot run
• Test marketing Tools
Design Analysis
• Business analysis
• Project

5. Role of Technology in the Service
Encounter
Technolog Technolog Technolog
y y y
Custome Serve Custome Serve Custome Serve
r r r r r r
A. Technology-Free B. Technology-Assisted C. Technology-Facilitated
Service Encounter Service Encounter Service Encounter
Technolog Technolog
y y
Custome Serve Custome Serve
r r r r
D. Technology-Mediated E. Technology-Generated
Service Encounter Service Encounter

6. Service Quality Gap Model
Service Quality GapCustomer
Customer
Model
Customer Satisfaction
GAP 5
Perceptions Expectations
Managing the Customer / Understanding
Evidence Marketing Research the Customer
Communication
GAP 4 GAP 1
Management
Service
Perceptions
Delivery of Customer
Expectations
Conformance
Design GAP 2
GAP 3
Conformance Service Design
Service
Standards

7. Service Process Control
Customer
input Service
concept
Service Customer
Resources output
process
Take Monitor Establish
corrective conformance to measure of
action requirements performance
Identify reason
for
nonconformance

8. The Service Encounter Triad
Service
Organization
Efficiency Efficiency
versus versus
autonomy satisfaction
Contact
Customer
Personnel Perceived
control

9. Process Analysis Terminology
 Cycle 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.

10. 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.

11. Forecasting Models
 Subjective Models
Delphi Methods
 Causal Models
Regression Models
 Time Series Models
Moving Averages
Exponential Smoothing

12. Strategies for Matching Supply
and Demand for Services
DEMAND SUPPLY
STRATEGIES STRATEGIES
Partitioning Increasing
demand customer
Developing participation
Sharing
complementary
capacity
services
Establishing
Scheduling
price
Developing Cross- work shifts
incentives
reservation training
systems employees
Promoting Creating
off-peak adjustable
Using
demand capacity
part-time
employees
Yield
management

13. Arrival Process
Arrival
process
Static Dynamic
Random Random arrival Customer-
Facility- exercised
arrivals with rate varying
controlled control
constant rate with time
Accept/Reject Price Appointments Reneging Balking

14. Essential Features of Queuing
Systems
Renege
Arrival Queue
process Departure
Calling Queue discipline Service
population configuration process
Balk No future
need for
service

15. Supply Chain for Physical
Goods
Suppliers
Recycling/Remanufacturing
Process and Customer
Product Manufacturing Distribution Retailing Customer
Service
Design
Material transfer Information transfer

16. Customer-Supplier Duality in
Service Supply Relationships
(Hubs)
Supplier
Service Service
Provider Customer
Design
Material transfer Information transfer

17. Inventory Models
 Economic Order Quantity (EOQ)
 Special Inventory Models
With Quantity Discounts
Planned Shortages
 Demand Uncertainty - Safety Stocks
 Inventory Control Systems
Continuous-Review (Q,r)
Periodic-Review (order-up-to)
 Single Period Inventory Model

18. Expansion Strategies
Single Service Multiservice
Focused service: Clustered service:
Single
Location
Focused network: Diversified network:
Multisite

19. Reference
 Service Management: Operations, Strategy,
Information Technology
By - James Fitzsimmons
 Service Management—Academic Issues and
Scholarly Reflections from Operations
Management Researchers.
By - Metters, Richard, Marucheck, Ann1