Chapter 12 - SCM in the Service Industry
Overview of Service Operations
- How does SCM differ in service industry?
- Service are not tangible
- Customers are much more involved
- Quality is assessed differently
- Much higher ratio of labor to materials
- Facility location considerations are important
- Types of Services:
1) Pure Services: offers few or no tangible products
2) End Product Services: offer tangible components along with service
3) State Utility Services: directly involve things customer owns
- Improving service productivity is challenging due to high labor content, individual
customized services, difficulty of automating services and assessing service quality
Managing the Service Supply Chain
- Service Strategies:
- Cost leadership
- Differentiation
- Focus
- Service Delivery System:
-
- Example: Restaurant (blended delivery)
- Front staff like servers are customer centric
- Back staff like chef usually do not have contact with customers
- Any service system should be audited often to assess performance
- Bundle of Service Attributes: (with bank example)
- Explicit services: safe deposit boxes, loans, vaults
- Implicit services: atmosphere, waiting time, privacy, security
- Facilities and equipment: location, layout, equipment (facilitates the services too)
- Facilitating goods: tangible elements used with the service
- Service Location Strategy: make it easy for customers to find store and service
- Service Layout Strategy: reduce distance traveled within store, departmental layout
- Service Response Logistics:
1) Service capacity
2) Waiting times
3) Distribution channels
4) Service quality
- Since services cannot be inventoried, demand management tactics are important
Overview of Service Operations
- How does SCM differ in service industry?
- Service are not tangible
- Customers are much more involved
- Quality is assessed differently
- Much higher ratio of labor to materials
- Facility location considerations are important
- Types of Services:
1) Pure Services: offers few or no tangible products
2) End Product Services: offer tangible components along with service
3) State Utility Services: directly involve things customer owns
- Improving service productivity is challenging due to high labor content, individual
customized services, difficulty of automating services and assessing service quality
Managing the Service Supply Chain
- Service Strategies:
- Cost leadership
- Differentiation
- Focus
- Service Delivery System:
-
- Example: Restaurant (blended delivery)
- Front staff like servers are customer centric
- Back staff like chef usually do not have contact with customers
- Any service system should be audited often to assess performance
- Bundle of Service Attributes: (with bank example)
- Explicit services: safe deposit boxes, loans, vaults
- Implicit services: atmosphere, waiting time, privacy, security
- Facilities and equipment: location, layout, equipment (facilitates the services too)
- Facilitating goods: tangible elements used with the service
- Service Location Strategy: make it easy for customers to find store and service
- Service Layout Strategy: reduce distance traveled within store, departmental layout
- Service Response Logistics:
1) Service capacity
2) Waiting times
3) Distribution channels
4) Service quality
- Since services cannot be inventoried, demand management tactics are important
