OPS SUMMARY
CHAPTER 1
IHIP Characteristics
- Intangibility → not physical
- Heterogeneity → difficult to standardize (every service can be different) (should cope with a
variety of requests).
- Inseparability → production and consumption happens simultaneously (make use of
technology)
- Perishability → can’t store a service for later use , if not used , it is lot (make use of capacity
/ demand management through dynamic pricing)
Technology has had a significant effect on the extent to which the IHIP characteristics apply and how
the limits that they place on service operations can be overcome.
Input - transformation-output model
- Input: the resources needed to produce a service (labor of skilled workers, information,
equipment, facilities, customers).
- Transformation: the process where inputs are converted into outputs. In service
management, this might involve a mix of physical activities, intellectual tasks, and
interactions. For example, in a restaurant, cooking food is a physical task, planning the menu
is an intellectual task, and serving customers is an interaction.
- Output: The result of the transformation process is the output, which is the service delivered
to the customer. The output should ideally meet the customer's expectations or even exceed
them (combination of products and services , benefits, emotions, judgments, intentions etc).
Resources + processes are the vital ingredients for all operations
Service operations managers’ responsibilities
Overall, service operations management is concerned with the control of resources and processes
that deliver value. Classified under 4 headings.
- Framing service operations.
- Understanding service people.
- Delivering service.
- Improving service operations.
Customer experience
Involves the customer journey through a series of contact points and process steps
- Service outcomes: products, benefits, emotions, judgments and intentions
Co-production and creation
Co-production
- Customers help out in the service process (self-service / build your own pizza)
Co-creation: customers have a role in designing the product / service
- Ideation stage: can come up with ideas
- Evaluation: involved in the evaluation
- Design stage: comment on the detailed service process
Challenges for service operations management
- Balancing the operations and customer perspectives.
- Managing multiple customer groups.
- Managing tactically and strategically.
1
, CHAPTER 2
Importance of services
- Services are everywhere: nine categories of service: B2B, B2G, B2C, G2B, G2G, G2C, C2B,
C2G and C2C.
- Services are what we do and consume: services account for around 80% of GDP.
- Services are the way of the future
- The experience economy: experiences themself becomes the product (pine and
Gillmore in 1998) → suggests that businesses can create value by providing
memorable experiences, in addition to or instead of just selling products or services
- Servitization: combination of selling products with services
- Service Dominant Logic SDL: views all exchanges as service-based, rather than
goods-based. The primary basis of economic exchange is the application of
competencies (knowledge and skills) for the benefit of others. In this view, products are
just a medium for delivering service.
CHAPTER 4
Service concept
Is a shared and articulated understanding of the essential nature of the service provided and received:
detailed explanation of what should be done
Structure
- The organization responsible for the service
- The organizing idea → the core principle that guides the service’s design and delivery
- A summary of the service concept → high-level overview of the service (purpose, needs,
and distinguish from competitors) (what is the organization providing / selling)
- Details of the service provided → elaborate specific elements of the service (processes,
technologies, customer journey touchpoints etc).
- The service received by customer groups → customer perspective
Service received
- Customer experience: is about the journey and the quality of the interactions along the way
(measured though satisfaction, loyalty and engagement levels).
- Service outcome: focuses on the end result of the interaction (measured by achievement of
objectives such as problem resolution, service delivery time, quality of work → products,
benefits, emotions, judgments and intentions).
Operations differ in term of the 4 V's
Volume
- High: Produces large amounts, benefits from economies of scale, but might lack
customization.
- Low: Produces small amounts, allows for more customization but at higher costs.
Variety
- High: Offers many product / service types, caters to specific tastes, can be costlier to
manage.
- Low: Offers few options, easier and cheaper to produce, but less personalized.
Visibility
- High: Operations are highly visible to customers, requiring excellent service but offering
immediate feedback.
- Low: Operations are hidden from customers, focusing on efficiency without direct interaction.
Variation in Demand
- High: significant ups and downs in demand, needing flexibility, but facing higher costs for
- Low: Has stable demand, easier to manage and predict, leading to steady operations.
2
CHAPTER 1
IHIP Characteristics
- Intangibility → not physical
- Heterogeneity → difficult to standardize (every service can be different) (should cope with a
variety of requests).
- Inseparability → production and consumption happens simultaneously (make use of
technology)
- Perishability → can’t store a service for later use , if not used , it is lot (make use of capacity
/ demand management through dynamic pricing)
Technology has had a significant effect on the extent to which the IHIP characteristics apply and how
the limits that they place on service operations can be overcome.
Input - transformation-output model
- Input: the resources needed to produce a service (labor of skilled workers, information,
equipment, facilities, customers).
- Transformation: the process where inputs are converted into outputs. In service
management, this might involve a mix of physical activities, intellectual tasks, and
interactions. For example, in a restaurant, cooking food is a physical task, planning the menu
is an intellectual task, and serving customers is an interaction.
- Output: The result of the transformation process is the output, which is the service delivered
to the customer. The output should ideally meet the customer's expectations or even exceed
them (combination of products and services , benefits, emotions, judgments, intentions etc).
Resources + processes are the vital ingredients for all operations
Service operations managers’ responsibilities
Overall, service operations management is concerned with the control of resources and processes
that deliver value. Classified under 4 headings.
- Framing service operations.
- Understanding service people.
- Delivering service.
- Improving service operations.
Customer experience
Involves the customer journey through a series of contact points and process steps
- Service outcomes: products, benefits, emotions, judgments and intentions
Co-production and creation
Co-production
- Customers help out in the service process (self-service / build your own pizza)
Co-creation: customers have a role in designing the product / service
- Ideation stage: can come up with ideas
- Evaluation: involved in the evaluation
- Design stage: comment on the detailed service process
Challenges for service operations management
- Balancing the operations and customer perspectives.
- Managing multiple customer groups.
- Managing tactically and strategically.
1
, CHAPTER 2
Importance of services
- Services are everywhere: nine categories of service: B2B, B2G, B2C, G2B, G2G, G2C, C2B,
C2G and C2C.
- Services are what we do and consume: services account for around 80% of GDP.
- Services are the way of the future
- The experience economy: experiences themself becomes the product (pine and
Gillmore in 1998) → suggests that businesses can create value by providing
memorable experiences, in addition to or instead of just selling products or services
- Servitization: combination of selling products with services
- Service Dominant Logic SDL: views all exchanges as service-based, rather than
goods-based. The primary basis of economic exchange is the application of
competencies (knowledge and skills) for the benefit of others. In this view, products are
just a medium for delivering service.
CHAPTER 4
Service concept
Is a shared and articulated understanding of the essential nature of the service provided and received:
detailed explanation of what should be done
Structure
- The organization responsible for the service
- The organizing idea → the core principle that guides the service’s design and delivery
- A summary of the service concept → high-level overview of the service (purpose, needs,
and distinguish from competitors) (what is the organization providing / selling)
- Details of the service provided → elaborate specific elements of the service (processes,
technologies, customer journey touchpoints etc).
- The service received by customer groups → customer perspective
Service received
- Customer experience: is about the journey and the quality of the interactions along the way
(measured though satisfaction, loyalty and engagement levels).
- Service outcome: focuses on the end result of the interaction (measured by achievement of
objectives such as problem resolution, service delivery time, quality of work → products,
benefits, emotions, judgments and intentions).
Operations differ in term of the 4 V's
Volume
- High: Produces large amounts, benefits from economies of scale, but might lack
customization.
- Low: Produces small amounts, allows for more customization but at higher costs.
Variety
- High: Offers many product / service types, caters to specific tastes, can be costlier to
manage.
- Low: Offers few options, easier and cheaper to produce, but less personalized.
Visibility
- High: Operations are highly visible to customers, requiring excellent service but offering
immediate feedback.
- Low: Operations are hidden from customers, focusing on efficiency without direct interaction.
Variation in Demand
- High: significant ups and downs in demand, needing flexibility, but facing higher costs for
- Low: Has stable demand, easier to manage and predict, leading to steady operations.
2
