Chap 1 the Role of Service Operations

7/29/2019 Chap 1 the Role of Service Operations

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Role of Services in an Economy


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What is a service?

An idea?

A circumstance?

A convenience?

A physical thing?


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Goods vs. Services

Good: tangible physical object; created and

transfered; existence over time

Service: intangible and perishable; created

and used simultaneously; only the effect has

an existence over time

Book, restaurant, TV


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Challenge to managers

Identify appropriate techniques developed

in manufacturing that are applicable to

service operations

Initiate the innovative use of information

systems

Recognise the consumer as a productiveresource


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Service Definition

A Service is a Time-perishable, Intangible

Experience Performed for a Customer

Acting in the Role of a Coproducer.

James Fitzsimmons


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Definition of Service Firms

Service Enterprises are Organizations that

Facilitate the Production and Distribution of

Goods, Support Other Firms in MeetingTheir Goals, andAdd Value to Our Personal

Lives.

James Fitzsimmons


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Taxonomy of services

Domestic services

Trade and Commerce

Services that refine and extend human

capacities


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Role of Services in an Economy

INFRASTRUCTURE SERVICE

Communications

Transportation

Utilities

Banking

PERSONAL SERVICES

Healthcare

Restaurants

Hotels

CONSUMER(Self-service)

GOVERNMENT SERVICES

Military

Education

Judicial

Police and fire protection

DISTRIBUTION

SERVICES

Wholesaling

Retailing

Repairing

FINANCIAL SERVICES

Financing

Leasing

Insurance

MANUFACTURING

Services inside company:

Finance

Accounting

Legal

R&D and design

BUSINESS SERVICES

Consulting

Auditing

Advertising

Waste disposal

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Stages of Economic

Development

Features

Pre- Use of Standard

dominant human Unit of of living

Society Game activity labor social life measure Structure Technology

Pre- Against Agriculture Raw Extended Sub- Routine Simple hand

Industrial Nature Mining muscle household sistence Traditional tools

power Authoritative

Industrial Against Goods Machine Individual Quantity Bureaucratic Machines

fabricated production tending of goods Hierarchical

nature

Post- Among Services Artistic Community Quality of Inter- Information

industrial Persons Creative life in terms dependent

Intellectual of health, Global

education,

recreation


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The New Experience Economy

Economy Agrarian Industrial Service Experience

Function Extract Make Deliver Stage

Nature Fungible Tangible Intangible Memorable

Attribute Natural Standardized Customized Personal

Method of

supply

Stored in

bulk

Inventoried Delivered

on demand

Revealed

over time

Seller Trader Manufacturer Provider Stager

Buyer Market User Client Guest


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The Four Realms of an Experience

Customer Participation

Passive Active

Environmental

Absorption Entertainment

(Movie)

Education

(Language)

Relationship Immersion Esthetic(Tourist)

Escapist(Skydiving)


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Source of Service Sector Growth

Information Technology (e.g. Internet)

InnovationPush theory (e.g. Post-it)

Pull theoryServices derived from products

Exploiting information (e.g. Auto part sales)

Difficulty of testing service prototypes

Changing Demographics

Aging of the populationTwo-income familiesUrbanisation

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Role of the Service Manager

Entrepreneurial Innovation

Capitalizing on Social Trends

Management Challenges

Economies of Scale (MRI scanner)

Economies of Scope(Convenience store)

Complexity (Yield Management)Boundary Crossing (Bank vs Brokerage)

International Competitiveness( Cultural

Diversity)


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Discussion Topics

Illustrate how the type of work he or she doesinfluences a persons lifestyle.

Is it possible for an economy to be based entirelyon services?

Speculate on the effect that the Internet will haveon the delivery of services.

What is the value of self-service in an economy? Comment on the role that marketing plays in the

service innovation process.

Documents

Chap 1 the Role of Service Operations