Service op mgmt mid term week 2 and 3

Operation mgmt is:

The management of systems or processes that create goods and/or provide services

The systematic design (planning), direction (doing), and control (seeing) of processes that transform inputs into services and products for customers

Operations mgmt affects

- Companies' ability to compete

- Nation's ability to compete internationally

Operations mgmt for services

- has the functional responsibility for producing the services of an organization and providing them directly to its customers

The three basic functions

Finance, operations and marketing

The operations function

involves the conversion of inputs into outputs

Value-added elements

make the difference between the cost of inputs and the value or price of outputs

Product packages

are a combination of goods and services

-can make a company more competitive

Inputs

- raw vegetables

- metal sheets

- water

- energy

- labor

- building

- equipment

Processing

- cleaning

- making cans

- cutting

- cooking

- packing

- labeling

Outputs

Canned vegetables

Services

are deeds, processes and performances

- a service is a time-perishable, intangible experience performed for a customer acting in the role of a co-producer

Tangible output

Production of goods

An act

Delivery of services

Service job categories

- government

- Wholesale/retail

- financial services

- healthcare

- personal services

- business services

- education

Operations mgmt includes:

- forecasting

- capacity planning

- scheduling

- managing inventories

- assuring quality

- motivating and training employees

- locating facilities

- supply chain mgmt

Challenges of managing services

- service jobs are often less structured than manufacturing jobs

- customer contact is higher

- worker skill levels are lower

- services hire many low-skill, entry level workers

- employee turnover is higher

- input variability is higher

- service performance can be affecfted by worker's personal factors

Why managing services is much more challenging in the AI era

Ai does not simply make service operations easier; it changes the nature of what managers have to manage

Key decisions of service op mgmt

What - what resources/what amounts

When - needed/scheduled/ordered

Where - work to be done

How - designed/resources allocated

Who - to do the work

Historical summary of op mgmt

Industrial revolution (1770s)

Scientific mgmt (1911)

- mass production

- interchangeable parts

- division of labor

Human relations movement (1920-60)

Decision models (1915, 1960-'70s)

influence of asian manufacturers (1980-)

Peter Drucker

- The father of modern management

- coined the term "knowledge worker"

- inventor of the concept of mgmt by objectives (MBO)

Efficiency

using resources wisely

Effectiveness

achieving organizational goals

Quality

meeting customer expectations; and

Cost

controlling expenses while creating value

Competitiveness

How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services

Competing using marketing

- identifying consumer wants and needs

- pricing

- advertising and promotion

Competing using operations

- Service product design

- Cost

- Location

- Quality

- Quick response

- Flexibility

- Inventory mgmt

- Supply chain mgmt

- Service and service quality

- Managers and workers

Why some organizations fail

- Too much emphasis on short-term financial performance

- Failing to take advantage of strengths and oppurtunities and/or to recognize competitive threats

- Neglecting operations strategy

- Too much emphasis in service product design and not enough on process design and improvement

- Neglecting investments in capital and human resources

- Failing to establish good internal communications and inter-functional cooperation

- Failing to consider customer wants and needs

Strategy

plans for achieving organizational goals

Mission

Explains the existence for an organization

Mission statement

States the purpose of an organization

Goals

Provide detail and scope of mission

Strategies

Plans for achieving organizational goals

Tactics

The methods and actions taken to accomplish strategies

Examples of strategies

- low cost

- scale-based strategies

- specialization

- flexible operations

- high quality

- service

Distinctive competencies

The special attributes or abilities that give an organization a competitive edge

Strategy factors

- Price

- Quality

- Time

- Flexibility

- Service

- Location

Strategy formulation

- Distinctive competencies

- Environmental scanning

- SWOT

- Order qualifiers

- Order winners

Order qualifiers

Characteristics that customers percieve as minimum standards of acceptability to be considered as a potential purchase (musts)

Order winners

Characteristics of an organization's goods or services that cause it to be percieved as better than the competition (wants)

Global strategy

- Strategic decisions must be made with respect to globalization

- What works in one country may not work in another

- Strategies must be changed to account for these differences

- Other issues

- Political, social, cultural, and economic differences

Service operation strategy

The approach consistent with organization strategy, that is used to guide the service operations function

Quality-based strategies

- Focus on maintaining or improving the quality of an organization's products or services

- Quality at the source

Time-based strategies

Focus on reduction of time needed to accomplish tasks

Productivity paradox

Discrepancy between IT investment and IT performance, between input and output

Productivity

A measure of the effective use of resources, usually expressed as the ratio of output to input

Output / input = productivity

Productivity ratios are used for

- Planning workforce requirements

- Scheduling equipment

- Financial analysis

Partial measures

Output/(single input)

Multi-factor measures

Output/(multiple inputs)

Total measure

Output/(total inputs)

Productivity growth=

current period productivity - previous period productivity / previous period productivity

MFP(multi-factor productivity) =

Output / labor + materials + overhead

Process yield

- is the ratio of output of good product to input

- defective product is not included in the output

- service example: ratio of cars rented to cars available to rent

Factors affecting productivity

Capital, quality, technology, management

Other factors affecting productivity

- standardization

- quality differences

- use of internet

- computer viruses

- searching for lost or misplaced items

- scrap rates

- new workers

- safety

- shortage of IT workerss

- layoffs

- labor turnover

- design of the workspace

- incentive plans that reward productivity

Outsourcing

- higher productivity in another company is a key reason organizations outsource work

- improving productivity may reduce the need for outsourcing

Improving productivity

- Develop productivity measures

- Determine critical (bottleneck) operations

- Develop methods for productivity improvements

- Establish reasonable goals

- Get management support

- Measure and publicize improvements

Productivity is not same as efficiency

Singapore General hospital SGH overview

SGH aims to provide excellence in health service through cost-effective methods

Three Key Principles

1. Service - Care to Heal Provide safe, compassionate, and effective care to help patients recover.

2. Educate - Educate to Empower Teach patients and families about their condition and treatment so they can participate in their own care.

3. Innovate - Innovate to Advance Use new technology, research, and improved methods to provide better healthcare.

For example, a patient with diabetes is admitted to SGH with poor blood sugar control.

Care to Heal: Nurses and doctors monitor the patient's blood glucose and provide appropriate treatment.

Educate to Empower: The health service team teaches the patient about medication, diet, exercise, and blood glucose monitoring.

Innovate to Advance: The hospital uses modern technology and evidence-based treatment to improve diabetes management.

In summary: SGH focuses on caring for patients, educating them, and continuously improving health service through innovation.