1. 1 SERVICE ORGANIZATIONS AND OPERATIONS 1.Recognize the service component in an organization 2.Understand the service encounter 3.Understand the customer factor in service success 4.Understand how to formulate a service strategy 5.Understand how to design/plan a service organization 6.Understand how to operate/manage a service organization 7.Learn OM tools and techniques useful in service operations management

2. 2 SERVICES IN THE U.S. ECONOMY Chapter 1 Service sector growth pp. 4- –By employment/GDP share/business starts/International trade Theories explaining service sector growth 8 Customer satisfaction with services declined 2 Goods and services – dividing line 2- –Facilitating services 3 Services produce time, place, form or psychological utilities – to individuals/businesses 3

3. 3 THE SERVICE ENCOUNTER Chapter 2 Manufacturing production systems from Mgt. 339 –Unit, Batch, Line, Continuous Service systems p. 15 –Intangible output conversion systems –Hybrid conversion systems Characteristics of services – I/I/P/Vp.17 Service organization p. 18- –See operations interactions with marketing and HR Exhibit 2-4

4. 4 THE SERVICE ENCOUNTER The most important factor in customer perception of service quality customer satisfaction repeat purchase decisions p. 14 Where –customer meets servicep. 26- –encounters the delivery system and the tangibles –encounters other customers p. 29 Types/Elements/Factors in service encounters –Readings/class discussion following week

5. 5 CUSTOMERS – THE FOCUS IN SERVICE MANAGEMENT Chapter 3 Emergence of the importance of customer in management theory. P. 41- –ACSI, TQM component, Baldrige award category, NCQA focus in healthcare Customer needs –As a human being – Maslow p. 43- –As a consumer – consumer behavior models 44- –Consumer decision making models 45 –Consumer evaluation of goods and services 49 –Three “qualities” in service evaluation 49, 131 –Information sources 50

6. 6 CUSTOMERS Customer Needs (continued) –The concept of value Chapter 5 pp. 87-92 –Model of service value with 6 factors p. 88 –Other factors affecting needs 52- –Age - Ethnic/cultural background –Size of household –Gender –Education, occupation and income

7. 7 HOW CUSTOMERS EVALUATE SERVICES Five dimensions of service quality 331 –Reliability –Responsiveness –Assurance –Empathy –Tangibles The original indicators used to measure the dimensions –See SERVQUAL model Handout How valid are these dimensions? Do they hold for any service? Do they hold across demographic factors (gender, age etc.) ? Do they hold across cultural diversity ? Are they really distinct dimensions ? Can they be used by managers to really understand customer perceptions and improve services ? Are all five dimensions equally important or is their a ranking ? Readings and class discussion following week/s

8. 8 Globalization of Services Service management in International Settings Chapter 4 Increase in demand for services in international trade. Reasons 62- –Services we “sell” globally –Services we export/outsource/subcontract Advantages of going global with services 64- Global environment has problem areas 67- Different ways to sell services globally 68- Different combinations of product-service package AND consumer/service producer interaction 70- Discussion: special issues in selling services globally. Special issues in outsourcing services globally. –Readings and discussion following week

9. 9 FORMULATING A SERVICE STRATEGY Chapter 5 Mgt 339 review: –What is strategy ? Also p. 93 –Strategy formulation process. SWOT p. 98 –Understanding the competition. Porter’s model p. 94- –Porter’s Generic (business level) competitive strategies. P. 97 Also called “competitive priorities” in 339 –Strategy implementation: Policies + Programs + Budgets

10. 10 FORMULATING A SERVICE STRATEGY Formulating a competitive service strategy p. 100- –Target market segmenting + Positioning == SWOT –Service concept + Value/cost leveraging == Business level strategies a.k.a competitive strategies –Operating strategy + strategy/system integration + service delivery system == Operations strategy + policies –Southwest Airlines example 102- Cooperative strategies; alliances