Service Operations Management

Introduction
Manufacturing, service and agriculture are the major economic activities in any country. In India, manufacturing and services together constitute nearly 75% of the GDP. Moreover, in recent years the growth in GDP is primarily due to the growth in these sectors of the economy. During the last ten years, the share of services in the GDP has grown steadily from about 40% to about 51%. The Union Government began taxing three services in 1994-95. This has grown steadily and as of 2004-05 the number of services taxed has gone up to 71. All these indicate the growing importance of services in the Indian economy and the need to apply management practices to plan and control operations in the service sector. Service organisations respond to the requirements of customers to satisfy some needs and leave certain experiences in the minds of the customer through a service delivery system. This course addresses the strategic and operational aspects of managing service systems. In addition to discussing the design and operational control of service operations, specific issues pertaining to certain sectors of the service industry are also addressed.

Session-wise course outline

Module A. Introduction to Service Operations 1. Understanding Services Economy Global trends in Services Sector; Changing paradigms in Competitiveness of services; Services Manufacturing Continuum Readings: Bitran, G. and Lojo, M. (1993), A framework for analysing service operations, European Management Journal, 11 (3), 271 282. Nambisan, S. (2001), Why service businesses are not product businesses, MIT Sloan Management Review, Summer 2001, 72 80. 2. Role of services in manufacturing firms Recent trends in manufacturing, increased role of services in manufacturing Readings Sawhney, M., Balasubramanian, S. and Krishnan, V.V. (2004), Creating growth with services, MIT Sloan Management Review, Winter 2004, 34 43. Module B. Service Strategy 3. Developing an overall vision for the service system Case: Arvind Eye Hospitals

Readings Heskett, J.L. (1991), Lessons in the service sector in The Service Management Course: Cases & Reading, Free Press, 47 64. Shah, J. and Murty, L.S. (2005), Compassionate high quality health care at low cost: The Arvind Model, IIMB Management Review, 16 (3), 31 43. 4. Developing a service strategy Case: Benihana of Tokyo Readings Schneider, B. and Bowen, D.E., (1999), Understanding customer delight and outrage, Sloan Management Review, Fall 1999 35 45. Fitzsimmons, J.A. and Fitzsimmons, M.J. (2006), Service Strategy, Chapter 3 in Service Management, Mc Graw Hill International Edition, 37 58. 5. Service Positioning & Implications for Service Delivery Design Degree of customer contact, divergence, customization; Service blue printing Readings Metters, R. and Vargas, V., (2000), A typology of decoupling strategies in mixed services, Journal of Operations Management, 18, 663 682. Fitzsimmons, J.A. and Fitzsimmons, M.J. (2006), New Service Development, Chapter 4 in Service Management, Mc Graw Hill International Edition, 77 96. Ravichandran, N, and Bahuguna, D, (2006), Rule bound government agency to customer centric service facility: Can Indian passport offices make the leap?, IIMB Management Review, 18 (1), 59 66. 6. Service Enhancement using Internet Case: ITC eChoupal Readings Rolfe, J., Gregor, S. and Menzies, D., (2003), Reasons why farmers in Australia adopt the Internet, Electronic Commerce Research and Applications, 2 (1), 27 41. Banker, R.D. and Mitra, S. (2006), Procurement models in the agricultural supply chain: A case study of online coffee auctions in India, (Forthcoming) Electronic Commerce Research and Applications. 7. Pricing strategies in Services Readings

Hoffman, K.D., Turley, L.W. and Kelley S.W. (2002), Pricing of retail services, Journal of Business Research, 55, 1015 1023. Shoemaker, S. (2003), The future of pricing in services Journal of Revenue and Pricing Management, 2(3), 271 279. Varian, H.R. (1996). Differential pricing and efficiency, First Monday, 1 (2). 8. Performance issues in service systems Case: Starbucks: Delivering Customer Service Readings Barber, F. and Strack, R., (2005), The surprising economics of people business, Harvard Business Review, June 2005. Berman, B., (2005), How to delight your customers, California Management Review, 48 (1), 129 151. Fleming, J.H., Coffman, C. and Harter, J.K., (2005), Managing your human sigma, Harvard Business Review, Jul. Aug. 2005. Module C. Design of service delivery design 9. Capacity issues in service systems Notion of capacity, Capacity build up strategies Capacity Vs System Performance Readings Bitran, G. and Mondschein, S., (1997), Managing the tug-of-war between supply and demand in the service industries, European Management Journal, 15 (5), 523 536. Fitzsimmons, J.A. and Fitzsimmons, M.J. (2006), Managing Capacity & Demand, Chapter 12 in Service Management, Mc Graw Hill International Edition, 351 370. 10. Mid Term Exam

11. Queueing Theory Applications in Service Systems Basic queueing systems will not be discussed; More useful models will be dealt with. Readings Treville, S, Smith, I., Rolli, A. and Arnold, V., (2006), Applying operations management logic and tools to save lives: A case study of the world health organizations global drug facility, Journal of Operations Management, 24 (4), 397 406.

Fitzsimmons, J.A. and Fitzsimmons, M.J. (2006), Capacity Planning & Queueing Models, Chapter 14 in Service Management, Mc Graw Hill International Edition, 443 463. 12. Simulation as a tool for design of services Use of simulation software for modeling Nature of design issues addressed using simulation Readings Harrel, C., Ghosh, B.K. and Bowden, R. (2000), Modeling Service Systems Chapter 13 in Simulation using PROMODEL, Mc Graw Hill, 321 337. Angelis, V.D., Felici, G. and Impellaso, P. (2003), Integrating simulation and optimisation in healthcare management, European Journal of Operational Research, 150, 101 114. 13. Simulation Applications in Service System Design Case: Ambulance Services RK Mutt Readings Fujiwara, D. and Makjamoren, T. and Gupta, K.K. (1987), Ambulance deployment analysis: A case study of Bangkok, European Journal of Operational Research, 31, 9 18. Spear, J., (2005), Fixing healthcare from the inside, today, Harvard Business Review, Sep. 2005. 14. The services supply chain Case: Dubbawallahs of Mumbai (A) Readings Ellram, L.M., Tate, W.L. and Billington, C. (2004), Understanding and Managing the Services Supply Chain Journal of Supply Chain Management: A Global Review of Purchasing & Supply, 40 (4), p17-32.

Module D. Application Domain in Services 15. Services Management in IT/ITES Sectors Off-shoring/Outsourcing Strategic dimension & Competitive advantage Case: Wipro Technologies: The Factory Model Readings

Karmarkar, U. (2004), Will you survive the service revolution?, Harvard Business Review, 82 (6), 101 107. 16. Services Management in IT/ITES Sectors Capacity Management Issues Models for Manpower Planning Allen, S. and Chandrasekhar, A. (2000), Outsourcing Services: The contract is just the beginning, Business Horizons, March April, 2000, 25 34. 17. Risk & Security issues in Financial Services Sector: Role of technology Guest Speaker: To be identified 18. Services Management in financial services Case: Personal Finance Limited Readings Leek, S., Turnbull, P.W. and Naude, P. (2004), A comparison of manufacturers and financial services suppliers and buyers use of relationship management methods, Industrial Marketing Management, 33, 241 249. 19. Term Paper Presentations 20. Term Paper Presentations & Conclusions

Evaluation
Mid Term End Term Term Paper Case Analysis Total : 30 : 30 : 20 : 20 points points points points

: 100 points

Group Work
The students will assign themselves into groups of five and work on the assignments and the term paper. All submissions are due at the beginning of the class in which the respective cases are scheduled. Each group will analyse two cases and make a submission for evaluation. Similarly, each group will write a term paper and make a submission for evaluation at the end of the term.