Service Operations and Management - Assignment Example

Part A defining terms

The system approach is applied in the evaluation of market factors that influence profit of the business.

Five forces are the tool used in the analysis of competition within a business.

Dematerialize is to reduce the number of raw materials required to serve economic purposes.

Operation management is to administer all practices required within a business to come up with the highest efficiency in an organization.

Decouple is to de-associate all profit benefits from its sales.

Inductive reasoning is the reasoning whereby all the premises give truth that leads to a conclusion. The truth within the conclusion based on the premises.

Offshoring is to get a product or service from another country. This does not mean that the products are not provided within the country, but the company wants to get it from outside.

Roll-Ups are procedures that investors from private firms use to acquire small companies that are within the same market.

DEA-for efficiency is the ratio between the summation of the weighted inputs and the outputs.

Outsourcing is getting a service or a product from a third party industry. This is to source something, for instance, to manufacture a product that would be used by another company.

Service concept is a phrase used to define what and how of designs of a service, and it helps in the mediation of strategies of an organization and the needs of the customer.

Experience economy is the long-term changes in the structure of the economy that has been taking place for the last two decades.

E-commerce vs. E-service: E-commerce is an electronic selling and buying of services and goods. While E-service entails online services that are found on the internet. This is where buying and selling of goods can be done.

Escapist is someone that does not reside in the world of reality, but the person instead fantasizes dreams and wishes.

Esthetic is something that has features of appreciation of good taste or beauty.

Strategic positioning is the essence of a company’s position considering how it serves its customers. This is to say the industry retain, attracts and satisfy the customers.

Brick & Mortar is the presence of an organization or business in the form of a structure. A company owns retail stores, warehouses, and production facilities.

Logistics is found within the supply chain management that implements, plan as well as control reverse flow, efficient, and effective forward and stores, goods, services and information between the original point and consumption point to meet the requirements of the customer.

Tactical execution is the clarification of what is expected in business so that to deliver on them.

TQM/TQEM is a method that is used in the application of total quality approaches in management to incorporate strategies of the environment.

Part 2

Question 1

The supply chain is the sequence of processes that are undertaken in production and distribution of a commodity. It is a structure of organization, activities, information, and resources involved in transferring a product or service from the producer to the consumer. Value added is the process of enhancing a product by adding features that improve the quality of the product. Value adding is a set of process that improves the quality of a product or service to satisfy the needs of a customer. Most businesses use the value chain to improve quality of the final product (Metters, King-Metters, Pullman, & Walton, 2008). A value chain is a set of activities performed to deliver valuable products/services. According to Porter, the value chain is a good tool to identify the areas that can be exploited to improve the quality of a product or service. In the health sector, supply chain and value added can be used to integrate and coordinate processes, the flow of information, planning process, internal and external organizational processes, market approach and market development (Metters, King-Metters, Pullman, & Walton, 2008). Through this integration, the health sector is able to deliver quality healthcare while at the same time managing cost.

Question 2. The difference between manufacturing industries and service industries

MANUFACTURING INDUSTRY

SERVICE INDUSTRY

Tangible output - shoes, blanket, plate, etc.

Intangible output - consultancy, maintenance

A product can be produced and consumed at different stages/ locations

Service consumed at the point of production

There is no direct contact between the consumer and the producer

There is direct contact between the consumer and the producer

The focus is on machinery and labor

Focus is on expertise and skills of service provider

Product centered processes

Human centered processes

Output/ product can be homogenous

Output/service is always heterogeneous

Output/ product can be stored for future use

Output/ service cannot be inventoried.

The quality of output can be measured easily

Output is not easily measured

Product can be produced without a customer order

Services are produced when a customer requires it

Production process is mostly automated

Service production is labor intensive

Products can be separated from the producer

Services are not separable with the producer

Question 3

The healthcare sector is a service industry because it does not produce tangible products but produce intangible services. In the health sector, the service provided is not separable from the service provided. The nurse or doctor and the patient have to be present for the service to take place (Metters et al., 2008). The service is offered when a patient goes to the hospital seeking treatment, but a doctor or a nurse cannot produce the service before the patient arrives (Zurich, 2017). The health sector satisfies all the above service industry characteristics hence it is a service industry.

The following factors should be considered when designing an operation management system: technological factors, economic factors, demographic factors and competitive market. When designing a health operation management system, decisions should be made on: the needs and wants of customers to be prioritized, whether to add value to the existing products or to create new products/ services, the quality targets, the cost targets and the processes to be adopted for the operation design to be successful (Metters et al., 2008).

Question 4

There are two main dominant views of strategic position that is resource based and position based strategies. The position-based approach emphasizes on the analysis of external factors of a business to achieve competitive advantage. The external factors include political, environmental, economic, legal, social and technological factors (Zurich, 2017). The resource-based approach emphasizes on the organizational resources and internal capabilities of business in achieving competitive advantage (Metters et al., 2008). The internal factors include processes, knowledge, skills, and expertise. The position-based approach is the best to apply since it helps to identify the external factors that are likely to hinder or promote the success of the business.

Question 5

In calculating the safety stock and the numbers in the case given, the number of branches will be assumed not to affect the distribution. The safety stock for the website and the combined branches will also be assumed the same since when the company changes from the branches to the website, it will have to worry about other costs like transport and warehouse expenses.

The safety stock can be calculated by the formula safety cost = Z × σLT × D avg

Where Z stands for the desired service level, σLT the standard deviation of the lead-time and D avg the mean or average of the demand

From a normal distribution chart, the service factor for a service level of 97% is found to be 1.88. Hence

Safety stock = 1.88* 6 * 42 =474 units

Total number = mean + safety stock

=474 + 42 = 516 units

Question 6

A customer utility model is a map that highlights the experiences or satisfaction a customer gets after consuming a service. That means services will be tailored to the needs and desires of a customer. A service blueprint is a graphical representation that describes the nature and characteristics of a service to be implemented. A service blueprint is a tool that helps the service designers to develop services that satisfy the needs of the customers (Metters et al., 2008). The elements of a service blueprint are the line of interaction- the point where customers and service interact, the line of visibility- the customer cannot see the service beyond this point and the line of internal interaction- the point where business stops and partners take over. The elements of a customer utility model in the health service system design have increased the level of information flow, openness, customization of services, patient free choice and collaboration (Metters et al., 2008). The difference between customer utility model and service blueprint is that service utility model contains the customer journey in experiencing a service while service blueprint contains the picture of how an organization delivers a service to a customer.

Question 7

Front office personnel support the organization by generating revenue for the organization. The front office tasks include making direct sales to the customer. The back office staff does not directly generate revenue, but they provide vital support and administration. The front office relies on the support of the back office in order to deliver its mandate properly (Metters et al., 2008). Service firms decouple front office tasks from back-office tasks because some activities and tasks do not require high levels of customer contact. Through decoupling, front office personnel gets enough time to deal with the clients while the back office dome of the tasks that do not require regular customer contact (Metters et al., 2008). The speed and accuracy of implementing a decision to decouple are very helpful in delivering services that meet the needs of a customer. This is because of customers like the good flow of functions without delay’ When the front and back office tasks are not properly coordinated, then the customer will not experience satisfactory services.

Question 8

When using linear programming to formulate the efficiency score for each branch, it is important to note the inputs and outputs. This is because efficiency is the rate of output to input. However, it gets complicated where there are multiple inputs and outputs. In this case, there are two sets of outputs. Hence, it is important to formulate weighted numbers for the two outputs. This can be done by coming up with a price for each output in terms of cash.

Hence assuming both visits and procedures have a weight of 1 dollar, the efficiency score can be calculated easily.

For branch A we have an input of 270$ and output of 17*1 for visits and 230*1 for procedures.

Adding the two outputs, we get 247$. Hence the efficiency score is the ration of 247$ to 270$ which becomes 0.91. For D, it becomes 0.97.

Question 9

System approach refers to a formulated sequence of thought in any field, ranging from service delivery, management and manufacturing. It works to show the interdependence that exists among all the factors that are found within that particular setting, both internal and external (Zurich, 2017). There are several steps of system approach, and they include a definition of the problem, identification of the alternative solutions, evaluation of these alternative solutions, selection of the most appropriate solution from the above alternatives, the implementation of the solution and finally the follow-up (Metters et al., 2008). These steps can fit in any industry from manufacturing to the service industry. However, there are some steps, which are applicable to different industries more than others are. In the case of the service industry, the step of evaluating the alternative solution can be skipped. It is not as relevant as the rest of the steps in the service industry. This is because when providing a particular service to the industry, the provider of the service does not have any alternative other than listening to his customers (Metters et al., 2008). Hence, there is no evaluation of solutions, but rather the tailoring and implementation of the customer preference.