Introduction to service operations management
- 1. Service Operations Management By Dr. Abhay K Srivastava
- 2. Why Service Operations ? • Today, services have taken a center stage and most economies of the world are focusing on service sector. • The service sector is contributing a huge share in GDP growth of many countries including India, so it is imperative to understand the concepts and importance of services. • Understanding services from the perspective of operations management is even more important because there is a shortage of trained human resources in service operations. • The present course will equip you with knowledge of service operations which will help you in assessing, analyzing, guiding and managing services in future careers.
- 3. Course Learning Outcomes (CLOs) • Familiarize with the importance and challenges of service operations and be able to differentiate between manufacturing and service operations. • Interpret focused and unfocused service operations and learn to develop service design. • Acquire knowledge about types of service processes and strategies to drive business growth and development. • Able to apply tools and techniques including demand forecasting and Queuing theory for planning, managing and motivating service providers for improving service performance through effective leadership and team building. • Analyze customer segmentation and service quality gaps to undertake appropriate measures for minimizing dissatisfaction and enhance customer delight. • Formulate service strategy and implementing them to gain competitive advantage.
- 4. Contribution of service sector in India Economic Survey 2019-20 • The services sector accounts for 55% of total India's GDP • The industrial sector is at the second spot and contributing around 29% of the Indian GDP. • The agriculture sector is at the third spot and contributing around 16% of the Indian GDP.
- 5. Nation % of World Labor % Ag % Goods % Services China 21.0 26 28 46 India 17.0 43 25 32 USA 4.8 2 20 78 Indonesia 3.9 45 16 39 Brazil 3.0 23 24 53 Russia 2.5 12 23 65 Japan 2.4 5 26 69 Nigeria 2.2 70 10 20 Bangladesh 2.2 63 11 26 Germany 1.4 3 28 69 Percent Employment in Services (2018-19) 1-5
- 6. Service Sector: Pillar of Economy • Services play a central role in the economies of both developed and developing countries. They account for over half of the gross domestic product of all developed economies and constitute the single largest sector in most developing economies. • The service sector comprises Trade, Hotels & Restaurants, Construction, Electricity, Transport, Storage, Communication, Banking, Insurance, Education & Research, Medical & Health, Ownership of Dwellings, Real Estate & Business Services and Other Services (Business Services, Computer & Related Services, Legal Services, Real Estate Activities, Renting of Machinery & Equipment and Social & Personal Services). • Main reasons behind the growth of services include rapid urbanization, the expansion of the public sector and increased demand for intermediate and final consumer services. Access to efficient services has become crucial for the productivity and competitiveness of the entire economy.
- 7. 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
- 8. Types of Services • Business Services: used by business organizations like banking, insurance, wholesaling, Retailing, transportation, warehousing, communication • Social Services: provided to achieve some social goals like eradicating poverty, providing Education in Slum areas • Personal Services: Different customer experience differently like recreational services, restaurants, Healthcare
- 9. Stages of Economic Activity • The three-sector model in economics divides economies into three sectors of activity: extraction of raw materials (primary), manufacturing (secondary), and services (tertiary). • According to the model, the main focus of an economy's activity shifts from the primary, through the secondary and finally to the tertiary sector. Countries with a low per capita income are in an early state of development; the main part of their national income is achieved through production in the primary sector. • Countries in a more advanced state of development, with a medium national income, generate their income mostly in the secondary sector. In highly developed countries with a high income, the tertiary sector dominates the total output of the economy. • The model was developed by Allan Fisher, Colin Clark,and Jean Fourastié.
- 10. Stages of Economic Activity Primary (Extractive): Agriculture, Mining, Fishing, Forestry Secondary (Goods-Producing): Manufacturing, Processing Tertiary ( Services): Health care, Restaurants, Hotels, Transportation, Maintenance Quaternary (Information Services) Education, research, consulting, Information management ,financial planning Quinary (Human Services) ( creation of information and new technologies, Arts, Recreation, govt. services
- 11. What is Service? • Services are processes and performance that produce time, place, form or psychological utilities for customers. • A cleaning service saves the customer time. Department stores and grocery stores provide many commodities for sale in one convenient place. An online broker puts together information in a form more usable for the investor. A night out at a restaurant or movie provides psychological refreshment in the middle of a busy workweek
- 12. Service provided and received