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Service operations management focuses on managing intangible services rather than tangible goods. Services are defined by their intangibility, inability to be inventoried, inseparability, inconsistency, and involvement of customers. Unlike goods, services cannot be touched, stored, separated into parts, or delivered consistently. Customers are directly involved in service delivery. Effective service operations management considers location of facilities, scheduling of services, and maintaining quality given each service instance is unique. Location, scheduling, and quality focus area are key to optimizing service output and customer satisfaction.

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24 views

For Taxation Assignment Upload

Service operations management focuses on managing intangible services rather than tangible goods. Services are defined by their intangibility, inability to be inventoried, inseparability, inconsistency, and involvement of customers. Unlike goods, services cannot be touched, stored, separated into parts, or delivered consistently. Customers are directly involved in service delivery. Effective service operations management considers location of facilities, scheduling of services, and maintaining quality given each service instance is unique. Location, scheduling, and quality focus area are key to optimizing service output and customer satisfaction.

Uploaded by

Arafat
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Service operations are simply the application of operations management to an intangible good

(i.e. a service). To understand how service operations function, let’s first take a look at what is
considered a service.

Service-Goods Continuum: This simple line graph shows industries that are nearly 100%
service-related at the top and industries that are nearly 100% product-related at the bottom. It is
an illustration of how the service-product continuum is more of a spectrum than a black and
white rule.

Services Defined

An easy way to remember what a service is (compared to a product) is through using the ‘5 I’s of
Services’:

1. Intangibility – Services cannot be touched, shipped, handled, or looked at. They are an
occurrence, not a tangible good.
2. Inventory – Services cannot be stored for later use. They occur, or they do not occur.
3. Inseparability – Services cannot be pulled into different parts or separated (as many
tangible goods can be—which makes operations management quite different for
products).
4. Inconsistency – Services tend to be unique. A teacher may teach you a topic, and another
teacher may teach you the same topic in another course. Each teacher will deliver this
topic somewhat differently. This is a good example of service inconsistency.
5. Involvement – Consumers are often directly involved in the service delivery. A therapist
is a good example of this. The consumer is the center of the service, and thus each
instance of the service is unique based on the individual involved.

Managing Service Operations

This definition offers a great deal of insight when applied to the concept of operational
management. Without a tangible good to ship, handle and produce, operational managers are
instead focused on the execution of an activity to fill a consumer need. This management of an
instance is rather different than the management of a product.

Managing operations is just as critical on the service side as it is on the product side. While there
are countless considerations to be made, many of which are unique to specific organizations or
industries, these core operational decisions are strong indications of the mentality service
management specialists consider:

Location

Choosing where to open a facility, how to lay out the facility, what size is appropriate, and
overall how efficiently a given space can be used relative to the cost are key considerations.
Consider a car mechanic opening a garage. Depending upon how many jobs she anticipates
having within a given period of time, and how many employees she expects to be able to manage
simultaneously, she may want to open a facility with three garages or five garages. It really
depends on how much output she expects she can accomplish, and how much input demand will
provide.

Scheduling

Just as a product manufacturing facility will know when a product will be where, so too do
service operators need to know when a given service should start and what duration of time is
required to complete it. Maximizing output through planning properly can minimize opportunity
costs and maximize revenue, and plays an integral role in operational management of services.
Take a doctor’s office. If they simply had everyone come in whenever they wanted, there would
be times when the staff would have nothing to do (but be obligated to be there, and be paid), and
other times when there would be too much to do and capital and customers would be lost.

Quality

As the ‘5 I’s of Services’ indicate, most services tend to be completely unique. A hair dresser
rarely gives the same haircut twice and, even if they do, it would be cut to fit a different
individual. As a result, managing for high quality output is rather complex. Each execution is
measured relative to the specific instance and that specific consumer, making tools like NPS
surveys and other measures of individual satisfaction highly useful in optimizing. Following
these ratings, operational specialists must consider the comments received and work to find a
way to integrate this feedback into future services.

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