Transcript Service Supply Chain Management

Service Supply Relationships
Learning Objectives
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Contrast the supply chain for physical goods with the
customer-supplier duality of services.
Discuss the challenge of managing service supply
relationships.
Classify business services based on the focus of the
service and its importance to the outsourcing
organization.
Discuss the managerial considerations to be
addressed in outsourcing services.
Discuss the challenges of delivering services in the
field.
Prepare a delivery route using the Clarke-Wright
algorithm.
Supply Chain for Physical Goods
S up p liers
R ec yclin g/R e m a n u facturin g
P ro cess and
P rod uct
D esig n
M anu facturing
M aterial transfer
D istrib utio n
R etailin g
Info rm a tio n tran sfer
C u sto m er
C u sto m er
S ervice
Customer-Supplier Duality in
Service Supply Relationships (Hubs)
S upplier
S ervice
D esign
M aterial tran sfer
S ervice
P rovider
Info rm a tio n tran sfer
C ustom er
Single-Level Bidirectional
Service Supply Relationship
Service
Category
Customer
-Supplier
>Input
Output>
Service
Provider
Minds
Student
>Mind
Knowledge>
Professor
Bodies
Patient
>Tooth
Filling>
Dentist
Belongings
Investor
>Money
Interest>
Bank
Information
Client
>Documents
1040>
Tax Preparer
Two-Level Bidirectional Service
Supply Relationship
Service
Category
Customer
-Supplier
>Input
Output>
Service
Provider
>Input
Output>
Provider’s
Supplier
Minds
Patient
>Disturbed
Treated>
Therapist
>Prescription
Drugs>
Pharmacy
Bodies
Patient
>Blood
Diagnosis>
Physician
>Sample
Test Result>
Lab
Belongings
Driver
>Car
Repaired>
Garage
>Engine
Rebuilt>
Machine
Shop
Information
Home
Buyer
>Property
Loan>
Mortgage
Company
>Location
Clear Title>
Title
Search
Sources of Value in Service
Supply Relationships
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Bi-directional Optimization
Managing Productive Capacity
- Transfer: make knowledge available (e.g.
web based FAQ database)
- Replacement: substitute technology for
server (e.g. digital blood pressure device)
- Embellishment: enable self-service by
teaching (e.g. change surgical dressing)
Management of Perishability
Impact of Service Supply Relationships
E lem en t o r L in k
C h an n el S tru ctu re
S erv ice R ecip ien t
C h an n el In teg ratio n
B efo re
F u n ctio n al silo s
P assiv e
V ertical (o w n the ch an n el to
in tegrate)
F lo w o f S erv ice
F lo w o f In fo rm atio n
(u p stream )
A v ailab le w aitin g for d em an d
P u ll: m an u al rep o rtin g of
d em an d d ata resu lts in
d elay ed m an ag em en t
resp o n se.
L ittle o r n o k n o w led ge o f
reso u rce d ep lo ym en t
P red o m inan tly in -h o u se;
lo cally o p tim ized for
efficiency
F lo w o f In fo rm atio n
(d o w n stream )
B u sin ess P ro cesses
D em an d M an ag em en t
L im ited to u se o f
ap p o in tm en ts an d
reservatio n s.
A fter
P ro cess o rientatio n
A ctiv e as a co -pro d u cer
V irtu al (IT an d oth er
m ech anism p erm it in tegratio n
w ith o u t o w n ership )
A ctiv ated u p o n d em an d
P u sh : h ig h lev el of co n n ectivity
an d tran sparency w ith fast or
in stantan eo u s access to m o st
recent d em an d data.
R eal-tim e track in g an d
d isp atch in g
In -h o u se fo r k ey pro cesses,
o th ers o ut-so urced fo r
flexib ility; integ rated an d
sy n ch ro n ized to m atch su p p ly
w ith d em an d
P ro activ e in v olv in g cu sto m er in
sch ed u lin g to achiev e bid irectio n al o p tim izatio n
Impact of Service Supply Relationships
E lem en t or L in k
C apacity M anagem ent
B efore
L im ited to use of part-tim e
em ployees
F acilitating G oods
H igh; in anticipation of
dem and
Inflexible; standardized and
im personal
S tatic; fixed daily schedules
S ervice D elivery
R outing and scheduling
N ew S ervice D esign
P ricing
International
O perations
M arketing initiatives based on
firm 's perception of custom er
needs
F ixed
F ocus on dom estic m arket
A fter
C reative use of cross-trained
em ployees, outsourcing, and
custom er self-service.
L ow er; ow ing to process
transparency
F lexible; personable w ith
custom ization possible.
D ynam ic; based on system
connectivity and process
visibility
V irtual value chain design w ith
custom er data base inform ation
driving new services
V ariable; yield m anagem ent
prom otes off-peak dem and and
avoid idle capacity
G lobal reach w ith Internet
Outsourcing Services
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Benefits
- allows the firm to focus on its core competence
- service is cheaper to outsource than perform inhouse
- provides access to latest technology
- leverage benefits of supplier economy of scale
Risks
- loss of direct control of quality
- jeopardizes employee loyalty
- exposure to data security and customer privacy
- dependence on one supplier compromises future
negotiation leverage
- additional coordination expense and delays
- atrophy of in-house capability to perform service
Outsourcing Process
Nee d Ide ntification
Problem Definition
"Do-versus-Buy" Analysis
Involve Interested Parties
Specification Development
Information Se arch
References
Personal Contact
Recommendations
Trade Directory
Experience
Reputation
References
Pe rformance Ev aluation
Identify Evaluator
Quality of Work
Communication
Ve ndor Se lection
Meet Deadlines
Flexibility
Dependability
Cost
Location
Size
Taxonomy for Outsourcing
Business Services
Im p ortan ce of S ervice
P roperty
F ocu s
of
P eople
S ervice
P rocess
L ow
F acility S u p p ort:
-L aundry
-Janitorial
-W aste disposal
E m p loyee S u p p ort:
-F ood service
-P lant security
-T em porary personnel
F acilitator:
-B ookkeeping
-T ravel booking
-P ackaged softw are
H igh
E q u ip m en t S u p p ort:
-R epairs
-M aintenance
-P roduct testing
E m p loyee D evelop m en t:
-T raining
-E ducation
-M edical care
P rofession al:
-A dvertising
-P ublic relations
-L egal
Outsourcing Considerations
F ocu s on P rop erty
F acility S upport S ervice
• L ow cost
• Identify responsible party to evaluate perform ance
• P recise specifications can be w ritten
E quipm ent S upport S ervice
• E xperience and reputation of vendor
• A vailability of vendor for em ergency response
• D esignate person to m ake service call and to
check that service is satisfactory
Outsourcing Considerations
F o cu s o n P eo p le
E m p lo yee S u p p o rt S erv ice
• C o n tact v en d o r clien ts fo r referen ces
• S p ecificatio n s p rep ared w ith en d u ser in p u t
• E v alu ate p erfo rm an ce o n a p erio d ic b asis
E m p lo yee D ev elo p m en t S erv ice
• E x p erien ce w ith p articu lar in d u stry im p o rtan t
• In v o lv e h igh lev els o f m an agem en t in v en d o r
id en tificatio n an d selectio n
• C o n tact v en d o r clien ts fo r referen ces
• U se em p lo yees to ev alu ate v en d o r p erfo rm an ce
Outsourcing Considerations
F o cu s o n P ro cess
F acilitato r S ervice
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K n o w led g e o f altern ate v en d ors im p o rtan t
In v o lv e en d u ser in v en d o r id en tificatio n
R eferen ces o r th ird party ev aluatio n s u sefu l
H av e u ser w rite d etailed sp ecificatio n s
P ro fessio n al S erv ice
• In v o lv e h ig h lev el m an ag em en t in v en d o r
id en tificatio n an d selectio n
• R ep u tatio n an d ex p erien ce v ery im p ortant
• P erfo rm an ce ev alu atio n b y to p m an ag em en t
Topics for Discussion
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What are some possible disadvantages
associated with the product postponement
strategy?
Discuss the similarities and differences in the
product postponement strategy used by
Hewlett-Packard and Taco Bell?
Discuss the implication of service outsourcing
on employees, stockholders, customers, and
host country economy when a firm
outsources a call center overseas.
Interactive Exercise
The class divides into small groups and
members come up with examples of
multilevel bidirectional service
relationships (i.e, service supplier
relationships with three or more levels).
Be prepared to argue why such service
relationships are so rare.
Peapod – Smart Shopping for Busy People
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Where are opportunities for
bidirectional optimization at Peapod?
How can Peapod manage service
perishability?
How can Peapod manage productive
capacity?
Suggest reasons why Peapod has not
yet become profitable.