Transcript Service Supply Chain Management

Chapter 15
Service Supply
Relationships
Deming’s 14-Points
Point 4
End the practice of awarding business
on price tag alone.
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Learning Objectives
1.
Contrast the supply chain for physical goods
with the customer-supplier duality of services.
2.
Discuss the challenge of managing service
supply relationships.
3.
Classify business services based on the focus
of the service and its importance to the
outsourcing organization.
4.
Discuss the managerial considerations to be
addressed in outsourcing services.
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Supply Chain for Physical Goods
Suppliers
Recycling/Remanufacturing
Process
and
Product
Mfg
Distribution
Retailing
Customer
Customer
Service
Design
Material transfer
Information transfer
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Customer-Supplier Duality in Service
Supply Relationships (Hubs)
Supplier
Service
Design
Material transfer
Service
Provider
Customer
Information transfer
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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
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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
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Sources of Value in Service
Supply Relationships

Managing Productive Capacity
1. Transfer
make knowledge available web based FAQ
2. Replacement
substitute technology for server digital blood pressure device
3. Embellishment
enable self-service by teaching change surgical dressing

Management of Perishability
1. Time allotment based on “best use”
2. Idle time for training
real-time schedules
computer-based (mobile data terminals)
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Outsourcing Services
Benefits
1.
Allows the firm to focus on its core
competence
2.
Service is cheaper to outsource than perform
in-house
3.
Provides access to latest technology
4.
Leverage benefits of supplier economy of
scale
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Outsourcing Services
Risks
1.
Loss of direct control of quality
2.
Jeopardizes employee loyalty
3.
Exposure to data security and customer privacy
4.
Dependence on one supplier compromises future
negotiation leverage
5.
Additional coordination expense and delays
6.
Atrophy of in-house capability to perform service
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Outsourcing Process
Need Identification
Information Search
Problem Definition
"Do-versus-Buy" Analysis
Involve Interested Parties
Specification Development
Vendor Selection
References
Personal Contact
Recommendations
Trade Directory
Experience
Reputation
References
Cost
Location
Size
Performance Evaluation
Identify Evaluator
Quality of Work
Communication
Meet Deadlines
Flexibility
Dependability
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Taxonomy for Outsourcing
Business Services
Importance of Service
Focus
of
Service
Low
High
Facility Support:
Equipment Support:
Property -Laundry
-Repairs
-Janitorial
-Maintenance
-Waste disposal
-Product testing
Employee Support:
Employee
Development:
People -Food service
-Plant security
-Training
-Temporary personnel -Education
-Medical care
Facilitator:
Professional:
-Bookkeeping
-Advertising
Process -Travel booking
-Public relations
-Packaged software
-Legal
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Outsourcing Considerations
Focus on Property
Facility Support Service
• Low cost
• Identify responsible party to evaluate performance
• Precise specifications can be written
Equipment Support Service
• Experience and reputation of vendor
• Availability of vendor for emergency response
• Designate person to make service call and to
check that service is satisfactory
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Outsourcing Considerations
Focus on People
Employee Support Service
• Contact vendor clients for references
• Specifications prepared with end user input
• Evaluate performance on a periodic basis
Employee Development Service
• Experience with particular industry important
• Involve high levels of management in vendor
identification and selection
• Contact vendor clients for references
• Use employees to evaluate vendor performance
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Outsourcing Considerations
Focus on Process
Facilitator Service
• Knowledge of alternate vendors important
• Involve end user in vendor identification
• References or third party evaluations useful
•Have user write detailed specifications
Professional Service
• Involve high level management in vendor
identification and selection
• Reputation and experience very important
• Performance evaluation by top management
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