Doctor’s office – job shop or project. All patients do not require the same procedures, namely the service offered are custom in nature. Automatic car wash – assembly line flow. There is a linear sequence of operations common to all cars. College curriculum – can be any: Assembly line flow: if same curriculum is required of all students, batch: if curriculum is tailored to some degree, or project: if curriculum is tailored to individual students. Studying for an exam – project. The studying process is unique to each student for different, unique exams. Registration for classes – assembly line. All students must largely complete the same sequence of steps which vary little regardless of the program of study. Electric utility – continuous process as the product is highly standardized and can be automated to a great degree in order to better achieve a low unit cost. Q2. Why are assembly-line processes usually so much more efficient but less flexible than batch processes? Give three reasons. Reasons for efficiency, but less flexibility of the line than the batch process:
a. Standardization of tasks
b. Standard products
c. Highly automated
d. Specialized equipment
e. Unskilled or semi-skilled labor
Q3. The rate of productivity improvement in the service industries has been much lower than in manufacturing. Can this be attributed to process selection decisions? What problems would be involved in using more efficient processes in service industries? Yes, the rate of productivity improvement in the service industries can be partly attributed to process selection decisions. Service industries typically select a batch or project process to provide customized service. This is usually less efficient than the assembly line or continuous process approach. The problems in using more efficient processes in the service industries are: Possible customer dissatisfaction with standardized product Need for extensive capital investment
Need for high and stable volume, particularly without inventory Difficult to specify exact process sequence
The customer can be involved in the process during production of the service and create unique demands or inefficiencies. Q6. Compare the expensive restaurant, fast-food restaurant, and cafeteria in terms of process characteristics such as capital, product type, labor, planning, and control systems. The project process, typically used for skyscraper construction, probably does lead to higher costs because the volume of skyscraper construction is low. To make a batch process preferred would require construction of some number of identical skyscrapers. This seems both unlikely and aesthetically undesirable. Perhaps, however, sections of skyscrapers could be standardized and produced by batch processes while still maintaining the appearance of unique buildings. This would be a modular approach to the problem. Q7. An entrepreneur is planning to go into the food business. How would he or she decide whether to open a cafeteria, fast-food restaurant, or fine restaurant? What factors should be considered in this decision? He would have to consider marketing operations, and financial aspects of the problem. The factors to be considered are: Cafeteria Fast Food Fine Restaurant
Capital Requirements Heavy initial investment to set up cafeteria line. Low inventory. Medium initial investment, but higher inventory needs. Lower initial investment medium inventory. Market Conditions Need for large body of steady customers; mobile market. Inexpensive market. Competition very intense. Need for large and inexpensive market. Competition fairly intense. Need for expensive Less danger from competition. Labor Low skilled labor at low cost. Low skilled labor at low cost. Highly skilled cooks and waiters required. Technology Most risky. Less risky. Little risk. Q10. What are the strategies of the following organizations? Is the strategy defined in terms of product or process or both? McDonald’s. AT&T Telephone Co. General Motors. Harvard Business School. Distinctive Competence Product/Process McDonald’s Restaurant Fast, inexpensive, quality food, pleasant atmosphere . Product & Process AT&T Telephone Company Highest volume of calls Best technology Process General Motors Its reputation, number of dealers Product & Process
Harvard Business School Case method Process
Q12. A new business is considering starting up a new plant to produce low-volume, standard products. They are hoping that the business will grow
and the products eventually will become successful and sell in high volumes. a. The business should consider using a batch process that is flexible enough to be modified into a line process when the products become successful and sell in high volume. b. The business should expect the need to invest more when it eventually uses a line process. It may be necessary to purchase special purpose equipment when the products sell in high volume for a long period of time. Lower skills, lower pay and more repetitive tasks may characterize the future labor force. Q1. Classify the following services by their degree of customer contact (high, medium, or low). Also, determine how much uncertainty the customer introduces into the system by the ability to make customized service demands (high, medium, or low). Check clearing in a bank.
Bank loan officer.
Customer contact customized service demands
Check clearing in a bank Low Medium
Bank teller High Low
Bank loan officer Medium High
Q5. Describe the service-product bundle for each of the following services: Hospital.
Trucking firm is tangible service – explicit service what the provider does for customer Hospital is psychological benefits – implicit service how customer feels after service Lawyer is physical goods – facilitating goods used during service or received by customer Q10. Why is the service-profit chain important to operations management? The service-profit chain model tries to link all the components required to make an organization successful. According to this model, a company that performs well in one aspect and poorly in another will eventually develop problems that affect the entire organization. This working model highlights the importance of the links between quality management, a good work force and exceptional service to the customer. Q14. How can we use the service matrix to improve service operations? The Service Process Matrix is a classification matrix of service industry firms based on the characteristics of the individual firm’s service processes.
The Service Process Matrix can be useful when investigating the strategic changes in service operations. In addition, there are unique managerial challenges associated with each quadrant of the matrix. By paying close attention to the challenges associated with their related classification, service firms may improve their performance. Also, the Service-System Design Matrix is a useful tool for understanding the different elements Service Design Matrix of a service system. Q16. What key factors are most firms seeking when they offshore services? Transaction-intensive services becoming commoditized.
Professional services more commonly offshored
High-end niche providers are globally dispersed
Firms moving fast to scoop up global talent
Collaboration and maintaining quality challenging with globally dispersed providers