Service Operations Management - Essay Example

Service Operations Management Name Institution Date Table of Contents Running Head: SERVICE OPERATIONS MANAGEMENT 1 1 Table of Contents 1 SERVICE OPERATIONS MANAGEMENT 14 2 Executive summary 3 Introduction 4 Positioning of Mass Customization 5 Definition of the service offering 6 A description of internal operations designed to support mass customization service concept 7 How customer behaviour might influence company performance and an outline plan for managing its impact 8 Definition of the operating system to support the service offering 9 A description the customer management system 10 Conclusion 10 References 12 Executive summary Information Technology solutions have for the past 30 years evolved dramatically from management of managers to business service management. However, the increased reliance on interactive services among businesses in order to drive revenue as well as rapid pace of advancement in technology such as virtualized data centers, cloud computing and service oriented architectures, have made a huge gap between last generation of the management tools and service quality of businesses. As a result, there is a need for a new solution in the management of new generation services and the associated technology. Service operations management based on mass customization becomes the next-generation solution which can harness both traditional and cloud associated enterprise resources. This becomes important in assuring and enhancing the quality and predictability of the IT-based services necessary in driving businesses. The report provides an understanding of how mass customization as a service operation can be effectively used to assure and enhance the quality and predictability of the IT-based service industry so as to drive its business. The task involves performing a competitive analysis of the IT industry by identifying the dominant players within the industry and articulation of the need for new service. A consideration is given on the issues of quality and customization. Positioning of mass customization where it is expected to compete. Definition of the service to offer and a description of the design of internal operations to support the service concept, explanation on the influence of customer behavior on company performance and definition of the operating system and customer management system to support the service offering will be provided. Introduction Most of the companies today are forced to react to the increasing individualization of demand. However, growing competitive pressure dictates that associated costs are also required to continuously decrease. As a result, companies need to adopt strategies that embrace a closer reaction to the needs of customers and efficiency. Mass Customization becomes important in meeting the challenge through the offer of individually customized goods and services based on mass production efficiency. The development in information technology such as self-service technology, mobile technology as well as social network has radically changed the manner in which service organizations operate their front and back offices. Therefore, the incorporation of information technology within service operations creates new opportunities and challenges that range from mass customization to the service co-creation (Silveira, Borenstein & Fogliatto, 2001). The exceptional origin for the Service Operations within the Information Era, to a large extent invites both researchers and practitioners from various fields such as decision sciences, information systems as well as service research to provide original and unpublished study abstracts to address issues that are related to information technology in its service operations. Submissions are solicited to span multiple scales – from technology application to service innovation, and customer experience management. Managed service providers within the IT field normally have the latest, leading software and technology which they offer at a low price less compared to how it would cost a business to purchase or develop it on its own (Chase, Robert & Aquilano, 2006). Service management is considered as a necessary evil within the business world, yet, it is a driving force based on the idea of business strategy.  Therefore, it becomes important to understand that service operation management varies completely based on the business and industry offered in. This implies that a good service manager will be able to optimize his or her service to specified needs of the clients. The study presents the significance of implementing mass customization within the IT industry and how it can be positioned in order to effectively and efficiently meet the specific needs of customers (Hart, 1995). Positioning of Mass Customization Majority of the implementations of mass customization are considered to be operational, such as the configurators of software-based product who possibly add or change the functionalities of their core product or to develop complete custom enclosures from scratch. However, this degree of mass customization, has had very limited adoption since companies which have emerged to be successful with the business models of mass-customization tend to supply only purely electronic products. This should not be the case with contemporary mass customizers who have failed to offer an alternative to the mass manufacture of material goods. Service industries are also waking up to the power of a mass customization orientation. Therefore, offering the new mass customization will be unique as it will provide varied services and every time the customer needs. This will be an alternative service offer to the Call centres that are leveraging agent-enabled voice technology in order to develop pre-programmed as well as pre-recorded call flows to manage customers' inquiries (Duray et al. 2000). the new service offer will solve the limitation caused by the agent who execute the process and varying it only at their own most convenient time based on something that the customer suggests or needs, as opposed to the idea of varying everything, every time that is proposed in the new mass customization service operation management. Although mass customization has been considered as a successful service operations strategy across the manufacturing and service industries, the wider implications of applying its approaches within the broader industrial and economic environment are still not yet well understood. Most of the companies today are forced to react to the increasing individualization of demand and the growing competitive pressure that dictates costs must continuously decrease. As a result, companies are required to adopt strategies that can embrace a closer reaction to the increasing customers’ needs and efficiency. In this case, mass Customization will ably meet this challenge through the offer of individually customized products and services at the mass production efficiency (Blecker, et al. 2004). Definition of the service offering Mass customization within the marketing, call centres, manufacturing and management, is the application of flexible computer-aided manufacturing systems to aid in the custom output. Such systems incorporate the low unit costs used in mass production processes with flexibility of a person or individual customization. It is considered a new frontier within the business competition for manufacturing and service industries (Lars, 2006). Mass customization is a tremendous increase in the variety and customization without a subsequent raise in costs. It also involves the mass production of specific and customized services so as to provide strategic advantage as well as economic value. This service offer will involve a method of effectively postponing the marketing task of product differentiation for a specific customer in anticipation of the latest possible point in its supply network. Therefore, the concept of mass customization will be attributed to the production of goods and services in order to meet individual needs a customer with the urgent mass production efficiency. Additionally, mass customization will be used as a strategy to create value through a form of company-customer interaction based at the manufacture and assembly phase of the operations level so as to produce customized products with the same production cost as well as monetary price to those of the mass-produced products (Tseng & Jiao, 2001). A description of internal operations designed to support mass customization service concept In order to achieve equivalent efficiency of mass production, the IT industry will have to involve in the practices of mass customization that meet several conditions. This will include a fixed solution space characterized with a stable and dynamic responsive process. As a result of meeting such conditions, the cost of mass customization services offered are expected to be low than the general mass production of I T products and services. The solution space will allow the integration of consumers with the production process. This implies that consumers will be able to participate in the value addition process of a given product or service through defining, configuring or modifying based on their individual preferences and in the offered set of options. Toolkits will be provided to the consumers so as to improve their performance while the IT industry configures products and services on the basis of their expected results (Peters & Saidin, 2000). How customer behaviour might influence company performance and an outline plan for managing its impact In the current globalizing economy, competition is becoming fiercer. This implies that it turns out to be more difficult for both products and service distinguish themselves from the rest of other offerings than it was before. Various products and services are facing new competitions caused by substitutes as well as from the completely new offerings of the industry outsiders (Kaplan & Haenlein, 2006). Due to the product differences which are closed at a high speed and several companies are in the battle to win customers by price reductions, a number of products and services have a tendency to become commodities. Alternatively, customer behaviors become increasingly hybrid since customers are more sensitive to prices as they often search for bargains at marketplaces. In addition, customers possess a wider choice of less distinguishable products, and thus for most of the offerings, the issues of power balance shifts towards the consumer side. This implies that are widely informed of the great powers they have that raises their expectations on the manner in which companies need to care for them (Kathrin & Christof, 2006). Development of a sustainable relationship between the customers and a company proves to be an important opportunity for competitive advantage. Such relationship is not only based features such as price and quality alone, but also on the interactions the customer makes with a company in relation to how fast, efficient, easy and reliable the management process is that can either create or break the relationship. Companies need to adapt their modes of competing for customers by focusing their efforts on customer relationship management issues such as customer satisfaction, targeted marketing that include event marketing and direct marketing. Through the implementation of customer satisfaction idea, companies should take note of the emotional bond that connects the customer so closely to a company. This develops a customer’s clear preference for the products or brands of a company as well as recommending them to others (Goodhue et al. 2002). Consumers initiate creativity in companies as well as other manufactures through the adoption of unique lifestyles which are revealed through the mass media channels. Therefore, it is from the channels that most consumers demand for the personalized and custom created products, and thus acts as co-designers for their intended products. From this perspective, it can be concluded that the consumer trend is developing at an alarming rate since consumers are becoming more cognizant and very assertive on both the quality and design of their on preferred services. This provides a clear understanding on the significance of mass customization as a force to reckon within the global commercial ground (Heikkilä, 2002). Definition of the operating system to support the service offering The operating system to support mass customization service offer embrace customized service concepts. The employees will be trained on how to identify the needs of customers as well as manage the specific business skills of individual customers. This means that customer value and customer satisfaction are the core values that employees are expected to practice. As a result, employees will be developed and serve as the business consultants for their respective customers (Frank, 2008). A description the customer management system The effectiveness of a given suggests for increased production of the customer value which ultimately contributes to high customer satisfaction. The customer management system for mass customization will basically involve acquiring some knowledge about the preferences a customer and fulfilling his or her needs. In this case, offering products and services in accordance with the customer’s preferences. In order to overcome operation dilemma and effectively achieve mass customization, enablers such as modular design of a product and the associated process, postponement as well as supply chain management and efficient information system principles will be taken into consideration (Gilmore & Pine, 1997). Since Information Technology and automation are both important part of mass customization due to the fact they constitute the relationship the consumers’ needs and the capabilities of manufactures the large success of the system used in mass customization. Therefore, information reliability on the ever changing needs of individual customer so as to adequately provide what exactly the customer may need and at the most urgent point in his or her time. This will prevent customers from switching to other alternatives offered by the competitors in time production shortages (Johansson & Olhager, 2003). Conclusion Service management, though, a necessary evil within the business world, it is a driving force in the management of business strategy.  However, it varies completely in relation to the businesses an organization runs and the industry it operates in.  A well managed service offer will be optimized to the specified client needs. Most of the companies today are forced to react to the increasing individualization of demand and the growing competitive pressure that dictates costs must continuously decrease. Majority of the implementations of mass customization are considered to be operational, such as the configurators of software-based product who possibly add or change the functionalities of their core product or to develop complete custom enclosures from scratch. Channels enable most consumers to demand for personalized and custom-created products, hence act as co-designers for their intended products. References Blecker, T., Abdelkafi, N., Kreutler, G. & Kaluza, B., (2004). Auction-based Variety Formation and Steering for Mass Customization. Electronic Markets.14(3), 232-242. Chase, R.B, Robert, J.F, Aquilano, N.J., (2006). Operations Management for Competitive Advantage (11TH Ed.). New York: McGraw-Hill/Irwin. Duray, R., Ward, P., Milligan, G & Berry, W. (2000). 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