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									Service Operations Management                                                   Spring, 2008
Georgia State University
CRN 13765

                           MGS 4770
                 Service Operations Management
                                      Spring, 2008

Instructor: Walter L. Wallace, Instructor,
            Department of Managerial Sciences
            Robinson College of Business,
            35 Broad Street, 10th Floor, Suite1006
            Atlanta, GA 30303-3083
            MGS. Dept.: 404 413-7525
            Office:     404 413-7553
            E-mail:      wlwallace@gsu.edu
            uLearn: Class Slides

Class:       Location: GCB 331
             CRN 13765
             Prerequisites: MGS 3400
             Class Hours: Tuesday 4:30pm-7:00pm
             Credit Hours: 3.0

Text:        Successful Service Operations Management: (2nd edition); Richard Metters,
             Kathryn King-Metters, Madeleine Pullman, Steve Walton, Thomson/ South-Western.

CTW Designation:
             This course is a designated Critical Thinking through Writing (CTW) course. It is
             designed as the senior-level “second” course for students majoring in Managerial
             Sciences with a concentration in Human Resource Management. Students
             matriculating to Georgia State on or after Fall Semester 2009 must satisfy the CTW
             requirements as set out in the Undergraduate Catalog.

Logistics:   All classes are in 331 General Classroom Building, Tuesday from 4:30pm to 7:00pm.
             My office hours are very flexible. I am in my office Tuesdays, during late afternoon
             business hours, up until 4:00pm. Please call my office to schedule an appointment at a
             mutually convenient time. If I am not in the office, please don’t hesitate to leave a
             voicemail message. I check my voice email regularly.

Course Description:
           This course is an introduction to the concepts, principles, problems, and practices of
           successful service operations management. Emphasis is focused on preparing
           students to identify and apply appropriate management processes to ensure efficient,
           effective, and quality oriented service operations, while achieving operational
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Service Operations Management                                                    Spring, 2008
Georgia State University
CRN 13765
             excellence. Topics covered include: the role of services in the economy, strategic
             positioning and internet strategies, environmental strategies, new service
             development process, managing service expectations, front-office & back-office
             interface, service quality, yield management, waiting time management, and site

Student Learning Outcomes (SLO’s):
   1. To obtain an overview of the successful Service Operations Management (SOM)
      function through the introduction of the topics traditionally associated with the
      study of Service Operations Management. (Reference Course Description)
          a. Formulating Strategy
          b. Implementing Strategy: Designing the Service Delivery System
          c. Managing Capacity: Matching Supply & Demand
          d. Operating the System
   2. To develop an understanding of the terminology and responsibilities that relate to
      Service Operations Management.
   3. To formulate and describe the function of the Service Operations Management
      discipline in various sectors of the economy through case study.
   4. To obtain a set of basic tools and skills used in solving problems traditionally
      associated with operating the service operations system.
   5. To explore the interface of Service Operations Management with the other
      management functions, such as marketing, procurement & sourcing, outsourced
      good & services and customers.
   6. Deploy technology in the improvement of service, customer relationships and
   7. Ability to organize, develop and advance a service operation business plan vision using
      critical thinking through writing at a business level, as opposed to an academic level.
      (Reference Pages 4 and 5 for additional information on this SLO.)

Grading:     The criteria for assessing learning outcomes for the student will be homework sets
              which all students will be responsible for participating in-class. The homework
             assignments will focus on reinforcing the SLO’s 1-5. The three tests will further
             reinforce the SLO’s 1-5. The take home final will reinforce all seven SLO’s.
             Homework Assignments (10 Sets) & Attendance*………………….......20%
             Test 1……………………….…….……………………………………...20%
             Test 2………………………………….....................................................20%
             Test 3………………………………….....................................................20%
             Take Home Final Exam..…...………………………………………..…..20%

             There will be no other credit beyond these five components of your grade.
             Historically, those students that come to class regularly, do the best on their
             homework and tests. We will have homework assignments and discuss them in
             A = 90 - 100%
             B = 80 – 89%
             C = 70 – 79%
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Service Operations Management                                                     Spring, 2008
Georgia State University
CRN 13765
             D = 60 – 69%
             F = Below 60%

             *Attendance will be worth 5% of your total grade. Full attendance means being on
             time for class and actively participating in the classroom experience. Please do not
             plan on leaving early and expect to be credited with the full 5% for attendance.

Grading/ Testing Approach:
           All tests will be closed book, notes, and lecture slides. There will be no trick
           questions or surprises on the tests/exam. For a clear understanding of the material,
           you must read the assigned chapter readings and prepare the assigned homework. The
           Final Exam will be a take home paper and due back by Tuesday, May 1st at 12:00
           noon. Please, no exceptions!

Homework Assignments:
         See Assignments on Page 4 of Syllabus

Syllabus: CRN 14100

 Date             Text Section                Topics and Assignments
Jan 9th              Chap 1              Review Syllabus & Discuss Service Operations
                                         Management Models and Discuss Chapter 1
Jan 16th             Chap 2, 3, & 4      Discuss Chapter 2, 3, & 4
Jan 23rd                                 Test 1: Chapters 1- 4
Jan 30th             Chap 5              Discuss Chapter 5
Feb 6th              Chap 6              Discuss Chapter 6
Feb 13th             Chap 7              Discuss Chapter 7
Feb 20th             Chap 8              Discuss Chapter 8
Feb 27th                                Test 2: Chapters 5-8
Mar 6th                                 SPRING BREAK WEEK (No classes)
Mar 13th             Chap 10             Discuss Chapter 10
Mar 20th             Chap 11             Discuss Chapter 11
Mar 27th             Chap 12             Discuss Chapter 12
Apr 3rd              Chap 14             Discuss Chapter 14
Apr 10th                                 Test 3: Chapters 10, 11, 12, & 14 and article 1.
Apr 17th             Chap 16            Discuss Chapter 16
Apr 24th                                Open Class
Apr 22nd                    Take Home Final due by Tuesday @ 12:00 Noon

Additional Readings: (See ULearn for articles)
  1. Putting the Service-Profit Chain to Work

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Service Operations Management                                                        Spring, 2008
Georgia State University
CRN 13765
        James L. Heskett, Thomas O. Jones, Gary W. Loveman, W. Earl Sasser, Jr., and Leonard
        A.Schlesinger Harvard Business Review: Mar/Apr 1994. Vol. 72, Iss.2; p. 164 (11 pages)

    2. The Profitable Art of Service Recovery (Optional)
       Christopher W. L. Hart, James L. Heskett, and W. Earl Sasser, Jr. Harvard Business
       Review: Jul/Aug 1990. Vol. 68, Iss.4; p. 148 (9 pages)
Rubric for Critical Thinking through Writing Final Exam
 Criteria        Absent of         Not Yet      Competent             Sophisticated           Score
                Appropriate      Competent      Relative to              Level of
               Facts & Detail    Regarding        Relevant            Relevant Facts
                 in Several    Relevant Facts     Facts &              and Details
                Major Topics      & Details        Details
                        1                  2                 3
  Identify           Fails to                                            Identifies all
                                    Fails to identify Identifies most
  Relevant         distinguish                                        relevant facts in
                                     most relevant relevant facts
Facts for the    relevant from                                              all ten
                                      facts in the        in the
 Strategic       trivial facts in                                      components of
                                       Executive        Executive
  Service        the Executive                                          the Business
                                       Summary.         Summary.
   Vision           Summary                                                 Plan.
  Relevant                                     Specifies most
Issues within                                  of the relevant Specifies all of
                 Does not     Hints at some of
    Each                                         issues, but   the 10 relevant
              develop the key   the relevant
 Component                                         has not       issues and
                  issues.          issues.
    of the                                       developed     develops each.
  Business                                          each.
   Discuss                                                  Discusses all
 Underlying      Ignores or                                    relevant
Principles of   inaccurately                                 components
a Successful discusses all or   Superficially  Discusses   germane to the
   Service        almost all  discusses most most relevant business plan.
  Operation        relevant       relevant    components    Fully explains
               components       components    germane to what is required
              germane to the relevant to the the business      of each
              development of business plan.       plan.     component to
               the business                                ensure success.

   Draw                                            Most
                 Conclusions                                          All or nearly all
Reasonable                     Few conclusions conclusions
                   based on                                             conclusions
Conclusions                      supported by  supported by
                misconceptions                                         supported by
                                good business     viable
                   of major                                           sound business
                                  practices.     business
                 components.                                             practices.
 Clarity and     Writing              Few ideas          Most ideas    Ideas logically
Organization incoherent and            logically          logically      arranged.
             ideas illogically        arranged.          arranged.      Writing clear

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Service Operations Management                                                        Spring, 2008
Georgia State University
CRN 13765
                   arranged.       Writing often          Writing     and precise.
                                    unclear.             generally

                        Critical Thinking through Writing
                                 Final Exam Paper
                                    MGS 4770
You are developing a strategic service vision to take to your primary bank in order to obtain a

proposed $1million loan to begin a new sole proprietorship business in the third quarter of 2008.

You are writing your own business plan based on what you have learned in MGS 4770, Service

Operations Management, as well as, other business core courses. The major components of your

plan are spelled out at ULearn. You have been told that the plan should be comprehensive, typed

for submission to the bank and should be a full twelve pages minimum (double spaced, 12 font,

with cover page) to ensure all topics are covered adequately. Each page should be numbered. The

business plan is due on or before Tuesday, April 22, 2008 by 12:00 Noon (no electronic copies

accepted…hand delivered to my office). You understand that the bank will not accept the write-

up if it is not submitted on time. Business Plans must deal with specifics and not be concerned

with the description of basic terms. No definitions or explanation of the strategic service vision

terms are necessary. The bank management understands what you are trying to do. Deal with

specifics regarding the details of your plan! You should identify each major topic in your paper

as reflected in the outline provided for the paper. Your executive summary will be two pages of the

twelve pages and will be due initially on Tuesday, February 12, 2008.

The intent of this paper is to demonstrate your ability to organize, develop and advance a service

operation business plan vision using critical thinking through writing at a functional business level,

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Service Operations Management                                                    Spring, 2008
Georgia State University
CRN 13765
as opposed to an academic level. You will be satisfying Student Learning Outcome #7, as stated on

page 2 of this syllabus. You will be asked to share the development of your work, periodically

during the course of the semester to ensure the advancement of the vision and the sophistication of

the content of the paper. One important aspect is that of being able to communicate upward.

                                    MGS 4770
                                Homework Assignments
Chapter 1:                      None

Chapter 2:                      PC Repair: Develop a business strategy (p. 30), as well as, state
                                the Target Market, Service Concept and discuss the Service
                                Delivery System. Include “Capacity Strategies” that will support
                                the service delivery system. Download the outline provided
                                under “Assignments” at WebCT Vista for Chapter 2. Limit to 3
                                to 4 pages. This homework represents one of your key assignments
                                for the course. Please type your homework.

Chapter 3 & 4:                  None

Chapter 5:                      Review Questions 1, 3 and 5 on pages 92/93. Please type your
                                homework. Develop a Service Blueprint for a service firm you are
                                familiar with. Be comprehensive in its development. (Ref. Fig. 5.3)

Chapter 6:                      Review Question 3 on page 112 (Use all six elements of
                                “Context”). Using Figure 6.3 develop a Clue Design Form for
                                your Blueprint Service firm developed in Chapter 5. (Work in
                                excel and prepare the experiential blueprint.) Email this
                                assignment to me at wlwallace@gsu.edu . Hand in RQ #3 in

Chapter 7:                      Review Questions 1, 2, 4 and 5 on page 131. Please type your

Chapter 8:                      Review Questions 1, 2, 3, 4, and 5 on page 149. Please type your

Chapter 10:                     Review Questions 1, 3, 4, and 5 on page 205. Read “Putting the
                                Service-Profit Chain to Work” and be able to test on its content
                                for Test 3. Reference page 8 of this syllabus.

Chapter 11:                     Review Questions 1, 2, 3, and 6 on page 229. Please type your
                                homework. Review Handout “Operations Development”.

Chapter 12:                     Review Question 1 on page 252.
                                               6 of 10
Service Operations Management                                                     Spring, 2008
Georgia State University
CRN 13765
                                Problems 12.1, 12.4, and 12.7 on pages 252/253.

Chapter 14:                     Review Questions 1 and 3 on page 290. Please type your
                                homework. Problems 14.1, 14.2, 14.3, and 14.4.

Chapter 16:                     Review Questions 1, 2 and 5 on page 344. Please type your
                                homework. Problems 16.1 and 16.6.

      Value Discipline:
                                 There are three desirable ways in which an organization offers a
                                 differentiated strategy for delivering economic value:

                                             Operational Excellence
                                                     Middle of the market products or services at
                                                     the best price with the least inconvenience of
                                                     doing business. Low price/ hassle-free service.
                                                     Operational efficiencies are critical. (Cost
                                             Product Leadership
                                                     Offer the best products and services
                                                     available. Product leaders continue
                                                     to innovate year after year, product
                                                     cycle after product cycle. A mastery
                                                     of absolute advantage; the ability to
                                                     produce a good/service using fewer
                                                     resources than other producers use.
                                                     Continually striving for an absolute
                                                     advantage over the competition.
                                             Customer Intimacy
                                                     Customer-intimate organizations do
                                                     not pursue one-time transactions;
                                                     they cultivate enterprise relationships
                                                     through a collaborative approach.
                                                             - Identify and understand
                                                                 their customers’ issues
                                                             - Generate options/alternatives
                                                             - Select a solution where both
                                                                 parties are winners.
                                                     They specialize in satisfying unique
                                                     interest. Intimate knowledge of the
                                                     customer is required. They offer the
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Service Operations Management                                                           Spring, 2008
Georgia State University
CRN 13765
                                                         best solution for the customer and
                                                         support needed to achieve optimum
                                                         results and/or value by their product
                                                         and service offering.

Michael Porter has argued persuasively that three generic competitive strategies exist:
Overall Cost Leadership-an overall costs leadership strategy requires efficient-scale facilities,
tight cost and overhead control, standardized customer offerings, reduced network costs and an
low-cost operational model. (Similar to Operational Excellence)
Differentiation-the essence of the differentiation strategy lies in creating products and services that
are perceived as being unique. The primary thrust lies in creating customer loyalty.(Product Leadership)
Focus-the focus strategy is built around the idea of serving a particular target market very well by
addressing the customers’ specific needs. (Customer Intimacy)

        Value Proposition:
                                  Implicit promise made to a customer to deliver a particular
                                  combination of core benefits consisting
                                  of the following:
                                             Price
                                             Quality
                                             Performance
                                             Convenience
                                             Value analysis*
                                             Delivery options
                                             Process mapping
                                             Pro forma savings
                                             Market intelligence
                                             Paperwork accuracy
                                             Electronic interchange
                                             Ease of doing business
                                             Inventory management
                                             Flexible payment terms
                                             Business process reengineering**

           Based on the customer’s needs and interest, a core benefit package is developed for a
           particular customer or group of similar customers. This becomes their individual value
           proposition, by which the organization goes to market with these customers.

        * A method for comprehensively analyzing the cost of each manufacturing step to identify
          the steps that have a critical effect on cost and to figure out how to make them less

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Service Operations Management                                                      Spring, 2008
Georgia State University
CRN 13765
     **The fundamental rethinking and radical redesign of business processes to achieve
       dramatic improvements in strategically important measures of performance, such as
       quality, speed, dependability, flexibility, and cost.

      Value Delivery System:
                                The value discipline (primary operating model) is the basis for
                                determining the structure of the value delivery system. The value
                                delivery system is the collective integration of all operating
                                resources, capabilities and processes, logistical systems, service-
                                delivery systems, management systems, business structure, ethics
                                & culture, supplier partnerships and customer alliances that give an
                                organization the capacity to deliver its committed obligations
                                (value proposition) to each and every customer that fits the
                                organization’s value discipline. The value delivery system is an
                                integral part of the value discipline. The value delivery system
                                must be in alignment at all levels of the organization…operations,
                                finance, marketing, procurement, credit, accounting, sales and
                                service…at all levels of management.

                                Without an integrated and comprehensive value delivery system,
                                the value discipline will not work and commitments to key
                                customers cannot be consistently executed. The value delivery
                                system should embrace key performance objectives… quality,
                                speed, dependability, flexibility and cost as primary design
                                criteria. Efficiency, effectiveness and productivity are all critical
                                outputs in the development of the processes/systems embodied in
                                the value delivery system.

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Service Operations Management                                         Spring, 2008
Georgia State University
CRN 13765

    The Links in the Service-Profit Chain

                          Operating Strategy
                          and Service Delivery

                                                   Employee                                                       Revenue
                                                   Retention                                                      Growth
              Internal                                             External
              Service               Employee                       Service            Customer       Customer
              Quality              Satisfaction                     Value            Satisfaction     Loyalty

                                                  Productivity                                                   Profitability

                                                                 service                            >retention
                                                                 concept:                           >repeat
            >workplace                                           results for                        business
            design                                               customers                          >referrals

            >job design
            selection &                                                              service
            development                                          value               designed and
            >workkplace                                          elements:           delivered to
            training                                             technical,          meet
            >employee                                            economic,           targeted
            rewards and                                          service and         customers'
            recognition                                          social              needs
            >tools and
            systems for

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