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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
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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
selection.
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
globalization.
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
class.
A = 90 - 100%
B = 80 – 89%
C = 70 – 79%
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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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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
4
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.
Develop
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.
Plan
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.
plan.
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.
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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Georgia State University
CRN 13765
arranged. Writing often Writing and precise.
unclear. generally
clear.
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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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
class.
Chapter 7: Review Questions 1, 2, 4 and 5 on page 131. Please type your
homework.
Chapter 8: Review Questions 1, 2, 3, 4, and 5 on page 149. Please type your
homework.
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.
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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.
THE DISCIPLINE OF MARKET LEADERS
CUSTOMER VALUE MODEL
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
control)
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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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
expensive.
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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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Georgia State University
CRN 13765
The Links in the Service-Profit Chain
Operating Strategy
and Service Delivery
System
Employee Revenue
Retention Growth
Internal External
Service Employee Service Customer Customer
Quality Satisfaction Value Satisfaction Loyalty
Employee
Productivity Profitability
service >retention
concept: >repeat
>workplace results for business
design customers >referrals
>job design
>employee
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
servicing
customers
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