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ISM 270

ISM 270. Service Engineering and Management. ISM 270: Service Engineering and Management. Focus on Operations Decisions in the Service Industry Open to students with an undergraduate engineering/science degree Learn analytical tools and software for decision making

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ISM 270

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  1. ISM 270 Service Engineering and Management

  2. ISM 270: Service Engineering and Management • Focus on Operations Decisions in the Service Industry • Open to students with an undergraduate engineering/science degree • Learn analytical tools and software for decision making • Featuring guest lectures from industry practitioners • Text: Fitzsimmons & Fitzsimmons ‘Service Management’ Operations, Strategy, Information Technology

  3. Topics covered • The nature of service enterprises • Strategy for new service development Technology in services • Quality in service encounters • Forecasting demand • Managing service capacity • Supply chains in services • Globalization and outsourcing

  4. ISM 270: Details • 6 – 9pm, Tuesday evenings • January 9 – March 13 (Winter) 2007 • UCSC Silicon Valley Center • Instructor: Kevin Ross • kross@soe.ucsc.edu • Teaching Assistant: Geoff Ryder • gryder@gmail.com

  5. Who is here? • My background • Brief introductions, student survey

  6. Logistics • Class website • Readings • Text book • Office hours • 5-6pm before class, or by appointment

  7. Class Plan • Allotted class time = 3 hours • Average adult attention span = 20 minutes • … • Lecture / visitor / lab / split

  8. Computer issues • Who has a laptop? • Web access • Finding research papers • Excel, solver, …

  9. Please… • Bring: • Paper, pen, laptop, … • Opinions • Questions • Interesting articles, stories, anecdotes • Provide feedback!!! • Make every effort to keep up with readings etc.

  10. Schedule

  11. Schedule

  12. Schedule

  13. Assessment

  14. Text Chapter 1:Role of Services in an Economy Service Management Professor James Fitzsimmons University of Texas at Austin

  15. Chapter 1 Learning Objectives • Describe the central role of services in an economy. • Discuss the evolution of an economy from an agrarian society to a service society. • Describe the features of preindustrial, industrial, and postindustrial societies. • Describe the features of the new service economy

  16. Definitions • What are services? • Service enterprises?

  17. Service Definitions Services are deeds, processes, and performances. Valarie Zeithaml & Mary Jo Bitner A service is a time-perishable, intangible experience performed for a customer acting in the role of a co-producer. James Fitzsimmons

  18. Definition of Service Firms Service enterprises are organizations that facilitate the production and distribution of goods, support other firms in meeting their goals, and add value to our personal lives. James Fitzsimmons

  19. Role of Services in an Economy

  20. Percent Service Employment for Selected Nations Country 1980 1987 1993 2000 United States 67.1 71.0 74.3 74.2 Canada 67.2 70.8 74.8 74.1 Israel 63.3 66.0 68.0 73.9 Japan 54.5 58.8 59.9 72.7 France 56.9 63.6 66.4 70.8 Italy 48.7 57.7 60.2 62.8 Brazil 46.2 50.0 51.9 56.5 China 13.1 17.8 21.2 40.6

  21. Trends in U.S. Employment by Sector

  22. Stages of Economic Development Pre- Use of Standard dominant human Unit of of living Society Game activity labor social life measure Structure Technology Pre- Industrial Industrial Post- Industrial

  23. Stages of Economic Development Pre- Use of Standard dominant human Unit of of living Society Game activity labor social life measure Structure Technology Pre- Against Agriculture Raw Extended Sub- Routine Simple hand Industrial Nature Mining muscle household sistence Traditional tools power Authoritative Industrial Against Goods Machine Individual Quantity Bureaucratic Machines fabricated production tending of goods Hierarchical nature Post- Among Services Artistic Community Quality of Inter- Information industrial Persons Creative life in terms dependent Intellectual of health, Global education, recreation

  24. The New Experience Economy

  25. The Four Realms of an Experience

  26. Experience Design Principles • Theme the Experience (Forum shops) • Harmonize Impressions with Positive Cues(O’Hare airport parking garage) • Eliminate Negative Cues(Cinemark talking trash containers) • Mix in Memorabilia (Hard Rock T-shirts) • Engage all Five Senses (Mist in Rainforest)

  27. Source of Service Sector Growth • InnovationPush theory (e.g. Post-it) • Product looking for a problem • Pull theory (e.g. Cash Management) • Need drives innovation • Services derived from products (Video Rental)Information driven servicesDifficulty of testing service prototypes • Social TrendsAging of the populationTwo-income familiesGrowth in number of single peopleHome as sanctuary

  28. Discussion Topics • Describe the work that you do from a service perspective • Illustrate how the type of work you do influences a person’s lifestyle.

  29. Quiz Question • Name the top 10 USA companies by revenue in 2006 • How many would you describe as service companies?

  30. Example Service Innovation: Disney World • Link

  31. Data Envelopment Analysis (DEA) • Method for evaluating efficiency of similar venues/products • Incorporates inputs and outputs – not just one dimensional • Uses LINEAR PROGRAMMING (LP)

  32. Sample LP: Product Mix Problem • How much beer and ale to produce from three scarce resources: • 480 pounds of corn • 160 ounces of hops • 1190 pounds of malt • A barrel of ale consumes 5 pounds of corn, 4 ounces of hops, 35 pounds of malt • A barrel of beer consumes 15 pounds of corn, 4 ounces of hops and 20 pounds of malt • Profits are $13 per barrel of ale, $23 for beer

  33. Key terms of LP • Variables • Parameters • Objective function • Constraints

  34. DEA summary of terms • Define variables • E_k = efficiency of unit k • u_j= coefficient for output j (relative decrease in efficiency per unit reduction of output value) • v_i = coefficient for input i (relative increase in efficiency per unit decrease of input value) • O_jk = observed ouput j units generated by service unit k during one time period • I_ik = no. units input used by service unit k during one period • Note: • k=1..K = service unit counter • j=1..M = output counter • i=1..N = input counter

  35. DEA Objective and constraints Evaluating unit e Trick = Rescaling to get linear equations

  36. Example from Text: Burger Palace • Small, artificial example for illustration! • Page 68 • Excel formulation

  37. Service Portal: Strikeiron • Link to website

  38. Homework: Week 1 • Link

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