Service operations strategies

Published on December 6, 2012 Reviewed on April 30, 2024   46 min

A selection of talks on Management, Leadership & Organisation

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Welcome to Service Operations Strategies. I'm your narrator Rich Metters from the Mays Business School, Texas A&M University.
So, you might ask yourself, why do we have a separate session just on service operations? There are two main reasons for this. First of all, service firms and the service portion of manufacturing firms dominate the economies of all Western countries. In fact, worldwide, the World Bank says that the service sector is larger than the manufacturing sector in every country in the globe, including some manufacturing giants like China, but that's not enough. The second reason is also very important that the tools that are appropriate for manufacturing firms are often not transferable into a service environment. A service environment is special enough that it requires its own strategies.
Let's be specific about what type of strategy we're talking about. We're talking about operations strategy, not general strategy. We're not going to be talking here about the five forces of order instead, let's figure out what operations is. The traditional definition is the transformation process. That is you have inputs on one side, outputs on the other, and what operations is, is the act of combining all of those inputs, the people you have, the technology, the raw materials, into the outputs on the other side, into the services. In terms of who is in the operations function, it turned out to be the vast majority of people in a firm. It takes very few people to actually run the marketing department. Very few people to figure out where to put the money from the firm in the treasury department, but in the operations department, you're typically talking about 80% or more of the firm involved in that area.