IJOPM

19,2
Service operations
management: return to roots
Robert Johnston
104 Wanvick Btisiness School, University of Warwick, Coventry, UK

Keywords Management theory, Operations management, Service operations

Received February 1998
Revised July 1998 Abstract Over the last 20 years we have witnessed the emergence of a large-scale, world-wide
academic movement concerned with the management of services. This paper charts the role and
impact of operations management on this movement and proposes that the current key focus for
service academics should be with the application of frameworks and techniques Also suggests that
as the service movement has grouti, with increasing overlap between tlie subjects of operations,
marketing and HRMfor example, there is a need to "return to roots". Contends that service
academics, in tlieir bid to develop cross-functional service management material, may have lost, or
inadvertently ignored, the strength of their core disciplines. Re-focusing on the traditional strengths
of operations management, such as performance quality, design, and operational improvement.
might help provide a greater rigour to the developing subject of service management. Discusses nine
areas for service operations research and suggests specific research questions. The topics include
Unking operational performance to business drivers, performance measurement and operations
improvement, service design, service technology, the design of internal networks and managing
service capacity.

Inlemational Journal nf f)peTations
& lYoduaion Management,
Vnl,19No.2,l999.pp.lM-124,
<0 MCB University Press. 0144-3577
Introduction '
"Service" captured the interest and imagination of operations management (OM)
academics in the 1980s. The service movement was driven, in part, by a
realisation that classes were filled with students who would be, or were, involved
in non-manufacturing tasks. There was some disillusion felt with the existing
operations management material, by both the students and by academics.
Economic batch quantities, line balancing and stock control are just a few of the
topics widely taught then which bore little relation to the key issues faced by
managers running service operations. That is not to say that these tools and
techniques were of no value, but customer service, service quality and service
design were centra! issues facing many service operations managers, yet there
were no tools or techniques to help them in these matters.
The need for service-based material was also timely. It matched the emerging
realisation of the importance of the customer and a more customer-oriented view
of operations. This was a significant shift away from the more internally-focused
efficiency view of operations management. It also fitted with a growing
"strategic" trend in operations. This questioned the traditional reactive role of
operations and attempted to make the subject more market-oriented by
understanding how operations could not only support but also help develop a
strategic advantage (see for example Hayes and Wheelwright, 1984; Hill, 1985,
1989; Skinner, 1974,1985).
Service operations have great appeal, and they are all around us. There is a
plethora of examples and experiences and, indeed, research data that can be
gleaned from everyday life: service operations are all-pervasive. They are Service OM:
therefore a normal part of our students' lives. They can easily relate to the return to roots
problems of scheduling hospital beds, the layout of a multiplex cinema or the
quality of a retail encounter. Although undoubtedly important, car factories,
paper mills and plastic coating lines can seem remote from many people's lives.
Furthermore, each one of us is almost constantly playing out some role or other
within a service operation. As students sit in a lecture they are playing a part in 105
a service experience, just as we are delivering, or rather orchestrating, that ^ ^ ^ ^ ^ ^ ^ ~ ^ ^
service. As they go to the library, or to eat, or to socialise, they are having
interactive service experiences. Service "factories" are everywhere; "The mall is
my factory" is the title of a reflective piece on service operations by Chase (1996).
Operations academics, just like operations practitioners, tend to be
enthusiasts. On plant tours, students experience their teacher's fascination and
insights into the processes and the systems and procedures that support them.
Student feedback lays testimony to their enthusiasm, understanding and
fascination with all things operational. Service operations are even more
compelling. The full title of Chase's paper is "The mall is my factory: reflections
of a service junkie". In it he provides some tell-tale signs of the service operations
"junkie" which might sound uncomfortably familiar to many service operations
academics:
• You ask the resort hotel manager if you could peek at the reservation
system while you are on vacation rather than spending an afternoon on
the beach.
You go out of your way to visit theme parks in Korea just to benchmark
them against Disneyland.
You are more interested in the planes and taxis you took to get to the
factory tour than you are in the factory.
• You provide unsolicited feedback to your dentist on how the scheduling
and appointments system could be improved.
I would like to add a couple more:
Your partner is reluctant to be taken to a restaurant to celebrate your
wedding anniversary in case something goes wrong.
Your children will only go with you to the theme park if you promise not
to debrief them on the way home.
This growing and compelling interest in service was happening in many parts of
the world and in different functional areas (Brown et al., 1994; Gronroos, 1994;
Johnston, 1994; Schneider, 1994), In marketing, accounting and HRM for
example, academics were waking up to their service-based students. There was
growing concern about the product-based nature of their material. Marketing
seemed preoccupied with the marketing of white goods. Accountancy academics
used examples which were based around an imaginary product, the "widget".
Ironically, this has become the accepted name for a beer can insert which forces
IJOPM gas into the beer when the can is opened, in order to provide a creamy head. (No
]^9 2 doubt the majority of OM academics will have opened up a can to have a look!)
Thus the service management movement was born in many different disciplines
by people united by a shared enthusiasm and interest for all things intangible.
From these early beginnings, a large-scale, world-wide movement gained pace
and membership. Over the last ten to 20 years this has had a profound effect on
106 research and teaching. The service operations movement, like the service
• " • " ^ ^ ^ ^ ^ ^ ^ ~ marketing movement, has been characterised by a number of stages; an initial
realisation of the difference between goods and service, the development of
conceptual frameworks and the empirical testing of these frameworks {see
Brown et al., 1994). I would contend that we are now entering a fourth stage
concerned with the application of the tools and frameworks to improve service
management. I would also contend that as the service movement has grown,
with increasing overlap between the subjects of operations, marketing and HRM
for example, this fourth stage is also characterised by a "return to roots", a
realisation that we might have lost, or inadvertently ignored, the strength of our
core disciplines and the need to bring a sense of academic rigour and depth to the
developing subject of service management.
The next sections briefly chart the development of operations through the
first three stages and lay out the challenges as we enter this fourth stage in the
development of service operations management. Several areas for future
research are discussed.

Stage one - service awakening

Before 1980, business academics were primarily concerned with the production,
marketing and management of physical goods. By 1955 the service sector
accounted for just over 50 per cent of the UK's gross domestic product,
overtaking the product-based sectors. Yet it took another 20 years before the
operations management academics of the day started to apply their knowledge
and skills to service operations. Operations management in 1970 was known as
production management (see for example Chase and Aquilano, 1973). It had
developed out of an even more focused view of operations, factory management
(see for example Lockyer, 1962). Factory management was the name given to the
search for efficiency in the post-industrial revolution era based upon Frederick
Taylor's philosophy of scientific management (1911). Production management
was concerned with applying method study techniques, production planning
and control, capacity management and materials management, for example in
production settings, with examples coming from a wider base than "pure"
manufacturing and including examples such as distribution, transportation,
hospitals, libraries and publishers (see for example Adam and Ebert, 1982;
Evans et al., 1984; Stevenson, 1982; Wild, 1980).
In the 1970s there was an emerging recognition of service operations and the
first two texts to place some emphasis on the service sector were Johnson et al.
(1972) and Buffa (1976). Both books were entitled Operations Management "to
reflect the growing emphasis on the breadth of application of production
management concepts and techniques...(in) non-manufacturing and service Service OM;
industries as well as manufacturing" (Buffa, 1976). return to roots
The authors' good intentions are not borne out by the content of their books.
Johnson et al. used the word "service" just once in chapter 1 and then reverted to
discussion of the traditional production management techniques in
manufacturing settings, with the exception of some discussion of mathematical
programming applied to distribution systems and the scheduling of service and 107
transportation systems. Buffa, likewise, recognised the existence and indeed ^^^^^^^~^~^
importance of service and dedicated two chapters to the application of queuing
theory, aggregate planning and scheduling in hospitals. One may argue that
they were simply paying lip service. I would argue that they began the
transformation of the subject.
The service movement appears to have gathered greater momentum in the
field of marketing. Johnson's dissertation (1969) was the first to ask the question
"Are goods and services really different?" (quoted in Brown et at., 1994). Judd
(1964) proposed a typology of service and Rathmell (1966) encouraged marketers
to devote more attention to the service sector. The first two service books were
written by Johnson (1964) (a monograph) and Rathmell (1974). Shostack (1977)
wrote "a landmark article" (Brown et al., 1994) "which was to alter the course of
our thinking" (Kotler quoted in Gronroos, 1990) which challenged marketers to
provide concepts, guidance, terminology and rules from the service sector.
Europeans, Keith Blois, John Bateson, Pierre Eiglier and Eric Langeard, joined
the American-led initiative with service contributions of their own (see for
example Bateson, 1977; Blois, 1974; Eiglier and Langeard, 1977).
Service operations was a little slower off the mark, as service operations
management was "essentially operations research (OR) applied to service
settings" (Chase, 1996). A major breakthrough came in 1976 with the publication
of Earl Sasser's article "Match supply and demand in service industries" in the
Harvard Business Review, followed two years later by the pioneering textbook
Management of Service Operations (Sasser et al., 1978) containing what are now
regarded as classic cases and issues. Dick Chase also wrote a service article for
the HBR "Where does the customer fit in a service operation?" (1978). He
challenged the operations management community to consider two types of
operations; the traditional back office factory and the customer-facing, customer-
contact front office. Chase and Sasser et al. provided academic credibility and
authority to the study of customer-based operations. Other papers with distinct
operations themes included "Pi'oduction-line approach to service" (Levitt, 1972),
"Quality control in a service business" (Hostage, 1975), "The new back office
focuses on customer service" (Matteis, 1979) and "Marketing's potential for
improving productivity in service industries" (Lovelock and Young, 1979).
Levitt's paper is still proving a rich source of inspiration for recent papers (see,
for example, Bowen and Youngdahl, 1998).
In essence, stage one (referred to by Brown et al. (1994) using the analogy of
the development of the human species) was the "crawling out" stage and was
characterised by recognition of the existence of service. The nature of academic
IJOPM work was primarily descriptive and focused on the difference between goods and
19,2 services (Brown et al., 1994). Chase (1996) described this as the "classification
era". Although Levitt et al. and colleagues had started the service operations
revolution, service operations was still very wedded to its factory roots.
Furthermore, whilst there was awareness of some of the efforts in other
functions (Chase, 1996), the concept of a cross-functional subject of service
108 management was some way off. Research was undertaken in subject areas with
little or no cross-fertilisation. Figure 1 summarises the characteristics of this
stage in the development of service operations management.

Stage two - breaking free from product-based roots

The period between 1980 and 1985 was a time of "high interest and enthusiasm"
in services (Brown et al., 1994). It was accepted that services were different from
goods (though that debate rumbled on (see, for example, Lockyer (1986) and
Morris and Johnston (1987)}. During this "scurrying about" period (Brown et al.,
1994), many substantive issues were debated. The work was principally
conceptual in nature and was characterised by the development of frameworks
to help understand the characteristics of service and service management (see,
for example, Bowen and Schneider. 1985; Gronroos, 1984; Parasuraman et al.,
1985). Service operations academics continued their work on "customer
operations" (for example. Chase, 1981; Maister and Lovelock. 1982). This focus
on the customer and the service encounter was growing apace in the other
functions. Publications on this topic included "The critical incident as a
technique for analysing the service encounter" (Bitner et al, 1985), "Boundary
spanning role employees and the service encounter: some guidelines for
management research" (Bowen and Schneider, 1985) and "Perceived control and
the service encounter" (Bateson, 1985).
Operations academics were also breaking ground with new perspectives on
traditional themes. Wyckoff (1984), for example, wrote what might be considered
an early TQM paper "New tools for achieving service quality". In this period the
first two service operations management texts were written (Fitzsimmons and

NATURE OPERATiONS RELATiONSHiP

OF FOCUS OF MANAGEMENT BETWEEN
STAGE RESEARCH RESEARCH OUTCOMES ISSUES FUNCTIONS

ONE descriptive goods V services growing

services are different awareness of the
imporiance of
Figure 1. service, customer
Stage one - service operations and
awakening customer contact
Sullivan, 1982; Voss et al., 1985). We also witnessed the first "challenge" papers Service OM:
on service operations research; "The service sector: challenges and imperatives return to roots
for research in operations management" (Sullivan, 1982) and "Service operations
management: research and application" (Mabbert, 1982).
The main characteristic of stage two was that the study of service appeared to
have broken free from its product-based roots. There was also recognition of, and
reference to, the research undertaken in the other disciplines undertaking service
research.
The epitome of this era was the well-regarded paper by Parasuraman et al., "A
conceptual model of service quality and its implications for future research"
(1985). This was a major step in the development of the cross-functional subject
of service management. Service quality was a topic which was seen as important
by all of the different functional areas and where they could all make a
contribution. This landmark article (and subsequent studies by the authors) not
only stimulated a huge amount of activity in the marketing area but threw down
the gauntlet to the operations area, as it was realised that other functional areas
had important things to say about a topic which had traditionally been seen as
"operations". It was also a different approach to quality, in stark conti'ast to the
statistical process control (SPC) approach. This was also the case when
Shostack's article "Designing services that deliver" (1984) was seized upon by
marketers as they moved into process mapping, previously a cornerstone of
operations management.
Interest in internally-focused service operations did not cease, however (see,
for example, Blois, 1984; Johnston and Morris, 1985).
There was also recognition of cross-functional issues in papers such as "The
employee as customer" (Berry, 1981) and in a text by Eiglier and Langeard
Servuction (1987) which combined aspects of marketing and production, though
the text is subtitled "Le marketing des services". We also witnessed the
production of what might be regarded as the first service management text
(Normann, 1984). The service management area was also gaining some degree of
respectability with the publication of two journals; The Service Industries
fournal in 1980 and the fournal of Professional Services Marketing in 1985.
For operations this was a period when the nature of service and service
operations was classified as a prelude to the development of tools and concepts.
The dimensions included customer contact time (Chase, 1981), degree of
customisation (Maister and Lovelock, 1982 and Johnston and Morris, 1985), the
amount of judgement exercised by front office staff (Lovelock, 1983), whether the
value was added in the front or back office (Maister, 1983), the operation's
product or process focus (Johnston and Morris, 1985). These discussions resulted
in the now widely-accepted categorisation of service operations; mass,
professional and service shop (see, for example, Schmenner, 1986; Silvestro et al.,
1992).
The key characteristics of stage two are summarised in Figure 2.
IJOPM
NATURE OPERATiONS RELATiONSHiP
19,2 OF FOCUS OF NAGEME BETWEEN
STAGE RESEARCH RESEARCH OUTCOMES iSSUES FUNCTiONS

ONE descriptive goods V services growing

110 are different awareness of the
importance of
service, customer
operations and
customer contact

TWO conceptual characteristics conceptuai challenge to

of service and frameworks existing
Figure 2. service operations
Stage two - breaking managerriGnt paradigms and the
deveiopment of
from product-based
"customer
roots operations"

Stage three - the service management era

The third stage in the development of the service movement, which Brown
described as the "walking erect" stage, has been characterised by the cross-
disciplinary nature of service research; a coming together of disciplines.
Marketing, operations and HRM, in particular, brought together their various
strengths and perspectives to issues of common concern. This period, from
around 1985 to 1995, was the era of service management (as distinct from service
marketing or service operations); a subject whose strength lies in its cross-
disdplinary nature and approaches. Three interdisciplinary conferences began,
the International Research Seminar, hosted by Eric Langeard and Pierre Eiglier
from the Universite Aix-Marseilles; the Quality in Services (QUIS), alternating
between Sweden and USA; and the Frontiers in Service Conference at Vanderbilt,
USA.
The research undertaken in this stage was predominantly concerned with the
empirical testing of ideas and frameworks resulting in underpinned and tested
models (see, for example, Bitner et al., 1990; Collier, 1991; Fitzgerald et al, 1991;
Parasuraman et al, 1988; Rust and Oliver, 1994). Conceptual frameworks and
ideas continued to emerge to form the basis for fresh empirical work. This period
was certainly an important milestone in the development of the subject.
Chase (1996) referred to this stage as the "theory testing/empirical era" where
we "have been moving from developing conceptual frameworks to refining
their dimensions and validating them empirically". Industry-focused studies,
survey research and case studies seem to have dominated this stage of
development.
Some of the main operations-oriented issues that were being researched are Service OM:
contained in Table I {this list is not meant to be complete or comprehensive but return to roots
simply indicative of the wide range and depth of issues being researched).
There was also a realisation that service management and service operations
in particular might be able to make some new contributions to the core
production-oriented operations management field. The benefits of a customer-
based approach, the role of service in the product mix and the development of 111
service-based strategies were all contributions that were offered to the
manufacturing community (see, for example, Booms and Bitner, 1981; Bowen et
al., 1989; Fry et al, 1994; Quinn et al, 1990). Figure 3 illustrates the points
relating to stage three.

Topic SelKrted references

Customer relationships Storbacka, 1995; Storbacka et at., 1994

Failure prevention in services
Internal services
JIT in service
Managing the customer
Performance measurement
Process control
Quality measurement
Satisfying the customer
Service capacity
Service design
Service encounter
Service environment
Service focus
Service guarantees
Service operations strategy
Service process
Service productivity
Service quality
Service recovery
Service technology
TQM in services
Yield management
Zero defections
Chase and Stewart, 1994; Kelley et al., 1993; Stauss, 1993
Gremler et al., 1994; Mattsson. 1992; Vandermerwe and
Gilbert, 1991
Duclose/fl/., 1995
Bowen, 1986; Johnston, 1989; Mills and Morris. 1986
Brignall et al., 1992; Fitzgerald et al., 1991
Haynes and DuVall, 1992
Babakus and Boiler, 1992; Cronin and Taylor, 1992.1994;
Finn and Lamb, 1991; Parasuraman et ai, 1988
Anderson and Fornell, 1994; Bitner and Hubbert, 1994;
Danaherand Mattsson, 1994; Johnston, 1995a
Armistead and Clark, 1994a; Lovelock, 1992
Behara and Chase, 1993; Fitzsimmons and Maurer, 1991;
Gouillart and Sturdivant. 1994; Katz et al., 1991; Shapiro
et al., 1992
Bitner et al., 1990; Bowen and Schneider, 1985;
Czepiel et al, 1985; Lewis and Entwistle, 1990
Bitner, 1992; Wakefield and Blodgett, 1994
Davidow and Uttal, 1989a; Kimes and Johnston, 1990;
Van Dierdonck and Brandt, 1988
Hart, 1988,1990,1995
Armistead, 1990
Collier. 1991; Johnston. 1995b; Kingman-Brundage, 1989
Armistead et al., 1988
Andersvson, 1991; Rust and Oliver, 1994; Zeithaml et ai,
1990
Armistead and Clark, 1994b; Bell and Zemke, 1987;
Edvardsson. 1992; Hart et al, 1990; Johnston, 1995c;
Kelley and Davis, 1994
Collier, 1985; Faulhaber et ai, 1986
Davidow and Uttal, 1989b; Desler and Farrow, 1990 Table I.
Kimes, 1989 Some OM research issues
Reichheld, 1996; Reichheld and Sasser, 1990 1985-1995
IJOPM Stage four - return to roots?
My belief is that we have now entered a fourth stage: one that could be
19,2 considered the final step in the creation of a "mature" subject which has been in
evidence since 1995: the intention and ability to be prescriptive (Johnston, 1996).
A stage when much (but not necessarily all) of the material can be taken and
applied, and where the outcome of its application can be predicted (see, for
112 example. Berry, 1995; Heskett et al., 1997; Rust and Oliver, 1994). Collier (1994),
for example, has been developing models to show the relationship between
perceived service quality and operational performance. Heskett et al (1997), Rust
and Oliver (1994) and Voss and Johnston (1995) have been undertaking empirical
work to understand the links between operations drivers, for example, quality,
staff satisfaction, internal quality, and outcomes such as profit and customer
satisfaction. It is this type of work that seems set to continue for some years to
come.
However, a new significant wind of change is that the previous trend towards
cross-functional work seems in reverse. I believe we are witnessing some
tensions between the functions. Indeed I would venture to suggest that rather
than seeing a continuance of the overlapping of the areas of marketing,

NATURE OPERATIONS RELATIONSHIP

OF FOCUS OF MANAGEMENT BETWEEN
STAGE RESEARCH RESEARCH OUTCOMES ISSUES FUNCTIONS

ONE descriptive goods V services growing

services are different awareness of the
importance of
service, customer
operations and
customer contact

TWO conceptual characteristics conceptual challenge to

of service and frameworks existing
service operations
management paradigms and the
development of
"customer
operations"

THREE empirical development large amount development of

and testing of of service sen/ice processes,
frameworks material based quality, failure,
on new cross- design and
functionally technology with a
derived view that service
Figure 3. models could contribute
Stage three - the service to manufacturing
management era
operations and HRM for example, we are witnessing their moving apart from Service OM:
each other. This change is driven by a basic desire to re-establish the service return to roots
material within the core disciplines. It appears that we have forgotten, or mislaid,
our established roots and academics have focused on material and approaches
depicted in the circles in the last column of Figure 4. We seem to have been swept
along on the tide of interest in service focused predominantly from a customer
perspective. Whilst there is nothing unhealthy, or indeed inappropriate, in this, 113
we seem to have ignored the strength that our core discipline has to offer. In
service quality, for example, we have focused on customer-based notions of
service quality but appear to have ignored quality of conformance and the
delivery of customer-based quality, surely key issues for operations managers

NATURE OPERATIONS RELATIONSHIP

OF FOCUS OF fWlANAGEMENT BETWEEN
STAGE RESEARCH RESEARCH OUTCOMES ISSUES FUNCTIONS

ONE descriptive goods V services growing

services are different awareness of tfie
importance of
service, customer
operations and
customer contact

TWO conceptual characteristics conceptuai challenge to

of service and frameworks existing
service operations
management paradigms and the
development of
"customer
operations"

THREE empirical development large amount development of

and testing of of service service processes,
frameworks material based quality, failure,
on new cross- design and
functionally technology with a
derived view ttiat sen/ice
models could contribute
to manufacturing

FOUR applied prescription linking the retum to roots

operations - the need to re-
drivers to focus service
outcomes operations
towards
traditional Figure 4.
operational issues Stage four - return to
and approaches roots?
IJOPM and academics. In service design, we seem to have followed the blueprinting
movement but we appear to have ignored the process of design in favour of this
descriptive activity and the relationship between important, and often ignored,
back-office activities in favour of customer-facing processes.

A service operations management agenda

This growing awareness of the need to re-operationalise service management
material has led to an attempt to develop an agenda[l]. This section identifies
some possible research issues and questions emphasising the core operational
issues. I

1. Linking operational performance to business drivers

Developing the work of Voss and Johnston (1995), Roth et al. (1997) and the
pioneering work on the service profit chain by Heskett et al. (1997), there is
growing awareness of the importance of linking business drivers such as
leadership, customer orientation and more operational issues such as
benchmarking, quality control and service design, with their impact on business
performance. Although the work cited above has made significant inroads into
this area, there is much more work to do. Indeed there is significant practitioner
interest in this area, witnessed by the growing interest in the use of the Baldrige
criteria and the UK/European Foundation for Quality Awards on this side of the
Atlantic. Chase points out the important roles that operations can play in this
movement: "service operations is the appropriate discipline to begin to move
business from its current emphasis on reengineering to the next step - revenue
enhancement" (Chase, 1996). Two key research questions are:
(1) What are the most efficient operational profit levers and under what
circumstances?
(2) Can we map the relationships between the controllable and the outcome
variables? ,

2. Performance measurement and operations improvement

Despite some major work in the performance measurement area (Fitzgerald et
al., 1991; Kaplan and Norton, 1996; Lynch and Cross, 1991), many organisations
seem reluctant to critically review and develop their performance measurement
systems. The balanced scorecard, although a major step forward for many
organisations, has led to a degree of complacency once an organisation, and its
SBUs, have found measures to fit all four boxes. (One organisation was pleased
to have developed new measures including "number of staff training days" and
"number of processes benchmarked" without any concern as to whether any
improvements resulted from these activities.):
How can we develop frameworks to help organisations review the nature
and effect of the performance measures used?
 • In what situations are historical measures and targets appropriate and in Service OM:
what situations are externally based targets more appropriate? return to roots
• Do radical step change improvement programmes yield better or faster
results than TQM type continuous change programmes?
• Does benchmarking yield the desired results or does it get caught up in
interminable and unfruitful discussions about "apples and pears" or 115
degenerate into "industrial tourism"?

3. Guarantees, complaints and service recovery ~ took for performance

improvement
I believe that much organisational practice in the area of complaints and
recovery has regressed into mere marketing ploys. Complaints procedures in
some organisations have become mechanisms to pass on tokens or small pay-
outs to disgruntled customers. Guarantees often seem little more than your
statutory rights, or an "opportunity" to purchase insurance so that, if the
product or service fails, the vendor is not troubled with the problem (and so is
unaware of the in-built problems of their products or services). Service recovery
appears to have become reactive, with staff carefully listening to, sympathising
with, and then paying off the customer but never sorting out the root problem.
(At a recent visit to a hotel. I informed the manager about a whole series of
problems I had encountered during a ten-hour stay. Without making notes of any
of them, she kindly offered me another breakfast free of charge.);
• How can we link complaints and failures to organisational improvement?
How can organisational learning develop from mistakes?
• How can organisations be proactive in finding and dealing with mistakes
before their customers tell them (or more often don't tell them)?
• What are good service guarantees and how can they be operationalised?
What evidence is there that complaints, guarantees or service recovery
drive in:iprovements within an organisation?
How is learning best captured and applied?

4. People, management
Despite some excellent additions to the literature in the HRM area (such as Berry,
1995; Schneider and Bowen, 1995), operations academics need to retrace their
roots and focus on the design of jobs. The problem is not knowing that
customers expect empathy, reliability, assurance etc., but delivering it time after
time, month after month, week after week, day after day, hour after hour. (A
recent BBC documentary portrays a heterosexual male prostitute in Australia
providing service to his clients, hour after hour, sometimes for a week at a time.)
We need to understand how all employees can deliver constant and consistent
high levels of service and how we can design jobs and motivate employees to do
this:
IJOPM • What are the key service operational competencies?
19,2 • How do we develop those competencies?
How do operations managers go about maintaining the energy and
commitment of front-line workers? , ^
How does one ensure that a constant level of service is provided?
116 ,
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ 5. Sendee design ' '
The service design models used in the literature are strongly based upon product
design processes, yet there is some evidence that product design processes are
not used, or indeed applicable, in service situations (Shulver and Slack, 1997). Do
we understand how services are designed from conception to consumption and
how existing product-based models can be applied?:
• What is a service design?
• How is a service concept developed into a service?
What is a service concept?
What are the most effective methods of developing a service?
• What are good design tools and techniques?
• Seamless service is a great idea for a customer but how does one achieve
this in most "silo-based" organisations?
How can the World Wide Web be utilised to create new services, even
virtual services and the use of virtual reality simulations in service (no, I
don't have the prostitute in mind)?
How do we capture the technological dimensions of the next century?

6. Service technology '

There are a few documented examples of technological disasters, yet there are
many more but less well-known, or documented, examples of technological
successes. One reason for failure is that technology is often superimposed on
inefficient, outdated operational systems, in the expectation that it will overcome
inherent problems (Lewis and Chambers, 1997). Unfortunately there is only
limited material in the service literature about the difficulties of implementing
new technology, or indeed any categorisation of the various types of
technologies in use. It would also appear that managers seem to have a difficulty
in assessing the "true" impact of new technology (Lewis and Chambers, 1997).
Furthermore, investment in service technology does not appear to have
significantly reduced costs for the provision of services. Brunsdon and Walley
(1997) refer to this as the "productivity paradox":
What are the categories of service technologies and their relative impact?
What are the inherent difficulties in implementing new technology?
• What are the success factors?
 • What is the relationship between investment in technology and cost Service OM'
'^^"^^^^"- return to roots
7. The design of internal networks
Gremler et al. (1994) define internal service encounters as the didactic
interrelation between an internal customer and an internal service provider. The
supply chain literature, however, has moved away from such simplistic 117
relationships to the idea of networks of relationships (see, for example, Harland, - ^ ^ ^ — ^ ^ ^ — —
1996). This network approach needs to underpin future research in the internal
customer chain. Can notions of external quality and customer satisfaction be
used with internal supply chains? Slack et al. (1995) stated that internal
customers cannot be treated in exactly the same way as external customers.
External customers usually, though not always, operate in a free market. The
internal customer is often a captive customer and so many of the current
concepts of service quality and performance measurement from an external
customer perspective (e.g. customer satisfaction) have found little credence in
internal customer-supplier relationships. This seems to be changing as
organisations are looking increasingly at contracting-out internal services:
• Can supply chain networks be implemented within organisations?
• How well does service quality translate to internal supply networks?
• What is the relationship between internal service quality and staff
satisfaction and external quality and customer satisfaction?
• How can organisations cost and value internal services?

8. The service encounter

The service encounter is the crux of service delivery, yet how much do we know
about which are the right scripts, attitudes, behaviours to achieve the desired
effect? How do we ensure that each encounter in a service process has the right
cumulative effect on customers' overall perceived service quality?:
• What are the "right" scripts for different types of service?
Do we know how to design and control the series of encounters that
comprise the service process?

9. Managing service capacity

Some work exists in the management of service capacity in terms of staff
scheduling (see, for example, Goodale and Tune, 1998; Thompson, 1996).
Strategies for managing demand and supply in service operations have also
been documented; however, there has been little advancement since the first
paper by Sasser in 1976. Yet this is an area which is fundamental to the planning
and control of service. Another issue, the subject of a preliminary investigation,
is the relationship between capacity levels and the level of service quality
delivered. Clark and James (1997) provide some conceptual models of intuitively-
derived relationships between resource utilisation and service quality. Is it now
IJOPM possible to derive empirically these functions and assess strategies for effective
192 • resource utilisation linked to required quality levels?:
• What are appropriate capacity strategies? How does customer contact
relate to types of strategies?
• What is the relationship of capacity levels and capacity strategies to the
118 level of service quality delivered, for example?
^^^^^^""^^^ • How can organisations best manage their quality-capacity relationships?

Conclusion
My view is that in stage four we are seeing a return to roots, which is no bad
thing. This will add new depth and grounding to the literature on service
management. In operations it will allow us and encourage us to undertake
research and make strong statements about things which we understand
(quality, design and improvement, for example). But somehow we need to add
this depth and focus without losing the richness that has developed as different
functional areas have come together to share areas of common interest. I think
that holding these areas together will be a greater challenge to service academics
over the next few years than the research agendas to which we are compellingly
and enthusiastically drawn.

Note
1. This agenda is partly based upon discussions with Dick Chase, Peter Docherty,
Christopher Easingwood, Ulf Karlsson, Jos Lemmink, Jan Mattsson, David Tansik and
Chris Voss at the Service Operations Research Workshop, Chalmers University,
Gothenburg, 19-21 September 1997.

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