Process Management 7th P

Process management assures service availability and consistent quality Without sound process management, balancing service demand and supply would be extremely difficult Operations management is the interactive experience that would deliver the service benefits

Issues in Process Management

Area of operation Process Planning and Control Operations Planning Facilities Design Scheduling Explanation Operation specification to achieve service output in terms of quantity, quality, delivery and cost Detailed specification of each sub system Design, layout, location, material handling and maintenance Detailing the timing at which service operation should be completed

Issues in Process Management

Area of operation Inventory Planning and Control Explanation Planning and controlling the inventory of people and capacity

Quality Control Operations Control

Maintaining quality standards Information flows and insuring that operations are undertaken as per schedule
Anticipating demands and forecasting capabilities that need to be inducted

Forecasting and Long-term Planning

Standardization vs. Customization

According to Shostack, any service process is a combination of both complexity and divergence Complexity of process steps & sequences that constitute the process Divergence Degree of freedom or variability allowed in a process sequence

Standardization High Complexity + Low Divergence Customization Low Complexity + High Divergence

Alternative Directions of Structural Changes

Strategic Options Advantages Disadvantages

Reduced Divergence

Uniformity would reduce Inflexibility in operating cost, improve productivity procedures and make distribution Lower customization easier and thus consumer Increase perceived rejection in spite of low reliability, uniform service cost quality, and greater service availability Greater customization & thus niche positioning Less volume dependent More margins as market may respond positively to personalization Difficult to manage, control and distribute Limited number of customers may be available who are willing to pay the price that customization demands

Increased Divergence

Alternative Directions of Structural Changes

Strategic Options Advantages
Indicates a specialization strategy Narrowing the service offering makes distribution & control easier Perceived positively in the market provided it stands out Indicates a strategy to gain greater penetration Can increase efficiency by maximizing the revenue

Disadvantages
Competitively risky if other provider continues to offer more extensive full service alternative

Reduced Complexity

Increased Complexity

Can be a barrier in providing innovative and superior service quality