Information Center

Services touch the lives of every person in this country every day: food services, communication services, and emergency services, to name only a few. Our welfare and the welfare of our economy are now based on services. The activities of manufacturing and agriculture will always be necessary, but we can eat only so much food and we can use only so many goods. Services, however, are largely experiential, and we will always have a limitless appetite for them.

Service operations management is firmly established as a field of study that embraces all service industries. For example, under the leadership of the senior author of this text, the discipline was recognized as an academic field and designated as a separate track by the Decision Sciences Institute (DSI) beginning with its 1987 Boston meeting. In 1989, the International Journal of Service Industry Management was inaugurated. Finally, the First International Service Research Seminar in Service Management was held in France in 1990, drawing participants from the fields of operations management, marketing, and organizational behavior. This conference recognized the multidisciplinary nature of services and dropped the adjective operations in order to emphasize the integrative nature of service management. Following the 1996 Orlando DSI meeting, a Web site (http://soma.byu.edu) was established to support faculty and students interested in the field of service management.

In this second edition, chapters on project management and managing service inventories were added to make the text appropriate for use in the introductory course in operations management. The test afforded all students of business the opportunity to study operations from the prospective of their future employment in a service economy.

This third edition recognizes the emergence of a new frontier in service management, that of an age of experiences. We explore this exciting new experience economy in the first chapter. We also note in the first chapter that new jobs are being created primarily in services and many of those jobs are in high-tech firms offering professional salaries. Further, entrpreneurial oppurtunites for creative business students abound in services.

In this edition we continue to emphasize  three themes that run throughout the book. First, this is a book devoted to the management of service operations from an open systems view, which means that the customer is a participant in the delivery process. Second, for services the process is the product and, therefore, marketing and strategic issues cannot be separated from operations, which in turn cannot ignore behavioral issues associated with customer contact. Finally, we recognize that the role of information technology (IT) no longer is just an enabler of continuous improvement in productivity and quality in services. We have included a new chapter on Internet services to explore this new phenomenon called e-commerce. The Internet represents a new delivery channel for services that has redefined the competitve marketplace with a global reach.

• The book is written in an engaging literary style, makes extensive use of examples, and is based on the research and consulting experience of the authors.
• The theme of managing services for competitive advantage is emphasized in each chapter and provides a focus for each management topic.
• The integration of marketing, operations, and human behavior is recognized as central to effective service management.
• To dispel the common belief that manufacturing management principles can be applied to services without recognizing the different operating environments, the role of services in society and the uniqueness of service delivery systems are stressed.
• The information technologies of yield management, data envelopment analysis, and computer simulation are included as illustrations of the three strategic roles of information in managing services.
• Emphasis is placed on the need for continuous improvement in quality and productivity in order to compete effectively in a global environment.
• To motivate the reader, a vignette of a well-known company starts each chapter, illustrating the strategic nature of the topic to be covered.
• Each chapter has a preview, a closing summary, key terms, and definitions, service benchmark, topics for discussion, solved problems and exercises when appropriate, and one or more cases.
• For this third edition, a CD-ROM contains PowerPoint lecture slides, ServiceModel simulation software, and Excel spreadsheet, chapter quizzes, and web sites.
• The instructor’s manual contains case analyses, exercise solutions, objectivce test banks, and a video library list.

This edition includes the following pedagogical in each chapter:

Learning objectives to help students focus on the key concepts to be explored in the chapter.

Service Benchmarks to illustrate an outstanding example of excellence in service.

Key Terms and Definitions are listed at the conclusion of the chapter as a quick reference and reminder of the new vocabulary just presented. 

Solved Problems before the exercises to illustrate in detail the steps to resolve a quantitative problem.

We were very fortunate to have our manuscript reviewed by several colleagues—all people of integrity, wit, and vision. Their detailed comments, insights, and thought-provoking suggestions were gratefully received and incorporated in the text in many places. Special thanks and acknowledgment go to the following people for their valuable reviews of the first edition: Mohammad Ala, California State University, Los Angeles; Joanna R. Baker, Virginia Polytechnic Institute and State University; Mark Davis, Bentley College; Maling Ebrahimpour, University of Rhode Island; Michael Gleeson, Indiana University; Ray Haynes, California Polytechnic State University at San Luis Obispo; Art Hill, the University of Minnesota; Sheryl Kimes, Cornell University; and Richard Reid, the University of New Mexico.

The second edition has benefited from the constructive comments of the following reviewers: Kimberly A. Bates, New York University; Avi Dechter, California State University, Northridge; Scott A. Dellana, East Carolina University; Sheryl Kimes, Cornell University; Larry J. LeBlanc, Vanderbilt University; Robert Lucas, Metropolitan State College of Denver; Barbara A. Osyk, University of Akron; Michael J. Showalter, Florida State University; and V. Sridharan, Clemson University; and Suresh K Tadisina, Clemson University.

The following reviewers contributed their experience and wisdom to this third edition: Sidhartha Das, George Mason University; Avi Dechter, California State University at Northridge; Byron Finch, Miami University of Ohio; Edward M. Hufft, Jr., Metropolitan State College of Denver; Ken Klassen, California State University at Northridge; Richard Reid, University of New Mexico, Alburquerque; Ishpal Rekki, California State University at San Marcos; and Ronald Satterfield, University of South Florida.

We wish to acknowledge two students who have assisted us. Fang Wu, Ph.D. student at the University of Texas at Austin, assisted in the development of some exercises and preparation of the PowerPoint lecture presentations for the second edition.Edmond Gonzales, and MBA student at Texas, prepared the chpater quizzes for the third edition CD-Rom. A special thanks is extended to Rob Bateman of the ProModek Corporation for the prepartion of the Pronto Pizza simulation case and assistance in our adoption of the ServiceModel software for this edition. The personal computer, printer, and software provided through th genorosity of  William H. Seay, who endowed the senior author’s professorship, made the writing of this book a great pleasure. We are also indebted to Mrs. Margaret Seay who continues her generous support.

We express special appreciation to all our friends who encouraged us and tolerated our social lapses while we produced this book. In particular, we are indebted for the support of Richard and Janice Reid, who have provided lively and stimulating conversations and activities over many years and who generously allowed us the use of their mountain retreat. The beginning of the first edition was written in the splendid isolation of their part of the Jemez Mountains of New Mexico. No authors could want for better inspiration.

Overview of the Book

Part I begins with a discussion of the role of services in an economy. We first look at the evolution of societies based on economic activity, beginning with agriculture and moving to industrialization and finally to service economies. We also introduce the concept of an emerging experience  economy. Next, we consider the distinctive characteristics of the service operations which lead to an open-systems view of services. The challenge of delivering exceptional service quality is addressed in the context of a comparison of customers’ perceptions and expectations. This section concludes with the formulation of the strategic service concept and a discussion of the generic competitve service strategies of overall cost leadership, differentiation, and focus. The competitve role of information is captured in the concept of the virtual value chain.

Designing the service enterprise to support the competive strategy is the topic of Part II. The service delivery system is engineered through the use of a process flowcharting concept called blueprinting that explicitly recognizes the front office, where customer contact occurs, and the behind-the-scenes back-office operations. Questions concerning the facility design and layout are next addressed from the perspective of both customer participation and operations efficiency. Using analytical models, the critical decision of where to locate the service facility is determined. Finally, a new chapter on Internet services explores the emerging area of the virtual service encounter.

Management of day-to-day operations is addressed in Part III. Forecasting service demand begins the discussion of service operations management. The question of managing waiting lines is addressed from a psychological viewpoint. A new supplement on computer simulation prepares students to use the ServiceModel animated software that is included on a CD-ROM disk packaged with the textbook. Capacity planning using queuing models is next addressed. Because the nature of services provides a challenge in matching capacity with demand, strategies are discussed, including the concept of yield management. Managing facilitating goods follows. A new chapter on the topic of service chain management includes a discussion of the business-to-business purchase of services. Microsoft ® Project software is the foundation for the topic on project management. Linear programming models with applications in services are illustrated with Microsoft^® Excel Solver.

In Part IV, we look at strategies to achieve world-classs service. The concept of continual improvement in quality and productivity is discussed in the context of the stages of service firm competitiveness. Finally, growth and expansion are explored using global service strategies.