Management of Supply Networks for Products and Services

Management of Supply Networks for Products and Services: Concepts, Design, and Delivery Management of Supply Networks for Products and Services Services as a Foundation for Emerging Value Networks Globalization Competition Redefinition Of Business Model &Customers Productivity Customer Satisfaction Service Excellence Based on the Framework of Service Operations Competition and Differentiation based on services ((Strategy) Globalization Customer Need Customer Expectations Competition Redefinition of Business Model &Customers Competitor Offering Our Offering Productivity Customer Satisfaction Service Excellence Based on the Framework of Service Operations Characteristics of Services Globalization Understand drivers for productivity and customer satisfaction (quality) well for traditional supply chain settings…. Competition Redefinition of Business Model &Customers Productivity Customer Satisfaction But what happens when we start to measure productivity and service quality for services? Need to understand service characteristics….. ATTRIBUTES OF SERVICES •Intangibility - explicit and implicit intangibles •Perishability - an hour of non-production is an hour lost •Heterogeneity - inherent variability of service •Simultaneity - services are simultaneously produced and consumed •Based on Consumer Perception •Value Added Concept •Main Services Versus Facilitating Services Service Excellence Based on the Framework of Service Operations A Basic Service Operations Framework Globalization Competition Redefinition of Business Model &Customers Productivity Competitive Analysis Customer Satisfaction Financial Analysis Strategic Analysis Manager t c ep Con ign des Operations Management Service Management Orders Marketing Information about needs External Environment Backroom Server Resources Service Performance Customer De c oupli ng Internal Environment Service Excellence Based on the Framework of Service Operations Understanding the dynamics of customer satisfaction Globalization Competition Redefinition of Business Model &Customers PEOPLE SERVICE PROFIT Ritz-Carlton Case British Airways Case Productivity Customer Satisfaction MANAGEMENT Loyalty, IInnfo fo on Customers’ Customers’ Feed back and O pportunities Feedback Opportunities f Continuous Improvement for Improvement Complaints, Compliments, Suggestions ggestions Su Fair Treatment (Pay, (Pay, Benefits Benefits,, Respect), Training, Training, Support of IInternal nternal Environment Personnel SERVER Feedback, Ti Tips, ps, Gratitude, Respect Products and Policie iciess tha thatt Satisfy atisfy Needs and Desires S Struggle for Co ntrol in Control Different Phases of Encounter Encounter Requirements for Servi Service ce Guarantees Requirements Requirements for Customer Customer Satisfaction / Loyalty Effort, S Skill, kill, Respect, Positive Att Attitude itude CUSTOMER Service Excellence Based on the Framework of Service Operations Defining measures for customer satisfaction Globalization GAP MODEL FOR SERVICE QUALITY Competition Redefinition of Business Model &Customers Ritz-Carlton Case British Airways Case Productivity Customer Satisfaction How to distinguish between and address quality issues? Personal Needs Past Experience Expected Service GAP 5 Perceived Service GAP 1 How ttoo define quality performance measures? SERVICE SERVICE BUSINESS Intangibility, perishability, heterogeneity, simultaneity CONSUMER Word-of-mouth Communications Service Delivery (including contacts) GAP 4 External Communications To Consumers GAP 3 Translation of Perceptions into Service Quality Specifications GAP 2 Management Perceptions of Consumer Expectations Service Excellence Based on the Framework of Service Operations Understanding the productivity side of the equation Globalization Competition Redefinition of Business Model &Customers MATCHING SUPPLY AND DEMAND Merrill Lynch Case Call Center Case Productivity Customer Satisfaction Waiting Time / • • Recall the physics of dynamic systems that point to the lack of managerial control at high levels of utilization. Best-in-class firms strive strive for superior mechanisms for matching supply and demand to reduce utilization levels Unsatisfied customers / Operating costs Superior Mechanisms for Matching Supply & Demand Utilization rate ((r)) .8x Service Excellence Based on the Framework of Service Operations 1.0 Understanding the productivity side of the equation Globalization Competition REDUCING UNCERTAINTY AND VARIABILITY! Redefinition of Business Model &Customers Merrill Lynch Case Call Center Case Barilla Case Productivity • • • • Best-in-cl Best-in-class ass firms further understand that reducing uncertainty can alter the fundamental dynamics fund amental d ynamics of their and systems an d strive towards towards this Please recall the consequences of uncertainty in operational processes, and the benefits from mitigating them from the Key Takeaways Ta keaways Part IV document JIT systems are a limit limit (ideal) state of dynamic systems when eliminate we e liminate all uncertainty in operations Hence in practice, JIT requires requires a Just-in-case Just-in-ca se approach as well… Customer Satisfaction Waiting Time / Mechanisms for Reducing Uncertainty Unsatisfied customers / Operating costs Utilization rate ((r)) .8x Service Excellence Based on the Framework of Service Operations 1.0 Focus on Value Networks and the Role of Information Globalization Competition Redefinition of Business Model &Customers UPS Project Productivity Customer Satisfaction Buye rs: Buyers: VN Leaders s Working Capital Working Value Network Visibility Suppliers Suppliers Logistics s Providers s Providers Velocity Suppliers r Logistics Logistics Providers Buyers Buye rs Suppliers From linear to b buyer-centric uy yer-centric value network ((VN)) Service Excellence Based on the Framework of Service (Oriented) Operations Evolving and changing needs of customers Globalization Competition Redefinition of Business Model &Customers UPS Project Customer Satisfaction Productivity Needs Opportunities CS CM OEM • Sell excess production capacity • Incidental sales force • Financing • Increased sourcing scope LP LP CS: Component Supplier CM: Contract Manufacturers OEM: Original Equipment Manufacturer Service Excellence Based on the Framework of Service (Oriented) Operations What we learnt from guest speakers • Yossi Sheffi (MIT) • • Emerging trends in supply chain technology Technology supports services and business models, and not the other way around… • Carmen Baez (Omnicom) • • Managing autonomous service organizations PSP Example • Jim Walker (Merrill Lynch) • • Managing change Managing distributed services provided by independent agents • Val Fiegenbaum (General Systems Co.) • Innovation in Management • Charlie Fine (MIT) • • Industry dynamics and evolution Age of temporary advantage • Adriana Pereira (CVRD Brazil) • • IT as an enabler of productivity Managing change • Jake Barr (P&G) • Services play a critical role in P&G supply chain– P&G does not provide any service to customers, but recall that P&G sells $0 out of $51 Billion, directly to the customer… A few things to remember… • In services, our imagination and creativity are the limit to our success • Please don’t forget to materialize your services • There are no mature businesses but only mature ways of doing business • Supply chains that deliver superior service services efficiently can offer to their customers a differentiated and superior product. P&G is a prime example of such a supply chain… • Just-In-Time cannot exist without Just-In-Case • People-Service-Profit