Faculty
Professor Robert A. Shumsky
Objectives
The service sector dominates the economies of most developed nations. In the United States, it accounts for 76% of GDP and almost 85% of employment. In addition to the “pure” service sector, the delivery and support of many goods involves a significant service component. The challenges involved in managing services have been complicated by globalization, for many services are now delivered by service supply chains that involve multiple firms and cross national boundaries.
In this class we will develop both quantitative tools and qualitative models that will help us to manage in this complex environment. The class is divided into four components: (i) managing variability in services, (ii) the operations/marketing interface, (iii) demand and revenue management and (iv) service quality and human resources.
In general, two themes will run throughout the course: the importance of aligning the design and management of services with the marketing strategy of the firm and the impact and management of variability in services. Both themes should be familiar to students who have taken Tuck’s core operations course, and we will see how management lessons from the manufacturing sector can sometimes be useful, and sometimes inadequate, when managing services. For both manufacturing and service firms, the strategic mission can be described in terms of cost, quality, delivery, and flexibility. In services, however, defining and measuring these qualities can be particularly challenging. Likewise, we have seen that manufacturing firms can struggle to handle variability in customer demands and production times (recall the Littlefield Technologies simulation in the operations core). Service firms are faced with additional sources of variability, including customers’ expectations, subjective preferences, and their willingness or ability to participate in elements of the service process.
These concepts will be illustrated with examples from health care, financial services, retail, delivery services, airlines, and business process outsourcing. The course will also examine the interactions among service operations management and other functions and areas of research, particularly marketing, information systems, and organizational behavior.
Because it is usually fruitless to discuss service management without some context, the class will be primarily case-based.
Requirements
The course has four graded components: case discussion, team case presentations, two individual case-based quizzes, and a project. The project is optional: students may choose to either take the second individual quiz or complete a project.
1. Case Discussion Contribution All students should be prepared to discuss all cases, including cases for which no work is submitted. While I will do my best to prepare for and facilitate our discussions, the quality of the learning experience depends primarily upon your own preparation and your constructive participation. I will judge your contribution on the extent to which you appear prepared, the relevance and depth of your comments, the degree to which you listen carefully and respond to your peers, and your willingness to take chances in order to further the educational experiences of others.
2. Team Case Presentations Each team will prepare 4 cases as ‘team case presentations.’ For these four cases,teams should prepare a PowerPoint presentation of the analysis, submit a hardcopy at the beginning of class, and save both the presentation and any supporting spreadsheets to the Team Assignment Drop folder. In addition, every student should be prepared to present the team’s analysis of the case (at the beginning of class we will randomly select a few students to present).
Teams should plan for a presentation that is 10-15 minutes in length. Teams may choose to prepare two types of PowerPoint decks: one for the presentation, and another for submission that includes more written explanation and details. An alternative is to submit hard-copies of the presentation deck printed out as “Notes Pages,” with annotation and explanation below each slide.
Three of the cases are explicitly labeled ‘team case presentations’ in the syllabus. These cases are, “Global Financial”, “BlueSky (A) and (B)”, and “Transportation National Group.” The fourth team case presentation may be chosen from any of the remaining 8 cases.
Teams should be composed of 2 or 3 students. By the end of the second class, each team should submit a list of its members as well as its choice for the fourth case presentation (a sign-up list is posted in the course folder). If certain cases are over-subscribed, I may ask some teams to make another choice to rebalance the selections.
3. Quizzes There will be two quizzes. The first will be a case analysis with a focus on process design and service strategy. The second quiz will focus on revenue management. Students may either take the second quiz or complete a project.
4. Project Again, students who complete a project will not take the second quiz. Students who choose to complete a project are expected to apply the techniques in the class to a real-world problem. Projects are normally done individually. Team projects are possible, however, with my permission and if justified by the scale and level of challenge of the project.
A successful project must use a technique developed in class to help solve an organization’s service operations problem. For example, a previous team examined the admissions procedure for the emergency room at the Dartmouth-Hitchcock Medical Center, created a simulation model (using the Extend software package), identified bottlenecks, and suggested process improvements.
If you are an entrepreneur, you might consider a project that describes a new service business. You will submit an operations and marketing plan with supporting analysis.
The deliverables for the project are a summary document of not more than ten pages of text (with attached exhibits, if necessary). You may also be asked to make a brief presentation of the results. If you wish to do a project, a proposal is due by the 10th class meeting. I will schedule meetings to discuss projects just after these proposals are due.
Materials
The course packet contains required cases and associated readings. The packet also includes the Extend software package. I will also assume that all students have the following Excel add-ins: Premium Solver, Crystal Ball, and the Sensitivity Toolkit (if not, please let me know). The emphasis of this class will not be on the details of these software packages, but rather using these packages as tools to understand and analyze business processes.
A recommended (not required) text, for those who desire one, is Service Management: Operations, Strategy, and Information Technology, Fifth Edition, by James Fitzsimmons and Mona Fitzsimmons. The text is on reserve in Feldberg Library.
If you are interested in more information on revenue management in services, I recommend the book Pricing and Revenue Optimization by Robert L. Phillips, Stanford University Press, 2005. For an entertaining and informative history of revenue management, read The Future of Pricing: How Airline Ticket Pricing has Inspired a Revolution by E. Andrew Boyd.
Attendance and Laptop Policy
Everyone is expected to attend and to prepare fully for each session. If you plan to miss a class, notify me in writing. You need not type a formal memo; a simple e-mail will do. Indicate the date and class day.
If you are unprepared for class, please let me know before class begins.
In class, your laptop should only be used for class activities such as working on an in-class tutorial, taking notes, or referring to a spread sheet. Of course, you should not be conducting any non-class activities such as email during class time.
Tuck Honor Code
For team assignments, while collaboration within a team is encouraged, discussions between teams should be limited to general concepts and should avoid the exchange of approaches or solutions to specific homework exercises or cases. It is also a violation of the Honor Principle to use information from previous years’ homework in doing the assigned exercises, cases, and quizzes. This restriction extends to case-related information obtained from other sources. In general, it is a violation of the Honor Principle to hand in for grading work that is not your own.
Team assignments should be collaborative work among the students on the team. Every team member is expected to contribute substantially to every team assignment. Do not put your name on a team assignment to which you have not contributed substantially.
All work on the quizzes must be your own: no communication with other students is allowed. While you take the quiz, you may refer to any of the material that has been distributed for this class, but you may not consult other material (e.g., you may not consult material from the web).
If situations arise where the application of the Honor Principle is unclear, students should seek the interpretation of the instructor or consult with a member of the Judicial Board.
Grading
Class Contribution 25%
Team Case Presentations 40%
Quiz 1 20%
Quiz 2 or Project 15%
Schedule
Class 1: Tuesday, March 24
Introduction to Service Operations Management
Please read the following before coming to class. We’ll spend this first session discussing this reading and developing useful frameworks for thinking about service operations.
“The Nature of Services” pgs. 17-29 from Service Management
Class 2: Wednesday, March 25
Discrete Event Simulation
Install the Extend simulation package on your laptop. You should be able to accept all default choices during installation. Bring the note Extend Simulation Tutorial (found in the course packet) and your laptop to class.
By the end of this class your team should have identified its members and signed up for a 4th Team Case Presentation. Use the spreadsheet, …SOPS\~Sign-Up Lists\team sign-up.xlsx
Poisson and Exponential Distributions
Class 3: Monday, March 30
Variability, Strategy and Operations
Prepare for case discussion. See “Preparation for Shouldice Hospital Limited (Abridged)” in the handout “Preparation Questions for Cases” available in the course packet and on the file server.
The Lean, Green Service Machine
Class 4: Tuesday, March 31
Modeling Variability and Self-Service
Assignment: Complete the modeling exercise (see “The Airport Security Modeling Exercise” in “Preparation Questions for Cases”). Drop your Extend model into the Individual Assignment Drop Folder before class. Also, bring your laptop to class.
Getting in Line: Fliers Self-Sort at Security
You’re Hired
Class 5: Monday, April 6
Back-Office Design
Team Case Presentation 1. See “Preparation for Global Financial.”
Class 6: Tuesday, April 7
Servce Supply Chain Design
Prepare for case discussion. See “Preparation for Dell Computers: Field Service for Corporate Clients”
Class 7: Monday, April 13
Marketing/Operations Interface
Prepare for case discussion. See “Preparation for Tiffany & Co.” Note: The case Tiffany & Co. is not in your course packet, but will be distributed a few weeks before this class.
“There’s More to a Line Than Its Wait”
Class 8: Tuesday, April 14
On-Stage Design
Prepare for case discussion. See “Preparation for Benihana of Tokyo”
“Benihana Extend Simulation”
“Service Blueprinting”
Class 9: Monday, April 20
Class 9: Quiz 1 Discussion
Quiz
Quiz 1 (individual assignment)
Class 10: Tuesday, April 21
Demand and Revenue Management; The Customer Valuation Game
None
If you choose to do a project, the proposal is due today. These proposals will not be graded. They should consist of about one page outlining your ideas and what you hope to accomplish. Please also include a list of team members. This week I will schedule meetings with all students who choose projects.
Class 11: Monday, April 27
Revenue Management Analytics
“Introduction to the Theory and Practice of Yield Management”
Class 12: Tuesday, April 28
Team Case Presentation 3. See “Preparation for BlueSky Airlines: Single-Leg Revenue Management (A) and (B)”
Class 13: Monday, May 4
Applying Revenue Management 2
Team Case Presentation 4. See “Preparation for Transportation National Group”
Class 14: Tuesday, May 5
Service Quality and Human Resources: Service Recovery
Prepare for case discussion. See “Preparation for Northwest Airlines and the Detroit Snowstorm (A)”
“Readings for the JetBlue Meltdown”
“Recovering and Learning from Service Failure”
Class 15: Monday, May 11
Service Quality Management
Prepare for case discussion. See “Preparation for Virginia Mason Medical Center”
“Fixing Health Care from the Inside”
Class 16: Tuesday, May 12
Distribution Systems: People and Processes
Prepare for case discussion. See “Preparation for Dabbawallahs of Mumbai (A)”
“Deliverance”
“Anatomy of a Dot-Com”
Class 17: Monday, May 18
Selecting and Managing Service Employees
Prepare for case discussion. See “Preparation for Commerce Bank”
“Most Likely to Succeed”
Class 18: Tuesday, May 19
Quiz 2: Discussion and Conclusions
Quiz 2 (individual assignment) or Project Deliverables
