Managing Service Operations
Running head: DESIGN AND IMPLEMENTATION
Managing Service Operations: Design and Implementation.
A Review
Question
Review Part one of Managing Service Operations: Design and Implementation by
Bill Hollins and Sadie Shinkins
Onyekachukwu Chiedu
19-865397-PHD-IT-CO
European Global School - University
Garden City Business School
Dr. Waribugo / Port Harcourt
May 20, 2020
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Managing Service Operations
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Bibliographic Cititation
Hollins, B. & Shinkins, S. (2006). Managing Service Operations: Design and Implementation.
London: Sage Publications.
Introduction
The book under review here is entitled Managing Service Operations: Design and
Implementation by authors Bill Hollins and Sadie Shinkins. I review only the first part of the book
which had three (3) chapters titled Services, Strategy and People.
The authors were careful to drive home their thoughts across the three chapters using well
detailed case studies and examples that appealed to me and would be a good read for anyone
looking for a book on service operations management.
Summary
Chapter 1: Introduction to Services Management: The Customer-Led Organization
The author, Hollins B. and Shinkins S., kicked things of by stating a line which was a
fallout from the annals of history “Know your customers, your products, your services and your
capabilities, and get it right first time.” Also, that “A company must offer products or services that
customers want, that can be made or supplied, at a price people are prepared to pay and return a
profit for the company. Without fulfilling all these criteria, the product can be deemed to be a
failure, and in time, so will the organization.”
They then delved in to the history of management itself thus moving from Eli Whitney
through Weber, Marx and then Deming and Crosby, a shift from ‘Interchangeability of Parts’
(Mass Production) to Total Quality Management, one can observe the transition from
people/personnel based to process based management, this leads to somewhat more gain in results.
The authors assert that the niche for growth in the manufacturing industry, in particular, is
in the Service sector. This is backed up with the facts from the GDP and GNP growth across the
industrialized world, including the United Kingdom and Europe. This I can relate with because of
Managing Service Operations 3
the proliferation of service-based firms in Nigeria and Rivers state in particular. These firms cut
across the various sector from Financial, Logistics, Food and Agriculture to name a few. This
growth the author attributes to the increase of disposable income. I would also want to add that the
zest of entrepreneurial action and reduced financial start-up cost for service-based firms has also
deepened this. To continue and deepen the service sector growth, the authors posit that managers
should enhance their knowledge of Service Design.
With the foregoing in mind, the chapter then seeks to answer the burning question “WHAT
IS A SERVICE?”. Kotler et al. (1986) surmised it as ‘any activity or benefit that one party can give
to another that is essentially intangible and does not result in the ownership of anything. Its
production may or may not be tied to a physical product.
Service design can be both tangible and intangible. It can involve artefacts and other things
including communication, environment and behaviors. Most services differ from manufactured
products in up to five ways:
Tangibility. One can physically touch a manufactured product but most services are intangible.
One cannot touch legal advice or a journey, though one can often see the results.
Transportability. Most services cannot be transported and therefore, exported, (though the means
of producing these services often can) although the ability to export services is fast changing due to
new technology.
Storability. Because services tend to be intangible, it is usually impossible to store them. For
example, a car in a showroom if not sold today can be sold tomorrow but an empty seat on an
aeroplane is lost once the plane has left.
Quality. In manufacturing, quality tends to be measured against drawings etc. The measures tend to
be quantitative. Due to the intangible nature of services and as production and consumption often
occur at the same time, it is difficult to ensure consistency and quality.
The quality of a service is often down to the person giving it. As a result, the measures of quality in
a service tend to be qualitative and there are few quantitative measures. The effect of this is a wider
Managing Service Operations 4
variability in services and it is more difficult to control the quality of a service.
Customer Contact. Generally, in manufacturing the customer may be unaware of how the product
came about. In services, production and consumption tend to occur at the same time
(Simultaneity), (Design Council 2002. Part of the material in this section was produced with the
support of the Design Council and represents the personal view of the author).
The features of service as enumerated by Hollins and Shinlins starts off from design,
quality, serial innovation (to keep competitive edge, since it cannot be intellectually protected) to
customer experience which embodies efficiency and satisfaction. As technological advancement
grows, its application to service sector was emphasized by the authors. This can be appreciated
here and now in Nigeria as we have loads of service-based companies that are founded in and
around technology and its diverse applications.
In concluding the chapter, the authors posited to design successful services, managers
should have a complete handle of their customers, who they are, what they want and how they
want what they want. I would want to add that this should be an iterative and continuous process.
Chapter 2: Service Operations Strategy
The authors in their usual character, started this chapter by doing a dive into history again,
this time into the history of Strategy and its definition. Starting from Sun Tzu ‘Art of War’ through
to Porter. With Bennett (1996) having to define strategy as “the totality of management decisions
that determine the purpose and direction of the enterprise and hence its fundamental goals,
activities and the policies it selects in order to attain its objectives”. In crafting the strategy of an
organization, the use of tools such as SWOT and PEST (PESTELI) where the latter is used for
accessing a market and the former o appraise a business unit, idea or proposition.
Competitive advantage, a subject which historically was the core of the Economist Michael
Porter’s work, was then brought to the fore which then gave rise to the three generic strategies viz
Cost Leadership, Differentiation and Focus. Whatever strategy a one chose, there are levels of
Managing Service Operations 5
strategy within an organization to have them deployed, this includes the Corporate, Business and
Functional. The authors were clear in stating that this is a top-down hierarchical strategy approach.
A four-stage approach by Hayes and Wheelwright for operation function was then depicted
which included
Stage 1. Internal Neutrality. Where the operations function is attempting to gain alignment with the
minimum standards within the organization.
Stage 2. External Neutrality. Where the operations benchmarks itself with the competitions
external to the organization.
Stage 3. Internally Supportive. At this stage the operations function is fully effective with an
upward push for greater strides not wanting to rest on its oars.
Stage 4. External Supportive. Here is the operations function is blazing the trail for the future
competitive success. Redefining the market and its expectations.
To fully crystalize the idea of Competitive Advantage, Slack, Chambers and Johnson
(2004) pointed to five performance objectives that should define all types of operations. These
include Quality, Flexibility, Speed, Dependability and Cost. The operations manager needs to
adequately know the importance of each competitive factor whilst establishing which are ‘Order
Winning’ factors that improves the organization’s ability to gain more business versus ‘Order
Qualifying’ factors which are just there so the organization can be used or patronized by the
customer. Hollins and Shinkins made an attempt to portray the effect of the Order Winning and
Qualifying factors through out the life cycle of the organization (introduction, growth, maturity and
decline).
The drivers of operations strategy are the Operations manager, though they are caught in
the day-to-day work, having a well-drawn up strategic plan which is linked to a new service
program backed with experience would lead to new products and service offerings putting the
environment into consideration.
In conclusion, this chapter is founded on Service operations strategy and how the
Managing Service Operations 6
organization through competitive advantage and a well deployed strategic plan can get ahead in its
industry.
Chapter 3: People, Leadership and Management
No process or product is achieved without the involvement of people, Hollins and Shinlins
posited as we begin this chapter. The researched made by Brown and West (2006) at Sears, a US
retailer, drove home this point. They pointed out that 10% increase in employee satisfaction was
associated with a 2.5% increase in customer satisfaction and a 1% rise in sales.
The authors gave insights in to the fact that trust is required to effectively manage people.
In every organization, there are always going to be formal and informal communication modes.
Both modes are required and necessary to adequately run an organization. Where the informal
communication is more pronounced as is the case with most organizations, it is key that the top
management of the organization, find ample ways to build and nurture trust.
The fact that Experts, in any issues that affect an organization, are both external and
internal to the organization. Hollins and Shinlins pointed to the fact that in dealing with some
critical issues that an organization may face, they should use the most untapped knowledge-base of
the employees, who are the ‘internal experts.’ They then when further to give in-road as to how to
use motivation to get the best out of the internal experts (the employees). The motivation
techniques revolved in and around their job and process including job rotation, job enlargement,
job enrichment, ergonomics and empowerment.
In the design of a service, it is important that in working with people, we look at oue to
effectively assign roles and responsibilities. The authors spoke to the use of ‘design circles’ and
roles and responsibilities matrix. Design Circle which was culled from ‘Quality Circles’ devised by
Ishikwa and used in Total Quality Management (TQM) can work from the market research stage
through the whole operations process, or for any improvement in any aspect of the service where a
process is involved. The maximum number of persons, required for an effective Design Circle,
Managing Service Operations 7
posited by the occupational psychologist Edgar Schein (1969) as nine or under. With regards to the
roles and responsibilities matrix, having a RACI chart was advised. This is an acronym for
Responsibility (the persons who complete the task), Accountability (the individual ultimately
responsible), Consult (the persons to be consulted) and Inform (those individuals who need to be
told of the decision). Belbin (1981) identified various team roles that would make up ‘balanced’
teams and these can be used in conjunction with the Design Circle.
The factors that are key to success of any product or service design was stated by a
Research from Henley-Incubator (2003) as a relentless focus on solving a customer problem, a
leader and a team with a passion to achieve, a common language for communicating and charting
progress, relevant and quantifiable assets and skills to contribute and Networking. It is not
surprising that these are heavily ‘people-centred’.
Penultimately in this chapter, Hollins and Shinlins spoke to the concept of leader and
product champions in the delivery of a product or service. The term Product Champion in some
circles describes somebody who supports but does not actually take part in the day-to-day
development activities. Elsewhere the term is used to describe someone who is actively involved in
day-to-day activities.
Finally, the role of managers in the grand scheme of service design in particular and the
organization in general was brought to the fore by the authors. Managers could be the weakest link
in any organization if they can get themselves adequately trained and thus use their position and
training to properly direct an organize their subordinates for the ultimate benefit of the
organization.
Summarily, this chapter was focused on people in and around an organization, their
importance and how to effectively harness and deploy their skill adequately for the betterment of
an organization.
Critique
The idea deposited in this book are closely parallel to Stephen McLaughlin dissertation of
Managing Service Operations 8
service operation management. McLaughlin defined the term ‘service’ as the process by which an
organization engages with its customers, and then meets the customer’s expectation through the
provision of a product in a manner that is acceptable to the customer.
He went on to defined Service Operations Management as the implementation of the
organization’s strategy through the operational control of the organization by focusing on not only
product or service development, but also the delivery of products and services to the end customer
in a way that drives co-creation of value between customer and business. This further buttress that
given by Hollins and Shinlins.
This definition offers a great deal of insight when applied to the concept of operational
management. Without a tangible good to ship, handle and produce, operational managers are
instead focused on the execution of an activity to fill a consumer need. This management of an
instance is rather different than the management of a product.
Understanding this field of work requires an understanding of what a service constitutes.
One useful perspective in differentiating services from other goods is the ‘5 I’s of services’
perspective.
As services behave somewhat differently than tangible products, operations managers must
take into account different considerations when optimizing their operational strategy.
Hollins and Shinlins agreed again with McLaughlin that in order for any organization to
deliver competitive services, process design must be an integral part of service operations
management. In order to deliver competitive services within an often complex business
environment effective service process design must consider how inter-related and complex
processes, departments, people and technology work together.
McLaughlin further stated that when designing service processes, it is important that the
Managing Service Operations 9
first thing one does is to decide where the service starts and finishes; a simple step, but one that
many organizations fail to make. It is also important to understand within the context of your
service process where and how the customer is engaged. By understanding how the customer
interacts along the process the organization can more clearly understand where along the process
co-creation of value can happen, and therefore, what key performance indicators to use, and where.
In general service processes can fall into one of two categories; front office and back office
processes (Johnson & Clark, 2008).
Recommendation
I would recommend this book to those who have a good understanding of operations
management from the standpoint of a product-based angle and want to have much need insights
into how the service operation spectrum is idealized. The definitions, concepts and case studies
inherent may this book a good fit for his/her to grab and fully flow into as may require.
Managing Service Operations 10
References
Bennett R. (1996) Corporate Strategy. London: Pitman. Gosport: FT Prentice Hall.
Hayes R. and Wheelwright S. (1984) Restoring our Competitive Edge. New York: John Wiley.
Johnston, R & Clark, G (2008), Service Operations Management: improving service delivery,
Kotler P., Armstrong G., Saunders J. and Wong V. (1986) Principles of Marketing, 3rd ed, FT
Prentice Hall.
Mclaughlin, Stephen. (2010). Service Operations and Management. 10.1002/9780470569627.ch14.
Porter M. (1980) Competitive Strategy: Techniques for Analyzing Industries and Competitors. New
York: The Free Press.
Porter M. (1985) Competitive Advantage: Creating and Sustaining Superior Performance. New
York: Free Press.
Slack N., Chambers S. and Johnston R. (2004) Operations Management, 4th ed. London: FT Prentice
Hall.
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