Module: OPM 582 Case Studies in Service Operations Management
Contents:
Services are the largest and fastest growing segment of our economy. However, services pose
particular challenges to managers due to their intangible and experiential nature, time-perishability, and high levels of customer involvement. Accordingly, managing services requires
tight integration between operations, marketing, strategy, technology, and organizational issues from an integrated viewpoint with a focus on the customer in order to gain competitive
advantage.
This course reviews managerial concepts and selected analytical tools for effectively and efficiently managing service operations in face of these challenges. In particular, we will explore
the theory by applying it to various cases studies of firms covering a broad range of service
industries, such as transport and communication, retailing, hospitality, professional services,
e-services, as well as service functions of the manufacturing sector.
Case topics will be allocated at the beginning of the course based on student preferences. Students will work in teams of two on the assigned case.
Learning outcomes:
Students will intensify their understanding of operations and service operations management
by applying concepts and analytical tools in a broader, interdisciplinary and strategic context
to practical case studies.
The course should be useful for anyone with an intention of going into professional services
such as consulting; into industry (service or manufacturing), where the importance of managing service processes is increasing every day; or with a desire to set up their own service
business.
Prerequisites:
Formal:
Successful application as described below.
Recommended:
Participants should be familiar with the fundamentals of operations management and service operations management. Furthermore, students need a basic knowledge
in mathematics (including linear programming) and in statistics (probability distributions).
Obligatory registration: yes
Further Information on the registration:
Max. 20 participants
Courses
Hours per week
Self-study
ECTS
Lecture
2
6
4
Exercise class
2
2
2
ECTS in total
6
Lecturer/Person in charge
Assignment(s)/work on case studies (in teams), final
presentation, class participation
Prof. Dr. Cornelia Schön
Duration of module
1 semester
Offering
Fall term
Language
English
Form of assessment
Program-specific educational goals
LG 2, LG 4, LG 5
Range of application
Mannheim Master in Management, M.Sc. Business
Education, M.Sc. Business Informatics, M.Sc. Business Mathematics, Diploma Bus. Adm., M.Sc. Econ.
Session Schedule:
Sessions will take place in SO 318 on the following dates (B4 + B5):
11.09.2015 Kick-off & theory
18.09.2015 Theory
02.10.2015 Theory
09.10. – 13.11.2015 Help sessions (discussion and guidance of individual work)
20.11.2015 Final presentations
27.11.2015 Final presentations
04.12.2015 Final presentations
Attendance for the final presentations is mandatory. For your presentation, your team will take
on the role of consultants presenting to a management board consisting of another team which
should critically review the analysis and the recommendations of the consulting team. The assignment of topics to management boards will be done by the instructor along with the allocation of topics to consulting teams. In addition to the presentation, each team has to submit a
written report on the case of around 10 pages.
Registration:
For this course, work is done in teams of 2 (any exception only upon request). Registration for
this course is obligatory. In order to register, please do the following:
(1) As an individual, sign up to the according ILIAS group, and
(2) As a team, send an eMail with the subject line "Registration OPM 582" to
soma@mail.uni-mannheim.de by Sept. 14th, 2015 with the following information:
Basic data for both team members:
 name,
 matriculation number,
 eMail
 program of study,
 semester,
 any modules in Operations Management that you have already completed successfully
during your bachelor or master studies at the University of Mannheim or elsewhere
 any Operations modules OPM 5xx or 6xx that you are attending in parallel in HWS14.
Topic preferences of the team:
 Rank your team’s three most preferred topics by allocating 100 points among them.
Each of the three topics must receive a positive score and any two topics should have
different scores.
Example:
Valid allocation: Topic 8: 60 points, Topic 5: 30 points, Topic 6: 10 points
Invalid allocation: Topic 8: 90 points, Topic 5: 10 points, Topic 6: 0 points
Invalid allocation: Topic 8: 80 points, Topic 5: 10 points, Topic 6: 10 points.
Allocation of topics will be announced by Sep. 16th based on team preferences, and – in case
there are more applications than topics – based on FCFS. Therefore, please note that your registration is binding.
Topics
Topic 1: Rapid Rewards at Southwest Airlines
Southwest Airlines is well known as the low-fare airline that has achieved ongoing financial
success in one of the most financially troubled industries in the United States. Told from the
perspectives of two Southwest customers--a frequent flier and a more typical customer--the
case revolves around two customer service requests from the frequent flier, both of which provide a compelling temptation to cater to the satisfaction of the airline's highest revenue customers. The requests are intriguing because they would neither add cost nor increase the turnaround
time of Southwest's service.
The case allows to explore the economics of the airline industry, specifically, the economic
importance of frequent fliers; Furthermore, it provides an opportunity to explore under what
circumstances it makes sense for a company to differentiate its service offering across its customer base. Exploring the ramifications of these two customer service requests exposes students
to the inherent tradeoffs and intricacies of Southwest's operating model and customer service
philosophy.
Subjects covered: link b/n strategy/value proposition and operations, service operations management, airlines
Topic 2: Redesigning Trauma Operations at University Hospital
The CEO of University Hospital expressed concern about the financial viability of the hospital's
trauma care operations. On the one hand, trauma care was an important part of the hospital's
community service mission and, as a teaching hospital, also part of its educational mission. On
the other hand, trauma care had been a money-losing proposition for many years, and also had
caused disruptions to the hospital's other care-delivery services. The CEO and the chief trauma
surgeon collaborated to rethink physical arrangements and processes to make trauma care more
effective at a lower cost. A natural solution would be to reorganize resources and create an area
dedicated to trauma care. Potential solutions can be drawn from cellular manufacturing concepts that have been effectively moved into the service sector. The case discussion helps to
illustrate that changes in physical configuration cannot, by themselves, ensure success. Students
are challenged to consider complementary factors that will support the configuration change,
as well as the challenges the hospital might face in implementing and sustaining the reconfigured work unit.
The case offers students the opportunity to 1) apply process architecture and resource configuration concepts in the context of a service setting, 2) identify challenges that arise when resources needed to serve an identifiable market segment are scattered around an organization, 3)
appreciate the value of focusing resources when the volume of demand justifies it, 4) recognize
the complementary changes that must be introduced in parallel with the creation of a focused
work unit, and 5) describe the challenges an organization is likely to face when making major
changes in structure.
Subjects covered: Health care; Operations management; Service management; Process design
Topic 3: Manzana Insurance: Fruitvale Branch
The case deals with performance assessment and improvement of a service operation in the
insurance industry, a market that is highly sensitive to response time. Two branch offices in
direct competition are described, and the impact of response time on performance is suggested.
Management choices that impact response time are explored and the poorer performer of the
two branches must decide how to respond.
Subjects covered: Capacity planning; Competition; Performance measurement; Process analysis; Quantitative analysis; Service management
Topic 4: LiveOps: The Contact Centre Reinvented
The case is about the emergence of the virtual contact center, which employs a geographically
dispersed workforce in the cloud. LiveOps' 'home-shore' business model combines the following innovations: 1) it allows agents to work when they choose to, but pays them only for the
time they are serving customers, and 2) it is based on meritocracy, i.e., better performing agents
get more work and are paid more. The virtual contact center is evaluated against traditional
contact center solutions in the context of a relief operation helping storm evacuees connect with
relatives in the wake of Hurricane Katrina.
The main objectives of the case are to explore the opportunities of a new type of contact center,
its suitability for time-critical operations, and the challenges of implementing a home-shore
contact center solution that has myriad applications outside the disaster relief setting used here.
Subjects covered: Business model innovation; Managing employees; Operations management;
Process analysis; Queuing
Topic 5: Shouldice Hospital Limited
Various proposals are set forth for expanding the capacity of the hospital. In assessing them,
serious consideration has to be given to the culture of the organization and the importance of
preserving it in a service delivery system. In addition to issues of capacity and organizational
analysis, describes a well-focused, well-managed medical service facility that may well point
the way to future economies in the field.
Subjects covered: Capacity planning; Expansion; Link b/n Strategy and Operations; Quality
management; Social enterprise; Word-of-mouth marketing
Topic 6: Playa Dorada Tennis Club – Expansion Strategy
Playa Dorada Beach & Resort in Boca Raton, Florida, faces a growing seasonal demand for
tennis services. The number of guests is expected to double in the next few years, and while the
tennis facilities are a popular and well-promoted amenity at the resort, court space is limited.
The director of tennis operations analyzes court capacity, usage history, pricing, and other factors as he assembles a plan for expansion. He must also consider how his strategy affects other
divisions of the Playa Dorada Corporation, including finance, operations, marketing, and sales.
Can he transform the resort's tennis operations into a profit center?
To prepare for case discussion, students complete a quantitative analysis of past and expected
future usage of the tennis facilities and formulate a growth strategy. Students will learn 1) to
illustrate aggregate capacity planning in a service organization, 2) to estimate capacity requirements when demand is variable and uncertain, and 3) to understand the complex ways in which
management of service operations interrelates with other corporate functions.
Subjects covered: Capacity planning; Expansion; Planning; Pricing strategy; Production controls
Topic 7: Implementing LEAN Operations at Caesars Casinos
In December 2014, Brad Hirsch stood on the gaming floor at Harrah's Metropolis Casino and
Hotel in Metropolis, Illinois, where he had recently been assigned the position of General Manager and Senior Vice President. The property was part of Caesars Entertainment, the world's
most geographically diversified provider of casino entertainment. Evidence from customer surveys and data on loyalty-card usage patterns, as well as competitive pressures across the casino
industry, indicated a general need for process improvement at the Metropolis facility. Hirsch
had successfully led employee-centered efforts to apply LEAN operating principles to improve
customer service in three of his company's casinos in Tunica, Mississippi. He believed what he
learned from those experiences would be applicable in the Metropolis location, but wondered
if he should consider a modified approach that could potentially produce results more quickly
with the help of a team of internal experts.
The case offers a comprehensive description of a successful LEAN implementation in a service
environment, offering students an example of the sequence of activities involved, the tools applied, and the challenges faced in the initiative. The story can serve as a self-contained tutorial
on LEAN, allowing students to reflect on key lessons. It also raises questions about whether the
high-involvement, time-consuming approach applied at Tunica should be adopted at the Metropolis facility.
Subjects covered: Lean operations principles in services
Topic 8: Building Sustainable Distribution at Walmart Canada
The director of logistics at Walmart Canada, was developing plans for a new distribution centre
in Alberta. Senior management had presented her with a challenge: why not build the most
sustainable distribution centre in the world? Yet, much remained unclear about how to translate
this challenge into specific actions, while keeping in mind corporate goals for sustainability.
Her team now was exploring three options that promised to be significantly greener: hydrogen
fuel cells for forklift trucks, LED lighting and renewable energy generation from on-site wind
turbines. Any investment in these sustainable technologies had to make business sense, and any
decision could dramatically affect the distribution centre's operating performance.
The case encourages students to explore how sustainability can be translated into specific investments within a key segment of the supply chain. It prompts to consider strategic questions
about how sustainability at a distribution centre can contribute simultaneously to corporate sustainability goals and operational excellence.
Topic 9: DHL Supply Chain
The degradation of the environment has led many governments and customers to pressurize
businesses to make their operations more nature-friendly. The case illustrates an effective example of corporate social responsibility. Specifically, it demonstrates how a small increase in a
supply chain budget can drastically reduce carbon dioxide (CO2) emission in the transportation
of LCD TVs from their manufacturing bases to a distribution centre.
The case highlights optimization concepts within the contemporary objective of minimizing
carbon dioxide emission. Students get to design (or complete) a medium-sized optimization
template using the SOLVER tool.
Subjects covered: Analysis; Environmental organizations; Linear programming; Logistics; Social responsibility; Spreadsheet modeling
Topic 10: A Dean's Dilemma: Selection of Students for the MBA Program
The dean of the Jain University's Business School, wanted to ensure that they admitted the right
set of students to their Master of Business Administration (MBA) program, but he was not sure
about the parameters that could be used to identify students who were ideal for the MBA program. Jain University received applications for the MBA program from across India and admitted approximately 400 students every year. There had been a steady increase in the number of
applications received by Jain University over the years. Placement performance played a major
role in attracting good quality students to the MBA program in India. In 2012, over 180 Business Schools in major cities such as Delhi, Mumbai, Bangalore, Ahmedabad, Kolkata, Lucknow, and Dehradun closed down. Although, there could be many reasons for their closure, their
inability to place their students played a key role. A wrong pick could eventually contribute
towards an increase in the number of unplaced students as well as a reduction in the average
salary. Moreover, there was the possibility of rejecting a placeable candidate. What made the
dean’s job tougher was that he was expected to increase the batch size while also increasing the
quality of the admitted set of students. He acknowledged that MBA admissions needed much
more analytical reasoning, taking multiple criteria into consideration.
This case introduces students to multiple regression and logistic regression concepts. It is expected that students are familiar with the concepts of linear regression, logistic regression and
classification problems. The students can use the multiple regression models to predict the salary of students or use classification tools to predict whether a student will be placed or not.
Subjects Covered: Analytics; Decision trees; Education; Hiring and recruitment; Regression
analysis; Statistical analysis