Question

Service operations often face more difficulty in planning than their manufacturing counterparts. However, service does have certain advantages that manufacturing often does not. Explain service planning difficulty, and the advantages and disadvantages.

Answer 1

Q1) Below is how quality in service operations creates unique challenge in terms of planning to management -

1. Services are produced and consumed at the same time and hence the customers will experience the quality of service as and when the service is provided. A low-quality service will immediately trigger a negative reaction and feedback from the customers leading to loss of business.

2. Services are difficult to measure in terms of quality as they are based on the experience of the customer. Each customer is different in their own way which makes it difficult to standardize the service quality.

3. Service quality is difficult to achieve based on the process specifications as there might be a number of internal and external factors influencing the same.

4. Service Recovery is an important aspect in service operations as it is a means of recovering trust of dissatisfied customers.

Q2) Below are the advantages of service operations over manufacturing -

1. Involves lesser setup and capital costs compared to manufacturing.

2. Services depend heavily on human resources and their skills when compared to machines/equipment.

3. Immediate feedback of the service effectiveness helps in quick course correction without huge amount of rework.

4. There is no physical inventory involved in service thus saving inventory management costs.

Below are the disadvantages of service operations over manufacturing -

1. Service business valuation is harder to measure compared to manufacturing

2. Service quality is more of perception based and hence is differs from customer to customer.