OM 2 Chapter 1: Goods, Services, and Operations Management
Problems, Activities, and Discussions
1) Explain how operations management activities affect the customer experiences described in the anecdote at the beginning of this chapter. What “moments of truth” would a customer at Disney World encounter? Think about the total experience including lodging, food service, shopping, and transportation, as well as theme park attractions and operations.
The anecdote of a Disney experience focuses on the role of goods, services, and processes in creating customer satisfaction. Students will have many great examples of their Disney or theme park experiences. Moments of truth ...view middle of the document...
For undergraduates, these experiences focus on what they know best such as restaurants, airlines, bookstores, automobile sales or repair, retail stores, and university processes. Graduate students may also include their work and business experiences, and personal experiences such as home mortgages, vacations, and child care. Again focus on the role of OM and its processes, training requirements, product and service quality, and tie to Chapter 1 ideas.
3) What implications do these differences have for organizations that try to provide both goods and services to customers in a balanced CBP? Do you see any conflicts in a goods-producing versus service-providing way of thinking?
• Goods are tangible while services are intangible.
• Customers participate in many service processes, activities, and transactions.
• The demand for services is more difficult to predict than the demand for goods.
• Services cannot be stored as physical inventory.
• Service management skills are paramount to a successful service encounter.
• Service facilities typically need to be in close proximity to the customer.
• Patents do not protect services.
Services especially in the “front office” (at points of contact with the customer) require different skills than producing physical goods, and therefore, it is difficult for firms to do both well. Yes, for example, physical inventory can compensate for poor demand forecast accuracy while service capacity is a surrogate for inventory. Therefore, services must be better at forecasting and demand/capacity planning than goods-producing firms or they will miss a sale. Another good contrast is pure production (backroom) skills versus service management (front room) skills, and how they differ and which is more difficult for employees to do successfully.
4) Provide some examples similar to those in Exhibit 1.3 and explain the degree of goods and services content for these examples.
Students should provide a variety of practical examples. One example is watching a sporting event on television; this is close to a pure service with no goods content but very high service and entertainment content. If you actually go to the game then the ticket, team program, and stadium food represent peripheral goods and more total goods content. Get the students participating – use their examples to illustrate key OM concepts. Help them “see OM” in their examples.
5) Explain why a bank teller, nurse, or flight attendant must have service management skills. How do the required skills differ for someone working in a factory? What are the implications for hiring criteria and training?
Service-providers need technical/operations skills plus human interaction and marketing skills. A bank teller, for example, must be able to complete many types of financial transactions and operate the computer and associated software. The...