Management of Services: Concepts, Design, and Delivery

Assignments

Case Overview

There are approximately 20 cases in this course. Each person should write up three of these during the term. A write-up is a three-page analysis of the case, guided by the discussion questions, any readings for the session, and any ideas discussed previously in the course.

Write-up Guidelines

Assume you are writing to someone (e.g., a senior person with responsibility in the organization) who knows the facts; keep it succinct; many senior executives don’t want to read long reports. The write-up is not to exceed three single-spaced pages of typed text (not smaller than 12 pt. font, please), with up to three supporting exhibits.

A good paper should clearly and succinctly state recommendations in the first paragraph. The remaining paragraphs should present the rationale for the recommendations, including expected consequences (both desirable and undesirable). Each case has a set of questions (found below), which are a guide to help you with the analysis – however, you should not limit your analysis to narrowly answering these questions. A good report is not a chronology of analysis, but a clearly articulated statement of recommendation and support. If there are options under consideration in the case that you reject, a clear rationale for your decision should be provided. Facts stated in the case need not be restated unless used to make a point. Do not summarize the case in your paper.

Grading

Write-ups will be graded with the following items considered:

• Broad discussion of relevant strategic, operational and environmental issues.
• Analysis
• Qualitative analysis of all factors relevant to the problem.
• Quantitative analysis (if appropriate) and explanation of approach.
• Explicit recommendations, reasoning, and implications of such, including discussion of implementation and expected consequences of the recommendations.
• Clarity, logic, creativity, exposition.

Discussion Questions

SES #	TOPICS	QUESTIONS
1	Introduction to service operations	Case: Benihana How would you describe Benihana’s business model? What’s your assessment of it? What operational issues are well addressed by the Benihana operating system? What weaknesses do you see in the system? What from this system is replicable or transportable to other service businesses?
2	Process design: Order fulfillment	Case: CVS What are the key features of the existing fulfillment process at CVS? What parts are in the greatest need of redesign? Does pharmacy fulfillment process improvement represent a significant (financial) opportunity for CVS? How might you assess this? What changes would you recommend to CVS’s pharmacy fulfillment process? What IT changes, if any, would be required to implement your changes? What general principles would you propose for process redesign based on your analysis of the CVS system?
3	The role of the employee in service operations	Case: Ritz-Carlton What is the essence of the Ritz-Carlton experience? What is Ritz-Carlton selling? How does the Ritz-Carlton create “Ladies & Gentlemen” in only seven days? Do you think the seven-day training period should be lengthened? Alternately, should McBride revamp the entire hotel opening process? If so, how? What’s your assessment of the Ritz TQM system?
4	The role of the customer	Case: Zipcar Where is Zipcar positioned in its competitive landscape? Is the service model sound? What are the critical success factors going forward? What role do customers have within the Zipcar service model? With what other companies do customers have a similar role? In which instances might Zipcar want to manage customer behavior? What mechanisms should the company use to get these desired outcomes? In general, how have companies managed to influence your behavior as a customer? Which are the most effective techniques? The most ineffective? The most creative?
5	Refining retail business models	Case: McDonald’s What were the key operations strategy milestones of McDonald’s over the past 50 years? What are the new challenges McDonald’s faces in the 1990s and beyond? What’s your assessment of McDonald’s performance over the decades? How can McDonald’s avoid losing share to new entrants like Starbucks? Case: Starbucks What factors accounted for the extraordinary success of Starbucks in the early 1990’s? Why have Starbucks customer satisfaction scores declined? How does the Starbucks of 2002 differ from that of 1992? Describe the ideal Starbucks customer from a profitability standpoint. How valuable is he/she to Starbucks? What would it take to keep such customers highly satisfied? Should Starbucks make the $40 million investment in labor in the stores? Why/Why not?
6	Clockspeed and disruptions	What is an “operations strategy”? How should we define and identify “excellent” operations? What companies particularly impress you with their operations? Why? What’s the “recipe” for a winning operations strategy? (How) do these answers differ for service vs. manufacturing companies?
7	Disruptive service models	Case: Southwest Airlines Describe the traditional business model, operations strategy, and enterprise architecture of Southwest. What was the role of the airplane turnaround process in the operations strategy? In what sense was the Southwest business model disruptive? What is your assessment of the evolution of the Southwest model and the decisions Southwest has made over the past decade? What would you recommend to Southwest regarding the opportunity to add slots at LaGuardia airport? Why?
8	Process design: Health care systems	Case: Shouldice Hospital How would you measure the degree of success of Shouldice Hospital? To what do you attribute this success? Why does this hospital run so smoothly? What are its key processes? Is this (Canadian) success surprising to you given the state of the U.S. health system? Propose a set of recommendations and an implementation plan for Shouldice.
9	Service operations frameworks I
10	Service operations frameworks II
11	Retailing and logistics capabilities I	Case: Seven-Eleven Japan What accounts for Seven-Eleven Japan’s remarkable growth? What is SEJ’s value proposition to the customer? What must SEJ excel at in order to continue to fulfill its value proposition? See also the questions on page 9 of the case.
12	Retailing and logistics capabilities II	Case: Wal-mart What operations innovations did Wal-mart develop in its march to competitive advantage? To what degree do you think Wal-mart’s advantages are based on operations? Are Wal-mart’s innovations easy to copy? How have they sustained their advantage? What’s your assessment of Wal-mart’s planning and performance for disaster management? How sustainable do you think Wal-mart’s system is? What might disrupt them?
13	Employee involvement and data mining	In general, what is the relationship between the amount of labor at a retail store and store profit? What are the challenges associated with optimizing staffing levels at this setting? Case: IBM at Dillard’s For the following three questions, please feel free to use the following data: Exhibit 5 & Traffic data (XLS) What is the relationship between conversion rates and labor? Jim Mount, the manager of the Dillard’s store in the case, is given the goal of having $120 sales per labor hour spent. Is he doing a good job of managing staffing levels? Given the variability in traffic, what strategy would you use to staff the stores and schedule employees? What are the costs and benefits of providing employees their schedules one month in advance?
14	The last ten yards of supply chain delivery	Case: Mercadona How is Mercadona able to provide the lowest price to customers and at the same time invest heavily in its store employees? What are some of the strategy, supply chain, and operations choices they made that allows for this to happen? What are the trade-offs of Mercadona’s model? Compare Mercadona’s approach of using largely full-time employees and fixed employee schedules, which are provided one month in advance, versus heavy use of part timers and providing schedules one week in advance. Compare Mercadona’s model of prescribing necessary products to customers versus the traditional retail model of offering larger variety to customers. Given Mercadona’s model, what principles should they follow in reducing product variety? What is your recommendation for employee bonuses for 2008?
15	Consumer insurance	Case: Progressive How does Progressive’s performance as an auto insurer compare to that of typical insurance companies? How has its performance changed over time? What explains the difference in performance? Customers of auto insurers are very price sensitive. How problematic is it to Progressive that customers almost always select the insurer that offers the best price? Assess the viability of the Autograph system. What level of consumer acceptance will it take to make Autograph successful? What are the barriers to consumer acceptance? Should Autograph be expanded nationwide?
16	Internet as disruptive vs. sustaining	Case: Citibank How has the Internet changed banking? What is Citibank’s business model? Sources of differentiation? What is their operations and IT strategy? How does Citibank deliver value to its customers? What are their strengths and weaknesses? Case: Charles Schwab What is Charles Schwab’s business model? What is their operations and IT strategy? What are their strengths and weaknesses? What is your assessment of their response to Internet disruption?
17	Business-to-Business (B2B) supply chain platforms	Case: Alibaba What has been the historic strength and strategy of Li & Fung? Contrast Alibaba’s model with Li & Fung’s. Interpret each business model in terms of multi-sided platforms. Could Alibaba be a threat to L&F? Under what conditions?
18	Information technology outsourcing and consulting
19	Web services, cloud computing and digital media	Case: Amazon What is Amazon’s strategy and its approach to IT? Do you agree that creating Amazon Web Services makes strategic sense for Amazon? Why or why not is it consistent with its strategy? What does Amazon need to do to be successful with Web Services? What recommendations would you make to Amazon regarding AWS? How should Sony Music address the issues it faces?
20	Disruptions and servicization in the auto industry	How would you describe the key disruptions of Ford and Sloan and Toyota/Ohno? Think partly in terms of the product, process, and supply chain (3-D concurrent engineering in Clockspeed) that each firm engineered. What’s your assessment of the servicization proposal of Better Place? What would Henry or Alfred or Taiichi do? Or, does industry require a very different vision and model? Do you think Better Place could have a disruptive effect on the industry and further, on the current industry leader, Toyota? What is the role of operations strategy in your approach?
21	Homebuilding: A complex network of services	Why is the industry structured the way it is? Could it be structured differently? What are the roles of the other value chain members (e.g., mortgage lenders)? Where are the opportunities for disruptive change? Finally, assuming that United Building Supply brings a solid commitment and a lot of financial muscle to the task, what must they do to disrupt and transform this industry? What should the end game look like? What are the critical success factors they should focus on? Is this task insurmountable? What might Henry Ford or Alfred Sloan or Taiichi Ohno do? Or, does industry require a very different vision and model?
22	Supply chain systems: Social responsibility	Case: IKEA (A) How should Marianne Barner respond to the invitation for IKEA to have a representative appear on the upcoming broadcast of the German video program? What actions should she take regarding the IKEA supply contract with Rangan Exports? What long-term strategy would you suggest she take regarding IKEA’s continued operation in India? Should the company stay or should it exit? (Describe the impact of such a decision and how you would manage it.) For those recommending that IKEA continue to source carpets in India, would you suggest that she: continue IKEA’s own monitoring and control processes or sign-up to Rugmark? continue to focus only on eliminating the use of child labor in IKEA’s supply chain or engage in broader action to address the root causes of child labor as Save the Children is urging? Case: IKEA (B) How appropriate were the various actions as IKEA management took in response to the crisis of 1995 as described in the (A) case? What is your evaluation of the IWAY policies and practices that have redefined IKEA’s relationship with its suppliers? What benefits do you see? What concerns do you have? What does the recent audit of Venkat Industries tell us about the effectiveness of IKEA’s overall approach to dealing with the problem of child labor in its supply chain? What should Marianne Barner recommend to Kaisa Mattson in dealing with Venkat Industries’ recent audit result? What long-term changes in IKEA’s philosophy, policies, and practices should she recommend to Anders Dahlvig?
23	Organizational change; Government services	Case: IRS Who are the IRS’s customers and what services does the IRS provide? What role do customers play in maintaining service quality? What role does the IRS play in ensuring service quality? What instigated the change effort at the IRS and what, specifically, was targeted for change? How does the “new” IRS differ from the “old” IRS? In your view, how effective was the change management process? In the year or so following the case, the Wall Street Journal reported that the IRS was considering outsourcing “collections” (overdue or delinquent taxes) to collection agencies. Do you recommend the outsourcing of collections? Why or why not? What is the key managerial challenge facing Charles Rossotti going forward?