It provides an introduction to service operations management

1. Service Operations Management
By
Dr. Abhay K Srivastava

2. Why Service Operations ?
• Today, services have taken a center stage and most
economies of the world are focusing on service sector.
• The service sector is contributing a huge share in GDP
growth of many countries including India, so it is
imperative to understand the concepts and importance
of services.
• Understanding services from the perspective of
operations management is even more important
because there is a shortage of trained human resources
in service operations.
• The present course will equip you with knowledge of
service operations which will help you in assessing,
analyzing, guiding and managing services in future
careers.

3. Course Learning Outcomes (CLOs)
• Familiarize with the importance and challenges of service
operations and be able to differentiate between manufacturing and
service operations.
• Interpret focused and unfocused service operations and learn to
develop service design.
• Acquire knowledge about types of service processes and strategies
to drive business growth and development.
• Able to apply tools and techniques including demand forecasting
and Queuing theory for planning, managing and motivating service
providers for improving service performance through effective
leadership and team building.
• Analyze customer segmentation and service quality gaps to
undertake appropriate measures for minimizing dissatisfaction and
enhance customer delight.
• Formulate service strategy and implementing them to gain
competitive advantage.

4. Contribution of service sector in India
Economic Survey 2019-20
• The services sector accounts for 55% of
total India's GDP
• The industrial sector is at the second spot and
contributing around 29% of the Indian GDP.
• The agriculture sector is at the third spot and
contributing around 16% of the Indian GDP.

5. Nation % of World
Labor
% Ag % Goods % Services
China 21.0 26 28 46
India 17.0 43 25 32
USA 4.8 2 20 78
Indonesia 3.9 45 16 39
Brazil 3.0 23 24 53
Russia 2.5 12 23 65
Japan 2.4 5 26 69
Nigeria 2.2 70 10 20
Bangladesh 2.2 63 11 26
Germany 1.4 3 28 69
Percent Employment in Services (2018-19)
1-5

6. Service Sector: Pillar of Economy
• Services play a central role in the economies of both developed and
developing countries. They account for over half of the gross
domestic product of all developed economies and constitute the
single largest sector in most developing economies.
• The service sector comprises Trade, Hotels & Restaurants,
Construction, Electricity, Transport, Storage, Communication,
Banking, Insurance, Education & Research, Medical & Health,
Ownership of Dwellings, Real Estate & Business Services and Other
Services (Business Services, Computer & Related Services, Legal
Services, Real Estate Activities, Renting of Machinery & Equipment
and Social & Personal Services).
• Main reasons behind the growth of services include rapid
urbanization, the expansion of the public sector and increased
demand for intermediate and final consumer services. Access to
efficient services has become crucial for the productivity and
competitiveness of the entire economy.

7. Role of Services in an Economy
INFRASTRUCTURE SERVICE
· Communications
· Transportation
· Utilities
· Banking
PERSONAL SERVICES
· Healthcare
· Restaurants
· Hotels
CONSUMER
(Self-service)
GOVERNMENT SERVICES
· Military
· Education
· Judicial
· Police and fire protection
DISTRIBUTION
SERVICES
· Wholesaling
· Retailing
· Repairing
FINANCIAL SERVICES
· Financing
· Leasing
· Insurance
MANUFACTURING
Services inside company:
· Finance
· Accounting
· Legal
· R&D and design
BUSINESS SERVICES
· Consulting
· Auditing
· Advertising
· Waste disposal

8. Types of Services
• Business Services: used by business organizations
like banking, insurance, wholesaling, Retailing,
transportation, warehousing, communication
• Social Services: provided to achieve some social
goals like eradicating poverty, providing
Education in Slum areas
• Personal Services: Different customer experience
differently like recreational services, restaurants,
Healthcare

9. Stages of Economic Activity
• The three-sector model in economics divides economies into
three sectors of activity: extraction of raw materials (primary),
manufacturing (secondary), and services (tertiary).
• According to the model, the main focus of an economy's activity
shifts from the primary, through the secondary and finally to the
tertiary sector. Countries with a low per capita income are in an
early state of development; the main part of their national
income is achieved through production in the primary sector.
• Countries in a more advanced state of development, with a
medium national income, generate their income mostly in the
secondary sector. In highly developed countries with a high income,
the tertiary sector dominates the total output of the economy.
• The model was developed by Allan Fisher, Colin Clark,and Jean
Fourastié.

10. Stages of Economic Activity
Primary (Extractive): Agriculture, Mining, Fishing, Forestry
Secondary (Goods-Producing): Manufacturing, Processing
Tertiary ( Services): Health care, Restaurants, Hotels, Transportation, Maintenance
Quaternary (Information Services)
Education, research, consulting, Information management ,financial planning
Quinary (Human Services)
( creation of information and new technologies, Arts,
Recreation, govt. services

11. What is Service?
• Services are processes and performance that
produce time, place, form or psychological utilities
for customers.
• A cleaning service saves the customer time.
Department stores and grocery stores provide
many commodities for sale in one convenient
place. An online broker puts together information
in a form more usable for the investor. A night out
at a restaurant or movie provides psychological
refreshment in the middle of a busy workweek

12. Service provided and received