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The Human Factor
A business's reliance on people plays a key role in the effectiveness of the value delivery process for services. The delivery of a company's services greatly depends on people and their ability to produce quality work for their customers on time.
Reliance on people isn't limited to the back office workers involved in producing services. Of equal importance are customer service professionals. Also, services are often created and delivered at a single point by the same employee. Day-to-day interactions of employees facing customers play a crucial role when it comes to a company's reputation and customer satisfaction.
This interaction is what creates the first impression of a product for the customer and allows employees to represent their companies and products in an effective manner.
Variations in Output
Service companies must consider the variations in output. The capabilities and limitations of reliance on people have a strong impact on increased variation of output.
Variations in output are very common in manufacturing. However, variations are more likely to be identified early and controlled at every step of the supply chain if necessary adjustments are made to machines and equipment.
It's difficult to minimize variations in output in service supply chains. Unlike machines, every employee is unique with unique skill sets and productivity levels. Variations in outputs can be controlled only to a certain level.
Managing Efficiency
Service companies must also be skilled at managing efficiency. Efficiency is managed differently in service supply chains. Levels of standardization, paired with good communication skills, make strong contributions to a company's efficiency management.
Efficiency relies on coordination and communication between various employees and other organizational stakeholders.
Establishing open communication and information sharing enables organizations to confront and resolve any potential problems before they begin to affect workflow adversely.
Capacity
As with manufacturing organizations, service organizations have to ensure that they have the capacity to meet customer demand. In service organizations, the capacity is dependent on the number of employees and the resources available.
In a service organization, the product is the service. However, unlike goods, services can't be created in advance and stored. So capacity must be aligned closely to customer demand. (...)
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