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http://www.enotes.com/management-encyclopedia/service-process-matr...
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http://www.enotes.com/management-encyclopedia/service-process-matr...
Factory with the universal use of ATMs. Retailing has also seen changes within the Matrix. Warehouse stores such as Sam's Club and Internet sales have allowed retailers to move from Mass Service to Service Factory by drastically cutting labor intensity. However, some have gone in the opposite direction by becoming full-service boutiques and specialty stores stressing customer interaction, customization and labor intensity.
MANAGERIAL CHALLENGES
There are a number of proposed challenges for management that are inherent in a firm's position within the Service Process Matrix. For firms with low labor intensity, plant and equipment choices are extremely important, implying the need to closer monitor technological advances. Since capacity is some-what inflexible, scheduling service delivery is more important so demand must be managed. For firms with high labor intensity, workforce issues such as hiring, training, employee development and control, employee welfare and workforce scheduling are critical. Firms with low customer interaction and customization face more marketing challenges than other firms. The need to "warm up" the service dictates special attention to physical surroundings. For these firms standard procedures are safe to use. In addition, the classic managerial pyramid with many layers and a rigid relationship between layers is appropriate. Firms with high degrees of interaction and customization must manage higher costs resulting from lack of economies of scale. In addition, higher skilled labor costs more and demands more attention, benefits, quality of work life and benefits. The managerial hierarchy tends to be flatter and less rigid.
RECENT CHANGES
While the concept of the Service Process Matrix is conceptual or theoretical in nature, it should be noted that in 2000, Rohit Verma conducted an exploratory study, using a broad sample of quantitative data, in an attempt to validate the idea that management challenges do differ across the different types of services represented by the quadrants of the Matrix. Verma's findings did not closely match the proposed expectations. Capital decisions, technological advances and scheduling service delivery are perceived to be more of a challenge in high interaction/customization. Conversely, hiring, training, employee scheduling, and loyalty were found to become less important at interaction/customization increases. The importance of managing employee career advancement and marketing of services increases as labor intensity increases. Capital decisions and fighting cost increases were found to be more important for the service factory and the service shop than for mass service and professional service. Starting new operations, workforce scheduling and managing organizational hierarchy were found to be more important for service factory and service shops. As such, only four of 22 management challenge relationships proposed by the Service Process Matrix were supported by the empirical analysis. Despite this, the Product Service Matrix continues to be the standard classification scheme utilized in service research. In 2004, Schmenner updated the Service Process Matrix by redefining the axes and the resulting diagonal. He had earlier stated that the lure of the diagonal was the need for control but later changed his mind. He stated that in retrospect, the issue was not control, but productivity that results from "swift, even flow." The concept of Swift, Even Flow argues that productivity increases as the flow of products and information becomes faster and variability decreases. Hence the X axis of the Service Process Matrix changes from interaction and customization to degree of "variation," in the sense that variation occurs in providing the service not that the firm provides a variety of services. Of course, interaction and customization are sources of variation. The Y axis changes from labor intensity to relative throughput time. Throughput time is the time that elapses between the services or facilitating good's initial availability until the service is complete. The Service Process Matrix is now represented by Swift, Even Flow: Swift = relative throughput time; Even Flow = degree of variation; rather than degree of labor intensity and degree of customer interaction and customization. Redefining the axes of the Matrix then causes the classification of services to change from the type service itself to the provider of the service. For example, in the previous Matrix, restaurants appeared as service shops. With the new axes, traditional restaurants are still service shops but gourmet restaurants could be considered professional service and fast food restaurants (with their quick throughput time) would be service factories. Hence, particular services may now be spread out in the Matrix. In order to improve productivity then, firms would strive to move left and upward or up the diagonal. The previously noted challenges for managers remain the same. Consider Southwest Airlines whose turnarounds are done swiftly with little variation. Although, not all services fit cleanly into these quadrants, it is instructive, providing insight into service productivity. It also provides insight into how service firms differentiate themselves from each other as well as helping to explain why successful service firms achieved their positions and maintained them. SEE ALSO: Product-Process Matrix; Service Operations R. Anthony Inman
FURTHER READING:
Dotchin, John, and John S. Oakland. "Total Quality Management in Services: Part 1: Understanding and Classifying Services." International Journal of Quality and Reliability Management 11, no. 3 (1994): 926. Schmenner, Roger W. "How Can Service Businesses Survive and Prosper?" Sloan Management Review, Spring 1986, 2132. . "Service Businesses and Productivity." Decision Sciences 35, no. 3 (2004): 333347. . Service Operations Management. Englewood Cliffs, NJ: Prentice Hall, 1995. Verma, Rohit. "An Empirical Analysis of Management Challenges in Service Factories, Service Shops, Mass Services, and Professional Services." International Journal of Service Industry Management 11, no. 1 (2000).
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