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International Journal of Operations amp; Production Management
The Different Operations Strategy Planning Process for Service Operations Curtis P. McLaughlin Ronald T. Pannesi Narindar Kathuria
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Curtis P. McLaughlin Ronald T. Pannesi Narindar Kathuria, (1991),'The Different Operations Strategy Planning Process for Service Operations', International Journal of Operations amp; Production Management, Vol. 11 Iss 3 pp. 63 - 76
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The Different Operations |
Operations |
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Strategy |
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Strategy Planning Process for |
Planning |
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Service Operations |
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Curtis P. McLaughlin and Ronald T. Pannesi |
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University of North Carolina at Chapel Hill, USA
Narindar Kathuria
National Institutefor Training in Industrial Engineering, Bombay, India
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Introduction
Although the competitive importance of manufacturing strategy is now recognised[l,2], the counterpart concepts for service operations are less well articulated[3]. With the service sector accounting for over 70 per cent of jobs and economic activity in the USA and much of Europe, it is important to develop a corresponding process for developing service operations strategy, taking into account the work already done on manufacturing strategy.
The growing concern in the USA and Europe over losses in competitive position in manufacturing to Japan and many Third World countries has led to renewed interest in improving functional strategies for manufacturing[l,4,5,6,7]. Quinn and Gagnon[8] and Johnston[9] have expressed their concerns that American and British service industries respectively will follow manufacturing downhill in worldwide competition unless appropriate strategies are adopted.
While in manufacturing the functional strategy must support the corporate strategy in the marketplace and be co-ordinated with other functional strategies, there is sufficient buffering between the manufacturing system and the customer that strategies can be developed within functions and then co-ordinated. In services, however, there are many issues where co-ordination is not an adequate response. Virtually all strategic issues involving customer contact and front-office operations must be the result of joint decision making involving marketing, operations, finance, and human resources. What little buffering there is between the technical core and the boundary-spanning functions, such as inventory, occurs between the front office and the back room and this interface then becomes the locus for interfunctional co-ordination on strategic issues. Consequently, planning for the front-office operations differs in many ways from the manufacturing strategy development, while the back-room strategy differs relatively little from manufacturing strategy. Managers whose organisations consist of a mixture of manufacturing and services operations need to be aware of these process differences when making operation
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