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ISM 270. Service Engineering and Management. ISM 270: Service Engineering and Management. Focus on Operations Decisions in the Service Industry Open to students with an undergraduate engineering/science degree Learn analytical tools and software for decision making

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ISM 270

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Ism 270

ISM 270

Service Engineering and Management

Ism 270 service engineering and management

ISM 270: Service Engineering and Management

  • Focus on Operations Decisions in the Service Industry

  • Open to students with an undergraduate engineering/science degree

  • Learn analytical tools and software for decision making

  • Featuring guest lectures from industry practitioners

  • Text: Fitzsimmons & Fitzsimmons

    ‘Service Management’

    Operations, Strategy, Information Technology

Topics covered

Topics covered

  • The nature of service enterprises

  • Strategy for new service development Technology in services

  • Quality in service encounters

  • Forecasting demand

  • Managing service capacity

  • Supply chains in services

  • Globalization and outsourcing

Ism 270 details

ISM 270: Details

  • 6 – 9pm, Tuesday evenings

  • January 9 – March 13 (Winter) 2007

  • UCSC Silicon Valley Center

  • Instructor: Kevin Ross


  • Teaching Assistant: Geoff Ryder


Who is here

Who is here?

  • My background

  • Brief introductions, student survey



  • Class website

  • Readings

  • Text book

  • Office hours

    • 5-6pm before class, or by appointment

Class plan

Class Plan

  • Allotted class time = 3 hours

  • Average adult attention span = 20 minutes

  • Lecture / visitor / lab / split

Computer issues

Computer issues

  • Who has a laptop?

  • Web access

  • Finding research papers

  • Excel, solver, …



  • Bring:

    • Paper, pen, laptop, …

    • Opinions

    • Questions

    • Interesting articles, stories, anecdotes

  • Provide feedback!!!

  • Make every effort to keep up with readings etc.









Text chapter 1 role of services in an economy

Text Chapter 1:Role of Services in an Economy

Service Management

Professor James Fitzsimmons

University of Texas at Austin

Chapter 1 learning objectives

Chapter 1 Learning Objectives

  • Describe the central role of services in an economy.

  • Discuss the evolution of an economy from an agrarian society to a service society.

  • Describe the features of preindustrial, industrial, and postindustrial societies.

  • Describe the features of the new service economy



  • What are services?

  • Service enterprises?

Service definitions

Service Definitions

Services are deeds, processes, and performances.

Valarie Zeithaml & Mary Jo Bitner

A service is a time-perishable, intangible experience performed for a customer acting in the role of a co-producer.

James Fitzsimmons

Definition of service firms

Definition of Service Firms

Service enterprises are organizations that facilitate the production and distribution of goods, support other firms in meeting their goals, and add value to our personal lives.

James Fitzsimmons

Role of services in an economy

Role of Services in an Economy

Percent service employment for selected nations

Percent Service Employment for Selected Nations

Country 1980 1987 19932000

United States 67.1 71.0 74.374.2

Canada 67.2 70.8 74.874.1

Israel 63.3 66.0 68.0 73.9

Japan 54.5 58.8 59.972.7

France 56.9 63.6 66.470.8

Italy 48.7 57.7 60.2 62.8

Brazil 46.2 50.0 51.9 56.5

China 13.1 17.8 21.2 40.6

Trends in u s employment by sector

Trends in U.S. Employment by Sector

Stages of economic development

Stages of Economic Development

Pre- Use of Standard

dominant human Unit of of living

Society Game activity labor social life measure Structure Technology






Stages of economic development1

Stages of Economic Development

Pre- Use of Standard

dominant human Unit of of living

Society Game activity labor social life measure Structure Technology

Pre- Against Agriculture Raw Extended Sub- Routine Simple hand

Industrial Nature Mining muscle household sistence Traditional tools

power Authoritative

Industrial Against Goods Machine Individual Quantity Bureaucratic Machines

fabricated production tending of goods Hierarchical


Post- Among Services Artistic Community Quality of Inter- Information

industrial Persons Creative life in terms dependent

Intellectual of health, Global



The new experience economy

The New Experience Economy

The four realms of an experience

The Four Realms of an Experience

Experience design principles

Experience Design Principles

  • Theme the Experience (Forum shops)

  • Harmonize Impressions with Positive Cues(O’Hare airport parking garage)

  • Eliminate Negative Cues(Cinemark talking trash containers)

  • Mix in Memorabilia (Hard Rock T-shirts)

  • Engage all Five Senses (Mist in Rainforest)

Source of service sector growth

Source of Service Sector Growth

  • InnovationPush theory (e.g. Post-it)

    • Product looking for a problem

  • Pull theory (e.g. Cash Management)

    • Need drives innovation

  • Services derived from products (Video Rental)Information driven servicesDifficulty of testing service prototypes

  • Social TrendsAging of the populationTwo-income familiesGrowth in number of single peopleHome as sanctuary

Discussion topics

Discussion Topics

  • Describe the work that you do from a service perspective

  • Illustrate how the type of work you do influences a person’s lifestyle.

Quiz question

Quiz Question

  • Name the top 10 USA companies by revenue in 2006

  • How many would you describe as service companies?

Example service innovation disney world

Example Service Innovation: Disney World

  • Link

Data envelopment analysis dea

Data Envelopment Analysis (DEA)

  • Method for evaluating efficiency of similar venues/products

  • Incorporates inputs and outputs – not just one dimensional


Sample lp product mix problem

Sample LP: Product Mix Problem

  • How much beer and ale to produce from three scarce resources:

    • 480 pounds of corn

    • 160 ounces of hops

    • 1190 pounds of malt

  • A barrel of ale consumes 5 pounds of corn, 4 ounces of hops, 35 pounds of malt

  • A barrel of beer consumes 15 pounds of corn, 4 ounces of hops and 20 pounds of malt

  • Profits are $13 per barrel of ale, $23 for beer

Key terms of lp

Key terms of LP

  • Variables

  • Parameters

  • Objective function

  • Constraints

Dea summary of terms

DEA summary of terms

  • Define variables

    • E_k = efficiency of unit k

    • u_j= coefficient for output j (relative decrease in efficiency per unit reduction of output value)

    • v_i = coefficient for input i (relative increase in efficiency per unit decrease of input value)

    • O_jk = observed ouput j units generated by service unit k during one time period

    • I_ik = no. units input used by service unit k during one period

  • Note:

    • k=1..K = service unit counter

    • j=1..M = output counter

    • i=1..N = input counter

Dea objective and constraints

DEA Objective and constraints

Evaluating unit e

Trick = Rescaling to get linear equations

Example from text burger palace

Example from Text: Burger Palace

  • Small, artificial example for illustration!

  • Page 68

  • Excel formulation

Service portal strikeiron

Service Portal: Strikeiron

  • Link to website

Homework week 1

Homework: Week 1

  • Link

  • Login