Service chain optimization
Encyclopedia
Service Chain Optimization is the application of processes and tools that embrace all functions for improving the efficiency, productivity and, eventually, the profitability of service organizations.
In this regard, profitability of a service organization is measured by the revenue generated from service demand (in the form of service work orders being carried out), and by the costs due to activity of the enterprise's human resources (who provide the service). Service chains consider the full life-cycle of service demand from early stages of forecasting, through planning, scheduling, dispatch, execution and post-analysis.
Service Chain Optimization is closely related to the fields of Workforce Management
and Field Service Management
; the activity performed by field service resources is managed through the later while being planned and optimized through the former. This relationship is analogous to the relation between supply chain optimization
and Supply Chain Management in the domain of manufacturing. In this regard, the service chain benefits from demand forecasting, resource planning and scheduling, and long term analysis activities similarly to the manner these contribute in the supply chain
(being typically managed by ERP
systems and optimized by supply chain optimization
systems).
The cycle is completed by feeding the result of analysis back into the forecasting module.
In this regard, profitability of a service organization is measured by the revenue generated from service demand (in the form of service work orders being carried out), and by the costs due to activity of the enterprise's human resources (who provide the service). Service chains consider the full life-cycle of service demand from early stages of forecasting, through planning, scheduling, dispatch, execution and post-analysis.
Service Chain Optimization is closely related to the fields of Workforce Management
Workforce management
Workforce management encompasses all the activities needed to maintain a productive workforce. Sometimes referred to as HRMS systems, or even part of ERP systems...
and Field Service Management
Field Service Management
Field service management is an attempt to optimize processes and information needed by companies who send technicians or staff "into the field" . Optimization is difficult, since it involves intelligent scheduling and dispatching of multiple technicians to different locations daily, while...
; the activity performed by field service resources is managed through the later while being planned and optimized through the former. This relationship is analogous to the relation between supply chain optimization
Supply chain optimization
Supply chain optimization is the application of processes and tools to ensure the optimal operation of a manufacturing and distribution supply chain. This includes the optimal placement of inventory within the supply chain, minimizing operating costs...
and Supply Chain Management in the domain of manufacturing. In this regard, the service chain benefits from demand forecasting, resource planning and scheduling, and long term analysis activities similarly to the manner these contribute in the supply chain
Supply chain
A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to...
(being typically managed by ERP
Enterprise resource planning
Enterprise resource planning systems integrate internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application...
systems and optimized by supply chain optimization
Supply chain optimization
Supply chain optimization is the application of processes and tools to ensure the optimal operation of a manufacturing and distribution supply chain. This includes the optimal placement of inventory within the supply chain, minimizing operating costs...
systems).
The Modules of Service Chain Optimization
Prevalently, a Service Chain Optimization system is made up of the following units:- a forecasting module used for:
- uploading the historic demand for service tasks;
- calculating the estimated future demand for service tasks based on the given historic demand levels (per different business units, geographies and for different time domains);
- a planning module used for:
- uploading the forecasted future demand for service tasks from the former forecasting step;
- allocating human resources for covering the estimated future demand for service tasks;
- periodically carrying out optimization procedure of said plan allocations;
- a scheduling module used for:
- receiving entries of actual service tasks;
- receiving updates to the required manning levels of human resources based on the former planning step;
- assigning one or more human resources to fulfill each actual service task in an optimized manner based on the capability of each available service person;
- periodically carrying out optimization of previous assignments that have not yet been performed;
- an analysis module used for:
- collecting and periodically analyzing past demand for service tasks;
- analyzing the performance of said service tasks and the actual performance levels of human resources;
The cycle is completed by feeding the result of analysis back into the forecasting module.
See also
- Customer serviceCustomer serviceCustomer service is the provision of service to customers before, during and after a purchase.According to Turban et al. , “Customer service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer...
- Service (economics)
- Service economyService economyService economy can refer to one or both of two recent economic developments. One is the increased importance of the service sector in industrialized economies. Services account for a higher percentage of US GDP than 20 years ago...
- Field Service ManagementField Service ManagementField service management is an attempt to optimize processes and information needed by companies who send technicians or staff "into the field" . Optimization is difficult, since it involves intelligent scheduling and dispatching of multiple technicians to different locations daily, while...
- Workforce managementWorkforce managementWorkforce management encompasses all the activities needed to maintain a productive workforce. Sometimes referred to as HRMS systems, or even part of ERP systems...
- Strategic Service ManagementStrategic Service ManagementStrategic service management is a business strategy that optimizes a company's provided services through the effort of synchronizing: service parts and resources forecasting, service partners, workforce technicians, and service pricing....
Further reading
- Christos Voudouris at al. Service Chain Management: Technology Innovation for the Service Business”, 2008, ISBN 978-3540755036.
- ClickSoftware. Service Chain Optimization For Dummies, John Wiley & Sons Ltd, 2010, ISBN 978-0-470-68855-7.