Service Operations Management Research Articles

OM Forum—Making OM Research More Relevant: “Why?” and “How?”

Should OM research become more relevant? I provide my own perspective on this question and some practical ideas for our community to explore. This article is based on my Manufacturing and Service Operations Management (MSOM) Distinguished Fellow inaugural lecture given at the University of Toronto on June 29, 2015.

MSOM Society Student Paper Competition: Abstracts of 2015 Winners

The journal is pleased to publish the abstracts of the six finalists of the 2015 Manufacturing and Service Operations Management Society’s student paper competition. The 2015 prize committee was chaired by Goker Aydin (Kelley School of Business, Indiana University), Karan Girotra (INSEAD) and Sameer Hasija (INSEAD). The other committee members were: Philipp Afeche, Vishal Agrawal, Aydin Alptekinoglu, Atalay Atasu, Opher Baron, Bob Batt, Omar Besbes, Kostas Bimpikis, Robert Bray, Rene Caldentey, Andre Calmon, Carri Chan, Xin Chen, Ying-Ju Chen, Soo-Haeng Cho, So Yeon Chun, Florin Ciocan, Nicole DeHoratius, Sarang Deo, Lingxiu Dong, Pnina Feldman, Santiago Gallino, Srinagesh Gavirneni, Itai Gurvich, Jonathan Helm, Ming Hu, Dan Iancu, Foad Iravani, Srikanth Jagabathula, Fikri Karaesmen, Diwas Kc, Saravanan Kesavan, Bora Keskin, Sang Kim, Song-Hee Kim, Mirko Kremer, Harish Krishnan, Mumin Kurtulus, Guoming Lai, Cuihong Li, Jun Li, Ilan Lobel, Ruben Lobel, Lauren Lu, Alex Mills, Toni Moreno, Anton Ovchinnikov, Rodney Parker, Ali Parlakturk, Alfonso Pedraza Martinez, Ramandeep Randhawa, Paat Rusmevichientong, Soroush Saghafian, Ozge Sahin, Burhaneddin Sandikci, Nicola Secomandi, Melvyn Sim, Amitabh Sinha, Milind Sohoni, Greys Sosic, Brad Staats, Robert Swinney, Alireza Tahbaz-Salehi, Gustavo Vulcano, Gabriel Weintraub, Owen Wu, Wenqiang Xiao, Nan Yang, Zhibin Yang, Fuqiang Zhang, Jiawei Zhang, Yao Zhao, Karen Zheng, and Leon Zhu. The 2015 prize winners are as follows: First Prize: Bike-Share Systems: Accessibility and Availability Ashish Kabra, INSEAD Second Prize: Procurement Mechanisms for Differentiated Products Daniela Saban, Stanford University Finalists (in alphabetical order according to the author’s last name): Online and Offline Information for Omnichannel Retailing Fei Gao, University of Pennsylvania Optimal Purification Decisions for Engineer-to-Order Proteins Tuğçe Martağan, Eindhoven University of Technology Public Relative Performance Feedback in Complex Service Systems: Improving Productivity through the Adoption of Best Practices Hummy Song, Harvard University Impact of Electricity Pricing Policies on Renewable Energy Investments and Carbon Emissions Şafak Yücel, Duke University

Risk measures and their application to staffing nonstationary service systems

In this paper, we explore the use of static risk measures from the mathematical finance literature to assess the performance of some standard nonstationary queueing systems. To do this we study two important queueing models, namely the infinite server queue and the multi-server queue with abandonment. We derive exact expressions for the value of many standard risk measures for the Mt/M/∞, Mt/G/∞, and Mt/Mt/∞ queueing models. We also derive Gaussian based approximations for the value of risk measures for the Erlang-A queueing model. Unlike more traditional approaches of performance analysis, risk measures offer the ability to satisfy the unique and specific risk preferences or tolerances of service operations managers. We also show how risk measures can be used for staffing nonstationary systems with different risk preferences and assess the impact of these staffing policies via simulation.

Retail Clusters in Developing Economies

We develop a game-theoretic model to explore why retail clusters are so popular in developing economies and when governments should facilitate the formation of retail clusters to improve social welfare. First, we find two determinants of retailer clusters: the valuation-cost ratio (consumers’ maximum valuation over retailers’ production cost) and retailer density (the number of retailers over unit transportation cost). The valuation-cost ratio and retailer density indicate retailers’ profit potential and competition intensity, respectively. Second, the equilibrium cluster size increases in the valuation-cost ratio. This finding explains the phenomenon that clusters are usually larger in developing economies (where numerous retailers sell unrecognized brands with low profit potential) than in developed economies. Third, when the retailer density of a product market exceeds a certain threshold, the market coverages of clusters overlap with each other (i.e., the overlapping case). Furthermore, when compared with the nonoverlapping case, the equilibrium cluster size in the overlapping case is larger for low-profit-potential products but smaller for high-profit-potential products. Together, valuation-cost ratio and retailer density define four types of clusters: overlapping massive clusters, nonoverlapping large clusters, nonoverlapping small clusters, and overlapping mini-clusters. Finally, the socially optimal cluster size is larger than the equilibrium cluster size, and the gap between these two cluster sizes decreases in the valuation-cost ratio. The online appendix is available at https://doi.org/10.1287/msom.2017.0663 . This paper has been accepted for the Manufacturing & Service Operations Management Special Issue on Value Chain Innovations in Developing Economies.

Debate: The development of a new discipline— public service operations management

This piece aims to outline the development of a discipline – Public Service Operations Management and will argue the importance of developing an understanding between public management and operations management literature and theory This is reflected through the recent publication of an edited companion which aspires to explore and define bodies of knowledge related to Public Service Operations Management

Supply Chain Contracting in Environments with Volatile Input Prices and Frictions

Problem description: Purchase costs of raw materials required in production tend to fluctuate over time. Mild cost fluctuations merely affect firms’ profitability. Significant variations can lead to supply chain disruption. What are the best contracts to be used in supply chains exposed to fluctuating raw material costs? We ask this question in two contexts—in the presence and the absence of working capital constraint. Academic/practical relevance: We add a framework on how to optimally contract in the presence of stochastic costs and working capital constraints and help managers understand how they can increase profitability. Methodology: We present a game-theoretic study of a bilateral monopoly supply chain with stochastic demand, stochastic input costs, production lead times, and working capital constraints. The upstream firm announces a supply contract to which the downstream firm responds with an order quantity. The contract is a single-price, multi-instrument contract with optional default penalties. Many previously studied coordinating contracts, as well as some noncoordinating ones, are special cases of our general contract. Results: We derive necessary and sufficient conditions that the instruments of the general contract must satisfy for the contract to induce a coordinated outcome—both with and without working capital constraints. Then we translate these requirements into implementable contracts. Indexing (I) on raw material prices and using default penalties (Ps) is necessary, and an I&P revenue-sharing contract turns out to be the most versatile contract for these environments. Managerial implications: We provide clear guidelines on how to contract in situations where production costs of every supply chain member fluctuate significantly, possibly in the presence of working capital constraints. The online appendix is available at https://doi.org/10.1287/msom.2017.0660 . This paper has been accepted for the Manufacturing & Service Operations Management Special Issue on Interface of Finance, Operations, and Risk Management.

A life-cycle perspective of professionalism in services

In this article, we develop a professional service life cycle model to describe the changes in professional work over time. We explore the drivers of these changes through an in-depth longitudinal case study of one specific professional service – Leadership in Energy & Environmental Design (LEED) consulting. We focus on understanding the evolutionary path of LEED consulting work as a result of its knowledge base, community and response to market and technological forces. Case evidence demonstrates an inherent tension between innovation and commodification resulting from multiple demands through various developmental stages. The life cycle model has important implications for value-creation in professional service operations management. First, it broadens the theoretical investigation of professional services to consider all processes and people along the professional continuum – from most innovative to commodified. Coordinated effort along the professional continuum is the key to delivering both effectiveness and efficiency. Second, proactively managing the transitions along the evolutionary path is both possible and desirable. Standardization and specialization improve talent allocation and boost future innovation. We suggest future opportunities to test and enrich the model.

Service interactions modeling for improved management of public transport systems

This paper shows how service science principles may be used for engineering and realizing improved public transport services. It approaches a value co-creation perspective for the management of public transport service operations based on an activity-based model of a generic service system that allows capturing requirements for software intensive service systems. The main focus is on specific implementation issues of the activity-based model of the generic service system, with a strong accent on its most representative component, the service set-up and configuring unit. This model is applied in a case study for planning of a public transport service and describes how a specific service reconfiguring request is formulated. This examination is further used as a document of requirements that drives the construction of an agent-based model expressing value-creation interactions among service system’s stakeholders in public transport services. The usefulness of the developed agent-based model for the analysis of service systems operational capabilities is suggested through simulation. A business scenario related to the management of public transport services is described, and the defined agent-based model is executed with the Presage2 multi-agent programming platform in order to capture specific issues of piece-of-work planning. The proposed approach, evaluated on the simple working scenario, fosters the role of service interaction modeling in supporting a public transport service system to dynamically adapt its operational capabilities in delivering good public transport services, as more or less quantifiable changes can affect service delivery over time.

Accurate Emergency Department Wait Time Prediction

This paper proposes the Q-Lasso method for wait time prediction, which combines statistical learning with fluid model estimators. In historical data from four remarkably different hospitals, Q-Lasso predicts the emergency department (ED) wait time for low-acuity patients with greater accuracy than rolling average methods (currently used by hospitals), fluid model estimators (from the service operations management literature), and quantile regression methods (from the emergency medicine literature). Q-Lasso achieves greater accuracy largely by correcting errors of underestimation in which a patient waits for longer than predicted. Implemented on the external website and in the triage room of the San Mateo Medical Center (SMMC), Q-Lasso achieves over 30% lower mean squared prediction error than would occur with the best rolling average method. The paper describes challenges and insights from the implementation at SMMC.

Operations management in improving elderly home care

The roots of operations management (OM) in manufacturing context, but there has been a growing interest in applying OM approaches in different types of service contexts, including the non-profit sector. In this study, we explore what OM research can do to support the improving of elderly home care. A systematic literature review was done to find out the typical managerial implications of service operations management (SOM) research. Interviews and a group decision support system session during an improvement project were used to point out the operational-level problems and development targets in organising elderly home care. By comparing the research focus of SOM with the operational-level problems observed in the case context, the paper helps in bridging the gap between SOM theory and practice. This research helps both researchers and practitioners understand how SOM research can benefit different types of target organisations.

A Vehicle Routing Problem with Time Windows Approach for Planning Service Operations in Gas Distribution Network of a Metropolitan Area

Service operations management of metropolitan gas networks at operational level implies the optimization of decisions related to logistic activities, taking into account multi-objectives and operational constraints. This paper proposes a metaheuristic approach for the operational planning of the daily logistic activities based on vehicle routing with time window model. Experimental results for a real planning case in a gas distribution network demonstrate the approach effectiveness.

Evaluation of Sports Center Performance Using a Fuzzy Multi-Criteria Decision-Making Model

Abstract The main purpose of this study is to evaluate the performance of sports centers using the fuzzy analytical hierarchy process (FAHP). Our empirical results provide two main insights: first, sports center business management strategies comprise six dimensions and 23 indexes; second, the FAHP analysis shows that the six dimensions are (in order of priority) service prices, site conditions, operations management, traffic conditions, sports products, and staff quality. This study uses the FAHP along with mathematical computing to provide sports center managers with a reliable decision-making reference, and to assist them in formulating the most effective business strategy.

Visualizing Service by Service Design Tools and PCN

This study focuses on visualizing service by service design tools and PCN diagram in process innovation. Firstly, theoretical backgrounds of the phenomena will be reviewed for a better understanding how innovation is perceived in the fields of Operations Management and Service Management. Such discussion clarifies fundamental concepts of innovation, emphasizes essentials of service innovation, and gives base for future SOM research. Then, drawing from the literatures of service operations management (SOM) and innovation, a service innovation case of IKEA, Gwangmyeong in Korea, is analyzed in order to determine how both service design tools and PCN diagram can be used. The overall methodology is employed with a grounded analysis approach and an interpretative alternative. The study finds both approaches as a decision support tool and diagnostic model for assessing inputs, evaluating outputs, allocating resources, and improving success rate of service innovations in SOM.

Being close or being happy? The relative impact of work relationship and job satisfaction on service quality

It is generally recognized that, to ensure high-quality services, service industries, especially the labour intensive ones, need to have satisfied customer-contact employees. However, an under-researched issue relating to the management of service operations concerns employee relationships. Close work relationships, in particular, those between frontline staff and their supervisors, are likely to positively influence employee attitudes during service delivery. This paper examines the relative impacts of leader–member exchange (LMX) and job satisfaction on service performance in labour-intensive, high-contact services. First, the relationships among empowerment, LMX, job satisfaction and service quality are modelled. Next, the moderating effects of employee–customer contact time on these relations are examined. The results show that, contrary to traditional wisdom, job satisfaction does not impact service quality, once LMX is included in the model. This suggests that, work relationships between employees and their supervisors impact service quality more directly than job satisfaction does. Leader–member relationships get enhanced and remain essentially stable under both high and low service contact times in empowered environments.

THE SERVICE MARKETING MIX EFFECT ON CUSTOMER EXPERIENCE AND CUSTOMER EQUITY IN THE SERVICE INDUSTRY

This study aims to examine the effects of services marketing mix elements on customer equity through the customer experience in order to determine an optimal marketing mix strategy in the service industry. This paper utilizes confirmatory factor analysis and structural equation modeling (SEM) to analyze and confirm the proposed conceptual model. This study finds that the process, people, and physical evidence of the “7Ps” of the service marketing mix impart a positive and significant effect on the customer experience in the post-office setting. This result would help practitioners to create a service marketing strategy to differentiate their service from competitors in order to retain existing customers and attract new ones. It was also found that the customer experience is positively linked to customer equity. From the customer equity perspective, this study provides theoretical support that the customer experience, as one of the service operations management measurements, can be employed to measure service performance, which is also closely related to customer equity.

Ranking service science journals using the Google Scholar-based hg-index

This paper provides the young yet fast-growing discipline of service science with its first citation-based journal ranking. Using Google Scholar as a citation source and the hg-index as a citation metric, this paper offers a ranking of 20 service science and service research publication venues based on actual cites of articles published between 2009 and 2013. Results show that the top three journals are (1) Journal of Service Research, (2) Journal of Service Management, and (3) Manufacturing and Service Operations Management. This paper also investigates the relationships between the hg-index, the Journal Impact Factors for 2013, the number of issues that a journal publishes per volume, and the journal’s age.

Call for Papers—Special Issue of Manufacturing & Service Operations Management: Interface of Finance, Operations, and Risk Management

Description The goal of this special issue is to disseminate novel, insightful, and relevant research that unifies concepts from finance, operations, and risk management. All submissions must articulate the operational component of the research and must have a clear finance or risk management connection (but not necessarily both). Potential research topics include (and certainly are not limited to): • Supply chain finance • Interactions between financial claimholders and operational claimholders of a firm • Moral hazard and asymmetric information problems that arise when financial and operational claimholders interact • Novel channels of financing operational decisions • Propagation of financial information in supply chains • The effects of operational decisions of firms (financial and nonfinancial) on financial markets and financial markets’ efficiency • The use of financial markets to inform operational decisions • Novel financial and operational risks and their management • Meaningful applications of data analytics to operations-finance and operations–risk-management interfaces • Insurance and supply chain risks • Risk issues and hedging in commodity procurement • Revenue management: Risk and financial implications of dynamic capacity planning and pricing strategies • Special finance and operations interface topics in industries such as financial services, energy, commodity trading, shipping, and logistics • Operational and financial approaches in managing disruption and catastrophic risks in global supply chains. Groundbreaking and boundary expanding ideas are particularly welcomed. Both theoretical and empirical analyses are encouraged. Submitted papers should feature original research contributions, display the rigor emphasized in the editorial statement of M&SOM, clearly articulate their managerial relevance, and obey the journal’s author guidelines. The review process will be handled by the guest editors and an ad hoc set of associate editors.

Acknowledgment to Guest Editors and Reviewers (2014)

Manufacturing & Service Operations Management (M&SOM) formally thanks the guest associate editors and reviewers, who provided expert counsel and guidance on a voluntary basis. Through their efforts, the journal was able to provide submitting authors with timely, thoughtful, and constructive reviews. In fact, for papers submitted in 2014 (excluding special issue submissions), M&SOM received over 600 reviews from nearly 400 individuals. Half of those reviews were submitted on or before their due date, a figure that increases to 57% if you allow a one-day grace period. Due in large part to the responsiveness of our reviewers, M&SOM made 92% of its 405 manuscript decisions for 2014 regular submissions and revisions within 75 days and 100% within 90 days. The following list acknowledges those who served from January to December 2014. On behalf of the editorial board and the submitting authors, we acknowledge their service for the journal and gratefully appreciate their contributions for our profession. Stephen C. Graves, former M&SOM Editor Christopher S. Tang, M&SOM Editor

Call for Papers—Special Issue of Manufacturing & Service Operations Management: Value Chain Innovations in Developing Economies

Motivation As the world becomes more globalized, the value chains of most companies span over many continents, and increasingly, developing economies constitute important parts of the supply side of these value chains. The supply could be in the form of sourcing of natural resources and materials, or manufacturing operations in which these economies provide low cost of labor. The supply can also be in the form of intellectual capital as some of these economies develop their design and innovation capabilities. Similarly, these economies are becoming sources of demand, as even the bottom of the pyramid had huge demand needs and so they can be potentially big markets. While they form parts of the global value chains, most of these economies faced challenges of extreme poverty. About 1.2 billion people in the world still live below US$1.25 per day. Hence, innovations in the value chains of these developing economies, while benefiting global enterprises, can also play a role in the alleviation of poverty. This special issue is M&SOM’s call to stimulate research in how value chain innovations can make a difference in developing economies.

Call for Papers—Special Issue of Manufacturing & Service Operations Management: Innovations in Supply Chain Interfaces and Structure

Call for Papers—Special Issue of <i>Manufacturing &amp; Service Operations Management</i>: Innovations in Supply Chain Interfaces and Structure