Transcript Service Theater

Seminar: Innovation management in services
IPT. São Paulo Dec. 03, 2015
Managing innovation in services.
What’s next: Service Factory or Service Theater?
IPT. São Paulo, Dec. 03, 2015
Marcos Bruno
Bocconi University, SDA Bocconi School of Management
University of Sao Paulo, FEA & Research Unit NPGT
BAGLIERI, E.; KARMARKAR, U. (Org.). Managing consumer services: factory or theater? London: Springer Publishing, 2014
Agenda
• Basic concepts: innovation and innovation management
• Nations are changing the way they create value
• The new service operational models: Factory vs Theatre
• What’s next?
Innovation. Basic concept
technical feasibility
research
techniques
applications
idea and execution
economy
structures
behaviours
socio-economic feasibility
Adaptado de: TARONDEAU, J-C. Recherche et développement. Paris: Vuibert, 1994
innovation
Innovation management
VASCONCELLOS, E. P. G. et al. Innovation in service: the case of Fleury - a Diagnostic Medical Center. In: BAGLIERI, E.;
KARMARKAR, U. (Org.). Managing consumer services: factory or theater? London: Springer Publishing, 2014.
Market says:
Innovation is na obligation
Competition
Innovation
VITAL
Innovation
Cooperation
Overview of wealth of Nations. GDP, 2012
Country
Nominal GDP
Agriculture
Industry
Service
World
71,707,302
5.90%
30.50%
63.60%
U.S.A.
15,684,750
1.20%
19.10%
79.70%
China
8,227,037
10.10%
45.30%
44.60%
Japan
5,963,969
1.20%
27.50%
71.40%
Germany
3,400,579
0.80%
28.10%
71.10%
France
2,608,699
1.90%
18.30%
79.80%
United Kingdom
2,440,505
0.70%
21.10%
78.20%
Brazil
2,395,968
5.40%
27.40%
67.20%
Russia
2,021,960
3.90%
36%
60.10%
Italy
2,014,019
2%
23.90%
74.10%
India
1,824,832
17%
18%
65%
*Source: CIA Worldbook 2012
Italy: services prevails in the economy
Other services
22%
Financial
services
27%
Constructions
5%
Retail, Horeca,
Transportations,
Communications
24%
*Source: Istat
Agriculture
and fisheries
3%
Manufacturing
19%
The way we create value (source: Karmarkar 2004)
Product
Tangibile
Deliver
Service
Ex: Cement
Ex: Catering
Ex: Publishing
Ex: Information
services
Make
Intangibile
Italy: GDP by value creation
1995
Product
Service
Tangible
31%
42%
Intangible
2%
25%
2002
Product
Service
Tangible
19%
41%
Intangible
4%
36%
2009
Product
Service
Tangible
16%
40%
Intangible
4%
40%
USA: GDP by value creation
Delivery
Tangible
Product
Service
10%
25%
35%
6%
59%
65%
16%
84%
Make
Intangible
Source: Karmarkar, Apte 2009, data 2007
What services lead the growth in the USA?
1. Healthcare and social assistance
2. Professional, scientific and technical services
3. Educational services
4. Administrative and support and waste management, remediation
services
•
Source: www.bls.gov
Service industrialization (Baglieri and Karmarkar, 2014)
Manufacturing management principles
Service operations may increase quality and
customization, and reduce costs
Process automation
The new service operational models
Baglieri, E. Italcam Seminar. Sao Paulo, Oct. 08th, 2015
Service Factory & Service Theater. Features
Service Factory
Service Theater
•
Mass production, high volume
•
Emotion
•
Low cost
•
Experience
•
Standardization
•
High customization
•
Efficiency
•
High perceived value
•
Low flexibility
•
Dependability
•
High flexibility
•
Relationship and customer
intimacy
•
Not necessarely low quality…
•
Not necessarely high cost, but
usually high price…
Experience
• Experience comprises either knowledge of or skill of some thing or some
event gained through involvement in or exposure to that thing or event.
• Service experience is linked to the service encounter and how it affects
customers’ perceptions as a whole.
• It is also linked to the concept of servicescape, “the context surrounding the
service” (Bitner, 1992), essentially in physical sense, then in a social one
(Baker et al., 1994) and including the roles played by staff and customers.
Baglieri, E. Italcam Seminar. Sao Paulo, Oct. 08th, 2015
The new perspectives of design
Flexibility
Flexibility
Fixed
Cost of Variety
Variety
Customers
Intangible
components
Input
Tangible
components
Human resources
Baglieri, E. Italcam Seminar. Sao Paulo, Oct. 08th, 2015
Process design
Modular
Contingent
Two sided business models
Baglieri, E. Italcam Seminar. Sao Paulo, Oct. 08th, 2015
What’s next?
• The world changed, the business changed, a few executives are ready to cope with this
change
• Shift to service
• Industrialization of services and servitization of products
• Experience is the new output: can you design and engineer it?
• There is an enormous room for innovation, because the number of production factors you
can use increased, and the most of all the customers is one of them.
• TI drives innovation of services (and products)!
18
Seminar: Innovation management in services
IPT. São Paulo Dec. 03, 2015
Muito Obrigado!
Marcos Bruno |
[email protected]
Innovation in Lab Fleury
Innovation process and managerial factors
Innovation in Lab Fleury
Best managerial practices
 A clear and appropriate strategy is essential to create favorable
conditions for innovation. [Strategy & Structure]
 Innovation in services depends on organizational structures duly
conceived in order to integrate different areas of the company. [Strategy &
Structure]
 The most relevant innovation-related cultural features of the company
must be known and carefully applied to work processes and continuously
cultivated in the organizational environment. [Behavior & Culture]
 Processes are very important to innovate in services: to develop ideas in
a participatory way, create committees to select the ideas with higher
potential to succeed, and regularly follow up the projects on their
continuity/interruption. [Process]
 The knowledge management process is a key component of the
innovation process. [Process]
Innovation in Lab Fleury
Lessons learnt and managerial implications
Dimension Lessons and managerial implications
 Clear and appropriate strategy is essential to create favorable conditions
for innovation.
Strategy &
Structure
 Main features required for growth strategy in services: generation of
knowledge, innovation and excellence in customer services.
 Innovation management should be under the responsibility of the
organization’s top management.
 Innovation on services depends on adequate organizational structures
allowing the different areas to integrate, like operations, marketing, R&D,
and others.
Innovation in Lab Fleury
Lessons learnt and managerial implications
Dimension Lessons and managerial implications
 It is important to know the major innovation-related cultural features of
the organization.
 Positive effect in business performance has been observed at Fleury as a
consequence of the identification of the five most characteristic values of
Behavior &
organizational behavior: “a willingness to experiment”, “to be resultsoriented”, “to have high expectations on the performance”, “to be
Culture
innovative”, “to work collaboratively”.
 Employees should be encouraged to develop innovations on a regular
basis through: a) the systematic release of innovation-linked business
impacts (either positive or negative ones), and b) financial awards and
promotions (also a factor of financial consequence), besides recognition
awards to those professionals engaged in well-succeeded innovations.
Innovation in Lab Fleury
Lessons learnt and managerial implications
Dimension Lessons and managerial implications
 The knowledge management process is a key factor to the process of
innovation.
 Contribution of the fuzzy logic to the economic impact of the business
results (through efficient working procedures), to consumer safety, and to
quality excellence of the services offered.
Processes
 Contribution of the fuzzy logic to the process of transforming tacit
knowledge into explicit knowledge, which is a significant demand in
service innovation processes (higher dependence on the knowledge
acquired through professional practice).
 Work processes with multidisciplinary teams.
 Ongoing process of fostering the development of new ideas from the team.
 Adequate methodologies to obtain efficient interaction (knowledge
exchange) on the external environment (locally and internationally, with
organizations of different institutional missions and goals).
The Operations Management perspective
• Business models may converge; goods are still different from services
• A significant gap in Operations Management (OM) literature: Johnston, 2005;
Metters and Marucheck, 2007; Metters, 2010
• Focus on Quantitave Approach (capacity planning, queuing, demand forecast, etc.)
• Engineering perspective is dominant
• Relationship is neglected
• “Service industrialization” is the emerging phenomenon: Levitt, 1976; Lovelock,
1983; Bowen and Youngdahl, 1998; Karmarkar, 2004; Apte and Chon-Huat, 2005;
Schroth, 2007
Industrialization in general
• What is industrialization?
• Standardization of products and functionalities
• Standardization of parts and components
• Standardization of work processes
• Ability to specify and test output’s requirements
• Ability to package and ship output
• Additional factors
• Low cost, reliable logistics
• Diffusion of capabilities and technologies
• Competition drives innovation and productivity
26