Service Profiling

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ARTICLE IN PRESS

Int. J. Production Economics 89 (2004) 309–320

Industrial service profiling:
Matching service offerings and processes
Pontus Johansson*, Jan Olhager
Department of Production Economics, Linkoping Institute of Technology, Linkoping, Sweden
.
.
Received 16 April 2002; accepted 15 January 2003

Abstract
Firms using industrial goods as a resource in their own operationsneed support and services to maintain an efficient
use of these resources. Education, spare parts and maintenance are just some examples of services required by many
industrial customers. These services make up a large part of many industrial companies purchase budget, but, even
more importantly, for the supplier these services often make up a substantial proportion of the company’s profit. Thereis also a trend towards the integration of goods and services. However, there is little help available on strategies for the
efficient supply or manufacture of such services. An operations strategy should not be limited to supporting just new
sales if the after-sales market of industrial services has a large impact on the company’s competitive advantage. A
complete operations strategy shouldtherefore be linked not only to the marketing strategy, but also to a service strategy
of the company.
In this paper we take the supplier’s view on the task of providing industrial services; i.e. the supply of after-sales
services, including tangibles such as spare parts and consumables, related to the maintenance of industrial goods. We
focus on the positioning of industrial services relativemanufacturing, aiming at an integrated approach for
manufacturing and service operations management. We extend the product-profiling concept of Hill to service
operations, developing the concept of industrial service profiling, providing a detailed analysis of market and service
offering characteristics relative production characteristics. The resulting profile reveals possible mismatches in theexisting operations, and can also be used to identify areas in need of corrective actions.
r 2003 Elsevier Science B.V. All rights reserved.
Keywords: Operations strategy; Service operations; After-sales service; Product profiling; Industrial service profiling

1. Introduction
Industrial service is becoming increasingly
important to manufacturing firms for a number
of reasons. To improveprofitability it is not
enough to sell just a product; the real impact on
profitability comes from exploiting downstream
*Corresponding author.

opportunities, by providing the customers with
products such as financing, maintenance, spare
parts and consumables (Knecht et al., 1993; Wise
and Baumgartner, 1999). Since the majority of
manufacturing companies (with industrial customers) not onlydeliver a tangible product but also
serve an after-sales service market, there is a need
to ensure that the operations strategy not only
supports the new product sales, but also conforms

0925-5273/03/$ - see front matter r 2003 Elsevier Science B.V. All rights reserved.
doi:10.1016/S0925-5273(03)00028-8

ARTICLE IN PRESS
310

P. Johansson, J. Olhager / Int. J. Production Economics 89 (2004)309–320

to the after-sales service supply. Thus, it is
essential to understand and appreciate how the
industrial service operations of the firm are related
to its manufacturing processes.
Strategy development within the service operations area draws on manufacturing operations
management ideas to some extent. However, there
are some distinct differences between manufacturing and services.Still, Schmenner (1986, p. 32)
states: ‘‘service managers who claim that their
operations are unique may be left in the dust by
those who see their operations as more generic’’.
Thus, there is a need for a structured approach for
the strategic positioning of service operations. The
positioning of manufacturing processes relative
product and market characteristics, as suggested
by...
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