Service Operations

Read this article. The author argues that services are key to success in supply chain and operations management. Can you identify what services are important in e-commerce?


It is preferred to design and implement SOs in the optimized ways. In this paper, we investigate the recent development of SOs optimization from supply chain perspective. We review four different industries (i.e., e-commerce industry, consumer service industry, public sector, and fashion industry) and four various SOs features (i.e., advertising, channel coordination, pricing, and inventory) related to SOs optimization, respectively. The most aspects of SOs optimization in literature of supply chain are included and all selected topics are highly representative in SOs management. Moreover, we select four important topics to conduct the technical review and study how business success is affected by SOs towards optimization. To be specific, we review the topics of e-commerce industry and consumer service industry and advertising and coordination in supply chain. We find that it is significant to integrate all supply chain parties or features in SOs. This integration helps the firms to find the linkage of success within the whole business process. The decisions derived by optimal control approach are feasible in helping the continual improvement activities in SOs management. We suggest that the service manager should provide a constant level of customer service for long-term market share.

Based on the extant literature, three challenges that exist in the SOs by optimal control approach are as follows.

(i) Managing Service Capacity. Services are different from the physical products. Strategies for managing demand and supply in SOs are critical. Netessine et al. develop a relatively simple approach to determine the optimal service capacity in consideration of service delivery. It would be interesting to explore what the optimal strategies for service capacity are and how SOs achieve tradeoff between the service capacity level and service quality.

(ii) Service Technology. The quality of service is strongly influenced by technology. To overcome this inherent problem, investment in service technology turns out to be significantly important. It has rare research using optimal control approach to study how service technology affects performance in operation management. It would be interesting to investigate the optimal strategy between investment in technology and cost reduction in SOs.

(iii) Linkage between Operational Performance and SOs. The importance of performance in SOs such as service quality, service design, and service sustainability has received growing awareness. However, it has rare research using optimal control approach to study the linkage between SOs and operational performance. It would be interesting to find out the linkage between operational performance and business success.