Deck 9: Service Supply Relationships

Question 1

How can effective goods supply chain management support environmental sustainability?

Answer 1

Supply Chain Management involves a wide range of activities from procuring raw materials to manufacturing a product to finally delivering to customers. It's a complex and vast undertaking which depends on seamless functioning of suppliers, manufacturers, distributors, retailers and finally to the end customers. Moreover, supply chain sustainability covers legal, social and environmental issues besides sustainable procurement and is related to corporate social responsibility which apprises an organization's impact on social and environmental well-being.
Supply chain can impact the environment in the form of greenhouse gas emissions, harmful gas emissions, deforestation, water pollution, and release of toxic water. If the end product is delivered efficiently and waste minimized, it helps in not only reducing production cost but also harmful chemicals into the environment. Many large retails have started assessing environmental impact of their suppliers. Questionnaires and surveys are used to find out the amount of greenhouse gases emitted, water and energy usage, and the quantity of waste generated. This date gives an idea of the areas that needs to be improved upon and steps necessary to reduce harming the environment.
Thus, environmental sustainability has become a key-word for organizations. Effective use of supply chain and communicating the best practices to suppliers on ways to minimize pollution can have a lasting impact on the goodwill, and in the process on the company's profitability.

Question 2

How has Boomer Consulting, Inc. made the client a coproducer in the service delivery process?

Answer 2

BCI started its services as a CPA firm in 1995. As the company grew, accounting and consulting practices were separated, thereby creating a wholly owned subsidiary. The accounting industry underwent a lot of changes in the last decade of the 20 th century. There was increase in regulations, due to which the cost of doing business with the big accounting firms increased. This resulted in increased demand for smaller accounting firms. That's when BCI's founder leveraged his credentials as a leading voice in the accounting industry, and reached out to smaller firms. Initially the founder travelled to client locations, but as business grew, BCI decided to club client organizations in a particular location and conduct round table sessions to understand challenges and brainstorm ways to meet those challenges.
There can be a variety of service environments - one where the customer plays an inactive role, wherein just wait for services. As long as needs are stated and payments made, there's very little role of such types of customers in the service delivery process. However, at times there is expectation of active customer participation in the service delivery process. Participation of customer refer to resources and actions of customers during service delivery and it includes a customer's emotional, physical and mental inputs.
In BCI's case, customers actively participate in the service delivery process, as customers as well as the service provider discuss challenges and burning issues over round tables. Moreover, customers are encouraged to assist each other by discussing likely solutions to burning topics, which involve mental and emotional inputs of representatives of client companies. The nature of service produce a duality of customer-supplier relationship resulting in service-supply relation instead of supply chain relation as found in cases of manufactured goods. BCI has also tried to use bidirectional optimization to serve its customers, wherein both clients and BCI benefit, by limiting cost of providing service. By calling for a round table conference at a single place, the travelling and lodging cost for BCI representatives are saved. At the same time, cost for a client company is also reduced as these companies need not bear additional logistical charges for BCI's representatives.
Thus, by involving different client organizations in the service delivery process, BCI has tried to deliver service by making the client a co-producer.

Question 3

Does the 7-Eleven Japan distribution system exhibit scalability economics?

Answer 3

Scalability can be defined as a firm's ability to improve and better its contribution margins. Contribution margin helps a company determine profitability of its products or services. It refers to a measure of the gross operating margin of a product. Contribution margin is calculated as the sale price of a product minus total variable cost to produce each unit. Lower the contribution margin, greater is the profitability of a firm. Scalability of a firm occurs when the cost of providing service to additional customers is nil.
In the case of 7E distribution system, the company exhibits high scalability. The cost to serve additional customer is near zero, as the company uses its existing distribution network to serve new customers. By allowing customers to place orders online and make payments at the store, they create an attractive proposition for customers who are unwilling to make online payments.
To cater to students and the working class, who need to commute long distances, the store has introduced the concept of "anytime, anywhere". They have linked their network to a mobile application that can be downloaded in any Android or iOS phone. Customers can place an order at their convenience, even while travelling to and fro from their workplace.
Therefore, 7E in J has exhibited scalability economics, as they do not incur any additional cost to serve new customers. Besides they have been successful in product differentiation, by using online services to cater to customer needs.

Question 4

Explain why the goods analogy of a supply chain is inappropriate for services.

Question 5

How is the concept of "leverage" achieved by Boomer Consulting?

Question 6

How does the 7-Eleven example of B2C E-commerce in Japan illustrate the impact of culture on service system design?

Question 7

Discuss the implications of service outsourcing for employees, stockholders, customers, and host-country economy when a firm outsources a call center overseas.

Question 8

Can the Boomer Technology Circles be applied to other industries? What are some of the risks in pursuing this strategy?

Question 9

Will the 7-Eleven "Konbini and Mobile" system be adopted in the United States ?

Question 10

How has social media affected the growth of the service industry?

Question 11

What features of social media have service firms leveraged in developing their competitive strategies?

Question 12

Identify areas within a few selected service industries (e.g., health care and hospitality) that can benefit from external consultants.

Question 13

How would you train yourself to be a successful consultant in the service sector?

Question 14

Identify activities that compare Walmart's vertical integration efforts with maintaining an arm's-length relationship with suppliers.

Question 15

How does The Boomer Technology Circle illustrate the concept of the bidirectional service supply relationship?

Question 16

What features of the 7-Eleven Japan distribution system illustrate the "Value Net Integrator" E-Business model?