Page 10 - DMGT522_SERVICES MANAGEMENT

Unit 1: Service Operation Management

Stage one — Service Awakening Notes

Before 1980, business academics were primarily concerned with the production, marketing
and management of physical goods. By 1955 the service sector accounted for just over
50 per cent of the UK’s gross domestic product, overtaking the product-based sectors. Yet
it took another 20 years before the operations management academics of the day started to
apply their knowledge and skills to service operations. Operations management in 1970
was known as production management (see for example Chase and Aquilano, 1973). It had
developed out of an even more focused view of operations, factory management (see for
example Lockyer, 1962). Factory management was the name given to the search for
efficiency in the post-industrial revolution era based upon Frederick Taylor’s philosophy
of scientific management (1911). Production management was concerned with applying
method study techniques, production planning and control, capacity management and
materials management, for example in production settings, with examples coming from
a wider base than “pure” manufacturing and including examples such as distribution,
transportation, hospitals, libraries and publishers (see for example Adam and Ebert, 1982;
Evans et al., 1984; Stevenson, 1982; Wild, 1980).

Caselet Case: Mass Market Restaurateurs — The Shettys

he Shettys – a certain martial race community from Karnataka, like the Coorgis – are
Ta case in point. They run the ubiquitous restaurants in Mumbai offering all things to
all - South Indian and North Indian fare – yet, the food is rarely authentic. The sambar, a
vegetable-cereal gruel, sour in taste, is not what it tastes back at home, the newly arrived
South Indian in Mumbai discovers to his astonishment. It is actually sweet! The reason is
classic marketing oeuvre: Gujaratis are the moneyed people in Mumbai, mostly in business
and they prefer their dishes sweet; like the Rajasthanis, they perceive that anything that is
sour must be stale! So the Shettys, despite being South Indian themselves, have tailored
their offerings to the preferences of a certain large segment of the market and successfully
established themselves. These customers, the Shettys have analysed, have the capacity to
pay, are in the majority, and their preferences are governed by their cultural
predispositions. It really didn’t matter that for a connoisseur of authentic South Indian or
Punjabi food that these restaurants were frustrating experiences. For the majority of the
customers it was simply fine. Curiously, the Shettys could never replicate their Mumbai
success anywhere else. One reason could be that the discerning diner in North and the East
already had recourse to authentic Punjabi, Bengali, Chinese or South-Indian cuisines
(availability). Another could be that no one community’s preference guided the cuisine
taste and design. So was the story in the South. Similarly, people in the North – and Delhi
offers a good representative study – prefer their chicken dishes with bones; diners in
Mumbai don’t, probably because it is timesaving – a concept so dear to them.

Self Assessment

Fill in the blanks:
6. Before ......................, business academics were primarily concerned with the production,
marketing and management of physical goods.
7. By ...................... the service sector accounted for just over 50 per cent of the UK’s gross
domestic product, overtaking the product-based sectors.

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