Service chain optimization is the application of processes and tools that embrace all functions for improving the efficiency, productivity and, eventually, the profitability of service organizations.
In this regard, profitability of a service organization is measured by the revenue generated from service demand (in the form of service work orders being carried out), and by the costs due to activity of the enterprise's human resources (who provide the service). Service chains consider the full life-cycle of service demand from early stages of forecasting, through planning, scheduling, dispatch, execution and post-analysis.
Service chain optimization is closely related to the fields of
workforce management Workforce management (WFM) is an institutional process that maximizes performance levels and competency for an organization. The process includes all the activities needed to maintain a productive workforce, such as field service management, human ...
and
field service management; the activity performed by field service resources is managed through the latter while being planned and optimized through the former. This relationship is analogous to the relation between
supply chain optimization and
supply chain management
In commerce, supply chain management (SCM) is the management of the flow of goods and services including all processes that transform raw materials into final products between businesses and locations. This can include the movement and stor ...
in the domain of manufacturing. In this regard, the service chain benefits from
demand forecasting
Demand forecasting is known as the process of making future estimations in relation to customer demand over a specific period. Generally, demand forecasting will consider historical data and other analytical information to produce the most accurat ...
, resource planning and scheduling, and long term analysis activities similarly to the manner these contribute in the
supply chain
In commerce, a supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products to customers through a distribution system. It refers to the network of organizations, people, acti ...
(being typically managed by
ERP systems and optimized by supply chain optimization systems).
Origin
The term "service chain optimization" was coined by
ClickSoftware
ClickSoftware is an American technology company which offers automated mobile workforce management and service optimization solutions for enterprise and small businesses, both for mobile and in-house resources. Since 2020, it has been a subsidiary ...
in 1996. ClickSoftware received a patent, US 6.985.872 B2, for continuous planning and scheduling (service chain optimization). The term refers to field service management optimization, workforce productivity, improving
customer service
Customer service is the assistance and advice provided by a company to those people who buy or use its products or services. Each industry requires different levels of customer service, but in the end, the idea of a well-performed service is that ...
, and reducing operating costs.
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Modules
Most commonly, a service chain optimization system is made up of the following units:
# a forecasting module used for:
## uploading the historic demand for service tasks;
## calculating the estimated future demand for service tasks based on the given historic demand levels (per different business units, geographies and for different time domains);
# a planning module used for:
## uploading the forecasted future demand for service tasks from the former forecasting step;
## allocating human resources for covering the estimated future demand for service tasks;
## periodically carrying out optimization procedure of said plan allocations;
# a scheduling module used for:
## receiving entries of actual service tasks;
## receiving updates to the required manning levels of human resources based on the former planning step;
## assigning one or more human resources to fulfil each actual service task in an optimized manner based on the capability of each available service person;
## periodically carrying out optimization of previous assignments that have not yet been performed;
# an analysis module used for:
## collecting and periodically analyzing past demand for service tasks;
## analyzing the performance of said service tasks and the actual performance levels of human resources;
The cycle is completed by feeding the result of analysis back into the forecasting module.
See also
*
Service (economics)
A service is an "(intangible) act or use for which a consumer, firm, or government is willing to pay." Examples include work done by barbers, doctors, lawyers, mechanics, banks, insurance companies, and so on. Public services are those that so ...
*
Service economy
*
Strategic service management Strategic service management (SSM) is a business strategy that aims to optimize the post-sales service that a company provides, by synchronizing service parts and resources forecasting, service partners, workforce technicians, and service pricing. B ...
References
Further reading
* Christos Voudouris at al. ''Service Chain Management: Technology Innovation for the Service Business”, 2008,'' .
External links
''(Links below no longer work as of Aug 2016. Highlighting so someone from Aberdeen perhaps can correct these.)''
Aberdeen''Group'' The Field Service Scheduling & Routing Optimization Solution Selection ReportAberdeen''Group'' Optimizing the Service Supply Chain
{{DEFAULTSORT:Service Chain Optimization
Workforce Management Workforce management (WFM) is an institutional process that maximizes performance levels and competency for an organization. The process includes all the activities needed to maintain a productive workforce, such as field service management, human ...