Category Archives: The Role of Technology in Operations

Reduced labor costs

Reduced labor costs Technology can reduce labor costs in services in two ways. First, it can be used as a total replacement for labor. In addition, technology can provide support to existing labor. thereby increasing labor productivity  As an example. automatic teller machines (ATMs) in banks are a total substitute for the traditional bank teller for many routine operations, but cost only a fraction of what a 

Economies of scale

Economies of scale Advances in communication technology have allowed service companies to reduce the number of locations for many types of activities. As an illustration, reservation operations for hotels, airlines, and car rental agencies have been consolidated to a few central locations. Economies of scale with these larger operations occur, in part, as a result of the ability to schedule a larger number of op

Increased Efficiency

Increased Efficiency A~ stated earlier. the unilateral  by services to nanotechnology was driven primarily by the need to reduce operating cost This is still a major reason for purchasing new technology. Just a capital equipment often is used to reduce covet in a manufacturing company. technology can he ~similarly apply~d in a service em environment. The two primary ways in which the efficiency or productivity o

Improved Performance

Improved Performance  Service managers also must recognize that the decision to adopt technology is often driven by the need to not only to increase productivity but also to improve the existing performance of their operations. (Improved performance. as defined earlier, includes faster speed of delivery, more product variety, and improved customer responsiveness, to name a few.) Often, however, with the proper

Strategic Planning

Strategic Planning Strategic planning, .from an operations perspective, is typically concerned with the long-range view of how an organization conducts business. As we have seen, strategic planning within the operations function of a manufacturing company is concerned with-addressing such issues as (a) where do we locate our facilities? (b) how big do we make them? (c) when do we build them? and (d) what proces

Integrating Technology into services

Integrating Technology into services Technology needs to be properly integrated into an organization in order to provide a competitive advantage, in terms of both increasing the efficiency of the operations as well as increasing effectiveness with respect to better serving its customers. We identify three areas where technology can significantly contribute to the success of an organization.

Increase in Disintermediation

Increase in Disintermediation Stan davis introduced disintermediation to mean the elimination of intermediate steps or organization allow buyers and sellers to come closer together, often dealing directly with each other without having to go through any intermediate organizations. For example, when travelers purchase airline tickets directly from the airlines through the Internet, they eliminate the need for a tra

Shift from Time-Dependent to Non- Time-Dependent Transactions

Shift from Time-Dependent to Non- Time-Dependent Transactions There is a growing trend away from time-dependent service transactions toward non-time-dependent transactions. Time-dependent transactions are those transactions that require a service worker to be available at that exact time when the customer requests the service. Examples of time-dependent service transactions can include the waitress at a restaur

Decrease in the Importance of Location

Decrease in the Importance of Location The combination of inexpensive data storage, transmission. and retrieval costs coupled with electronic access to virtually every corner of the world has decreased the importance of location for many services. Online banking services reduce the need for a customer to go to the bank. Home delivery services for groceries, dry cleaning, and so forth eliminate the need for custo


SELF-SERVE CHECKOUT COUNTERS INCREASE PRODUCTIVITY AND REDUCE WAITING TIMES. One of the most common complaints about shopping at supermarkets, according to Gary Rhodes of Kroger is the time it takes to check out. No one likes waiting in long checkout lines. The self-service units provide customers with a faster checkout alternative where hey can control _ how long the checkout process takes. As a result. -th