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Applying TOC to Services

R Raghavendra Ravi

2015

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Classifying Services

Service Factory:

 Airlines

 Hotels Resorts

Service Shop:

 Hospitals

 Auto Repairs Appliance Repairs

Mass Service:

 Retailing Commercial Banking 

Professional Service:

 Doctors / Surgeons Lawyers

 Architects

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Low Csto!i"ation # Low

La$or %ntensity& Service 'actory:

& Li!ited (ariety) %nfre*ent changes

& Co!petitive advantage + ,rice) Speed) ,ersonalToch

& Capacity -ecisions) .anaging -e!and ,ea/s and pro!oting off pea/s) On ti!e delivery + !ain

challenges& Typical ierarchical strctres # ,OL%C

COSTRA%TS3

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Service factory

igh csto!i"ation # Low la$or

intensity& %nventory + nsed roo!) nsed capacity3

,S%CAL

& Throghpt + Revene& Operating e4pense + sa!e as !fg3

& Si!ilar to T configration + so!e part of

the service is prepared6 7 so!ecsto!i"ation in the end3

& Apply -8R 9 do not !isallocate resorces

i

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.ass Service

low csto!er interaction ; high

la$or intensity& Li!ited service !i4 + eg3 Retail $an/ing)

retailing etc3

& Service process rigid + tied to e*ip!ent

& Co!petitive adv $ased on price 7 choices

& .anage!ent challenges + schedling

wor/force) rigid hierarchy with standard op3

 procedre3

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.ass Service

& As per TOC + here we shold loo/ at wage

cost as op3 e4pense33 This allows the co3 to

loo/ at tre !arginal cost33 Leading toco!petitive pricing3

& Constraint is typically ,S%CAL3

& S$ordinate every$ody

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,rofessional Service

igh csto!i"ation # igh

La$or intensity& -octor) Lawyer33

& 8asis of service + ,rof s/ills of a few

 people3

& 8=T high s/illed people also end p doing

low s/illed activities6 + eg doctor

!easres $lood pressre>

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,rofessional Services

& Recogni"e s/illed person as constraint and

re!ove all low s/illed ?o$s $y $ringing in

low s/illed talent to ta/e over low s/illed ?o$s + eg Arvind eye ospital

& S$ordinate every one else

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,rofessional service

& -8R and $ffer !anage!ent

& Schedle doctor with e*al ti!e slots 9even

thogh ti!e re*ired will vary33 eep a

 $ffer of patients3 %f there are hge delays +

call and reschedle patients3

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 ow

& ,lease see the last page in the last article@

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igh Csto!i"ation) Low la$or

intensity 9s/ill levels& igh (ariety ; .i4

& Ti!e re*ired varies +eg3 Ti!e re*ired for

dressing a patient with $andage can vary fro! one patient to another to a LARB e4tent3

& Apply -8R + schedle OL the Constraint33

This $rings in fle4i$ility and i!proves throghpt3

9 %n !any cases we need to design the

Constraint633 %3e3 decide which will $e the

constraint and where will it $e