Need to Develop Best Practices for Business Related Services (BRS)

Manufacturing organizations seek to effectively integrate diverse service participants and their resources into a synthesized activity and also to make use of available assets efficiently. In pursuit of these goals companies follow a common strategy of implementing what are called “Best Practices” in the supply chains. Our aim is to examine if the best practices proposed for the manufacturing sector serve to bring about a significant improvements in the service sector. With this objective, we first review some typical interaction characteristics of services and manufacturing functions in detail. Interaction characteristics are heavily influenced by four basic characteristics of services: intangibility, perishability, simultaneity and heterogeneity. Interaction analysis helps us to group these interaction characteristics under major groups. They are 1) Planning 2) Capacity management 3) Flexibility Management 4) Execution 5) Measurement Model 6) Decision Making 7) Transparency. Further we review best practices that have been proposed for the manufacturing sector and their feasibility for considered domain of BRS. 1 Manufacturing Supply Chain increasingly Outsource Services As Manufacturing Supply Chain today strives to achieve minimum operating costs and lean operations, many in-house services have become potential targets for outsourcing [1]. Manufacturing organizations increasingly consider the option of outsourcing an important process associated with the goods they bring to the market to specialized service providers [2]. A recent global survey conducted by the Economist Intelligence Unit (EIU), found that a full 80 percent of respondents in the industries currently engage in some form of outsourcing [3]. Earlier outsourcing was confined to non-strategic business activities such as cleaning, transport or legal services, but now outsourcing is also predominant in business functions that are closer to the core. The past two decades have seen a growing trend towards the outsourcing of Business Related Services (BRS) such as R&D, Maintenance, 476 Amit Garg and Gerhard Gudergaan Financing & Logistics [4]. Various services, as shown in Figure 1, are contracted out to specialized service providers to achieve lower cost and higher quality. Fig. 1. Outsourcing of Business Related Services by Manufacturing The relationship between services, particularly the BRS and the manufacturing is no more a substitutive relationship but rather it has become very complementary to each other [5]. The biggest challenge to manage complementary dependency is to enhance the use of standards, best practices, and common measure of performances as well as to ensure high visibility amongst all. The aim of this article is to examine if the best practices documented extensively in SCM literature are applicable to the service sector. 2 Methodology Proposed Our aim is to examine if the best practices proposed for the manufacturing sector serve to bring about significant improvements in the service sector. With this end in view, the approach we adopt is outlined as follows: We first review some typical characteristics of services in detail. These typical characteristics have been well documented in literature. Based on these characteristics, we outline metrics in the service sector which are useful to measure the performance of a given service. Our next step is to review best practices that have been proposed for the manufacturing sector. The crucial step in our work is the matching of these two areas: the performance metrics of the services on one hand and the best practices in manufacturing on the other. We plot these two aspects on two axes, to evaluate if the best practices result in an improvement on the performance metrics. Two tools: the matching chart and the cluster relationship diagram are used for this purpose. We base our conclusions on the results from these two methodologies. Call Center