What does differentiate service systems from traditional subjects of systems engineering such as manufacturing, and software? We address this issue by defining customer-intensive systems, based on ideas by Sampson [12], and show how customer-intensive systems encompass almost all service systems. After proposing a new form of visualization for customer-intensive processes and discussing its merits and shortcomings, we argue how in customer-intensive systems the presence of human beings and organizations inside the production process radically modifies fundamental tenants of systems engineering. We then describe four fundamental changes in traditional science and engineering system methodologies to adapt them to the realities of customerintensive systems. We conclude by arguing whether the complexity often observed in service systems is, in fact, a reflection of the complexity of human beings and organizations that are input to them.

The theme that sustaining efforts to change is difficult appears in many guises throughout the organizations. The tendency for change processes to run out of energy and momentum is widely recognized. In this essay, I offer an inductive study of the dynamics of organizational change that describes situated human interactions to explain the observed trajectory of organizational behavior. As a window through which to view change, I study a manufacturer adopting production practices based on concepts of lean manufacturing and the so-called Toyota Production System (TPS). I develop a grounded theory based on extensive fieldwork observing a change effort that began with temporary improvement but subsequently entered a phase of decline, the characteristic start and fizzle of change. I examine how the actions of various groups interact with each other and with characteristics of the workplace. I then induce a model that characterizes the dynamics of participatory change. The model draws on a close examination of how people do the work of process improvement to identify a set of mechanisms through which process and content interact to constitute the patterns of organizing that result. I find that frontline participation led workers to generate ideas, but the work of implementing those ideas placed

We investigate the dynamic behavior of service-oriented supply chains by developing a two-stage serial capacity management model. Reflecting the reality of many service (and custom manufacturing) supply chains, each stage holds no finished goods inventory, but rather only backlogs that can be managed solely by adjusting capacity. Using control theory, we develop an optimal policy that trades off backlog costs against capacity adjustment costs when information is shared. We then establish the potential for an increase in demand variability along an optimally managed supply chain. Contrary to conventional wisdom, we also show that, while lead-time reduction does generally reduce backlog variance, it also increases capacity variance, resulting in a trade-off between service quality and personnel costs at each stage. Furthermore, such lead-time reductions increase backlog variances at subsequent stages resulting in a service quality trade-off between stages. Finally, we show that sharing backlog information will not materially improve overall supply chain performance if the target lead- and capacity adjustment times of the stage closest to end-customer demand are much smaller than subsequent stages’. Revised For Management Science This is a draft. Please do not quote without the permission of the authors. Comments are welcome. 1

Abstract: We explore the conditions under which service competition leads to customer defection from an incumbent and which customers are most vulnerable to its effects. We find that customers defect at a higher rate from the incumbent following increased service competition only when the incumbent offers high quality service relative to existing competitors in a local market. We provide evidence that this result is due to a sorting effect, whereby the incumbent attracts service (price) sensitive customers in markets where it has supplied relatively high (low) levels of service quality in the past. Furthermore, we show that it is the high quality incumbent’s most valuable customers, those with the longest tenure, most products, and highest balances, who are the most vulnerable to superior service alternatives. Along the way, we also show that firms trade-off price and service quality and that when the incumbent offers relatively low service quality in a local market, it is susceptible to the entry or expansion of inferior service (price) competitors. Our results appear to have long run implications, whereby sustaining a high level of service quality relative to local competitors leads the incumbent to attract and retain higher value customers over time. 1.

We study the impact of physician workload on hospital reimbursement utilizing a detailed data set from the trauma department of a major urban hospital. We find that the proportion of patients assigned a “highseverity” status for reimbursement purposes, which maps, on average, to a 47.8 % higher payment for the hospital, is substantially reduced as the workload of the discharging physician increases. This effect persists after we control for a number of systematic differences in patient characteristics, condition and time of discharge. Furthermore, we show that it is unlikely to be caused by selection bias or endogeneity in either discharge timing or allocation of discharges to physicians. We attribute this phenomenon to a workloadinduced reduction in diligence of paperwork execution. We estimate the associated monetary loss to be approximately 1.1 % (95 % Confidence Interval 0.4 % − 1.9%) of the department’s annual revenue. Key words: empirical; hospital operations; healthcare reimbursement; workload management

Today, practitioners often have to face a number of challenges during the standardization of business processes, and some processes can be standardized easier (with less effort) than others. Our previous research has shown that major drivers of successful business process standardization are the characteristics respectively the complexity of a particular business process. In order to minimize standardization effort, we need an instrument that allows identifying processes which are appropriate for standardization by assessing each process ’ individual degree of complexity. On the way towards such an instrument, the first step is to develop an understanding of how the complexity of a business process affects its standardization. Therefore, the main aim of this paper is twofold: First, we provide a research model representing the fundamental relationships between our main constructs standardization effort, process complexity, and process standardization. Second, we report on the development of valid measurement scales designed to measure these constructs.

The emerging service-dominant logic requires cooperation between several partners in a value-added network or value chain. Information asymmetry and information gaps may lead to uncovered and unused knowledge. This paper addresses how this problem can be solved by suggesting an approach based on contingency theory. The core idea consists of supporting and improving value-added partnerships by enhancing information processing capacities of all partner organisations and information flows within the whole service network. We introduce a solution that consists of a mobile, Internet-based application system. The system allows partners in the value chain to access the most current service information at any time and at any place. The feasibility of the approach is demonstrated in a first application scenario and evaluated using laboratory experiments with domain experts. The results show that service processes are being executed with significantly more success if they are supported by the application system.