Monthly Archives: November 2020

Lean Process Improvement – A Means for Service Companies to Increase Productivity and Responsiveness

Lean has brought about amazing changes on the factory floor. Many U.S. firms recognize that in today’s markets, the speed of response to customer demands is a key competitive advantage. These firms have worked continuously to reduce their manufacturing cycle times. By applying lean concepts, companies have transformed the factory and made considerable reductions in manufacturing throughput times; reductions in cycle time in excess of 50 percent are not uncommon.

The principles of Lean Process Improvement can be applied to service processes as well as manufacturing processes. By rethinking and streamlining service processes, some companies have cut expenses by 10 to 30 percent and made steep improvements in internal and external customer satisfaction.

With a few exceptions, companies have been slow to apply lean process improvement principles to service processes such as finance, human resources, accounting, health care and customer service. The problem stems from waste being invisible in service processes. Unlike on the factory floor, where idle workers and stacks of inventory are clear signs of broken processes, waste is usually hidden when it comes to services. It tends to lie in wait between functions and departments, so companies only see a small portion of the problem.

Service processes usually lack standardization. Every employee may have a different method for completing the same task. This lack of standardization and consistency is costly. Complex, inefficient processes are slower, have higher error rates and decrease overall responsiveness and customer satisfaction. There is also a human cost when employees are underutilized by spending their time on low value tasks, they have less time for more rewarding – higher value-added tasks.

Identifying the Problems

Service providers need to embrace the end-to-end process philosophy

Adopting this philosophy is critical to seeing and eliminating waste. Process waste in the form of excess steps, redundant activities, and non-value-added tasks cannot be pigeon-holed. Inefficiency in one part of the process spill over into other activities and other processes.

Inconsistency is a problem for many service processes

For example, during an assessment of a prospective client we observed that each customer service representative (CSR) in the same transaction center handled identical customer lab requests differently. The processing times for each CSR was highly variable as much as 50% difference between CSRs. Further analysis revealed that some CSRs were using short cut methods that decreased their cycle times. The company did not engage in cross-training or knowledge sharing that would improve the overall process and reduce the time in handling lab requests.

Another typical observation of service processes reveal the Pareto principle effect:

A small proportion of the work eats up a large percentage of the total time. A brief sampling of the transaction center processing time for lab requests indicated that approximately 80% of the transactions took about 40% of the total time, the remaining 20%, the more complex ones, accounted for about 60% of the total time. Exceptions like these are an enormous burden on productivity and are typical for most service processes.

Many service organizations are lack the ability or to analyze the workarounds, exceptions, and rework that effect productivity:

In the factory, targets for output and capacity utilization are established and measured, but most service businesses are unable to measure these performance metrics.

In manufacturing, the customer doesn’t see or care about the production process itself, if the product is of acceptable quality and delivered on time. But in health care, banking, insurance, and other service industries the customer is the product moving through the process-and experiencing first-hand the frustration of inefficiency, Satisfaction is crucial, whether the customer is internal or external. Poor satisfaction is costly when it prompts the customers to take their business to a competitor.

Overcoming the Challenges of Lean Service

Making services lean has its challenges. It requires creative thinking in adapting the lean methods to a service environment. To be successful implementing Lean Process Improvement in the service industry requires rethinking of how work is currently done. Being successful in your lean service initiative require the following six components.

Select and map your cross-functional processes

Most processes typically cross functions and departments, not many people involved with them have a complete picture of the end-to-end workflow, interdependencies, and the hidden interfaces. This usually result in costly inefficiencies and high error rates. Before a service process can be improved, its steps must be transparent. A detailed analysis of the process and its subprocesses often reveals inefficiencies, workarounds, and complexity, as well as major performance improvement opportunities. Look for non-valued added steps and analyze information flows to identify silos and constraints.

Reduce complexity whenever possible

Complexity is a major contributor to process inefficiency. Rethink and redesign the process to eliminate elements that sap efficiency. Establish a subroutine for handling exceptions. This allows employees to work more quickly and productively with fewer interruptions.

Define and standardize the work

Focus on reducing variation and increasing knowledge of the process by gathering the input of the people doing the work to arrive at the best-known way to do the work. Once the best-known way is determined, document the methods so that the process steps are repeatable.

Exploit the power of big data

Dramatic advances in computing power and processing speed allow companies to gather large amounts of data and perform data analytics to minimize waste, reduce costs, and improve overall process performance.

Establish and track performance metrics

Establish a set of measures. These measures will help continuously monitor how well the process is performing to customer requirements and provide data that will help you identify and solve process problems.

Cross-train to increase productivity

In some service processes the workload is uneven at different times of the day leading to periods of high activity mixed with periods of downtime. Cross training employees to step in to assist in areas with high workloads can increase productivity and customer satisfaction while reducing these periods of uncontrolled activity.

Implementing lean process improvement in service processes requires continued commitment from the top, but lean is driven from the bottom-up. In other words, service workers are the best source of customer insight and process improvement, so it is important to involve them at the outset of the lean initiative.

For the last 50 years manufacturers have used lean tools to improve productivity, eliminate waste and improve efficiency. The same lean tools can be applied to the service industry, where inconsistency and a lack of standardization increases errors, slow response times and hurt customer satisfaction. By embracing the six components described above, service companies can increase productivity and customer responsiveness.

How To Start A Service Business

Setting Up A Service Based Business For Beginners

Although there are exceptions where both entities are entwined into one, most basics of the business is built around one unifying category so that the intentions and goals are clearly and visibly set.

This distinction allows the individual to then decide of the accompanying tools that should be chosen for the purpose of enhancing the business experience and also to contribute positively to the ease of running the business entity.

Most service based forays are labor intensive which the business entity revolves around. This is either packaged as the selling of expertise in a particular field or the selling of the actual “engines” that produce the desired outcome that bring in the revenue.

Either way the quality, efficiency, attention and detail that is exercised within the business are the eventual elements that are going to make or break the business foray into the revenue churning mechanism.

Basically offering the time frame required to create a particular service or to provide the content of the project itself is how the cost factor is calculated and the profits are gained in the service based business.

Therefore, the individual would have to factor in the cost of business entity by the labor intensive tool it provides, in order to provide a suitable base line for the eventual calculation of the profits and the pricing suitable to be demanded.

Alternatively the value of the service based business can be calculated on the value of the service being provided in a consultancy capacity which is evaluated against the insights the said service will bring to the company with the intention of creating a system thereby the said company is able to save or be more cost effective.

Being able to identify a suitable and good service based company is very important if the new business or existing business owner intends to hire its services to help enhance the site’s potential.

Identifying the characteristics of a particular service based company and matching them to the needs of the site in question will allow the business owner is make an informed decision of the merits of the chosen service.

Do Your Research First-

Customer perception of a company is very important to the progress and eventual success of any business endeavor, therefore it is very important to be able to identify the appropriate service based one to best suit the individual’s needs.

Being able to provide good service should always be the prime concern of any business entity especially if its revenue earning power depends on this one factor.

Market research is often the best way to identify the companies that have good track records and are capable of delivering what they promise.

This information can easily be sourced over the internet as these companies will be active in presenting their achievements for all interested parties to view.

It is also an excellent platform for potential clients and competitors alike to note the merits of the presenting service based company.

Being well-placed on the search engine rankings will allow the service based company to be more visible and thus make it easier to garner the intended customer base to ensure its consistent success.

The features of a good service based company would have to include the value added by the business entity from the input stage to the output stage where the results are then measured by its success rates.

These input stages are often regarded as the commodity phase and the processes that it is designed around have to ensure the successful output stage which is where the end desired results are more than adequately met.

Making a sale or pushing a business proposition is never an easy task to accomplish for some, therefore having the relevant assisting tools at hand should provide the individual with some encouragement to see the process to success.

Marketing Skills-

The following are some tools that can prove to be of great assistance to any individual intending to beef up their marketing skills:

Making use of as many online tools as possible to promote the business or product intended is one way to start the enhancement of the marketing skills venture.

Using blogs to create the interest and visibility for the item is something that should be considered as this is one way to get the attention of the target audience without much cost incurred.

Working together with others is another way to beef up an individual’s marketing skills. Being part of a team effort where the individual’s talents and contributions are noticed and acknowledged is definitely an encouraging factor and helps the individual to be more adventurous and keen on honing his or her skills further.

Availing one’s self to be listed on freelance job sites is also another way of beefing up the marketing skill of an individual. The fact that the visibility factor the site can bring to the individual will help the person focus more on ensuring the eventual connections made are optimized and locked in at the earliest opportunity.

Social websites are also a good platform to introduce one’s marketing skills to the masses.

Because of the competitiveness of all the participants in this particular platform the individual will subconsciously be forced to step out and ensure his or her participation leaves a positive impact on the interactions.

Showcasing all the positive skill of the marketing process will eventually earn the respect and attention of others looking for such services.

Create Your Website-

Creating a website can be a challenging feat for those not very internet savvy, however it is not altogether a task that is formidable in nature. With a little startup knowledge and tips anyone can successfully attempt to put together their own website.

The following are some guidelines that will help ease the process:

Registering the suitable domain name is the first step to take when designing a website.

The choice of this domain name should ideally take into consideration the relevance the name has to the intended site, an easy to remember reference, one that is short yet descriptive and whether it has the right extensions tagged to it such,.com,.org.

The next step would be to set up a web host account and this would entail the picking one that can provide the services the individual would need for the website.

Although cost is always a factor for every business endeavor, it would be advisable to avoid using the cheaper and inexperienced ones available as this might end up costing the individual in the future.

The follow up step would be to point the domain to the web host in place.

This is a fairly simple exercise, however if the individual faces any potential problems along the way there are always assisting platforms to tap into to get the relevant help or explanations.

Getting a word press linked to the site is another important step to incorporate into the setup. This word press is a free platform that is used by bloggers and allows the individual to build the website with the minimum of effort while making it user-friendly always.

Last but by no means the least, would be for the individual to organize the website.

This process would involve the backtracking exercise to ensure there are no defaults that would cause the viewer to be put off when visiting the site.

Learning to build websites isn’t the complex technical process a lot of people think it is. All you really need to do is come to our website and get access to 300+ Tutorials that show you step by step how to build a website, and so much more, and start playing around with building your own websites.

Advertising Ideas-

In order to stay competitive it is necessary to always be able to have fresh views and ideas to present to potential customers and target audiences. Without such innovations the website will become stagnant and outdated thus eventually causing the original high volume of traffic flow to thin out. Brainstorming is one way of gathering and creating new ideas that would benefit any endeavor.

Some of the ways that can be adopted to bring forth interesting and innovative ideas at the brainstorming sessions are facilitated by encouraging the participants to simulate the mindset of the customer or the intended target audience.

By doing this the participant are more likely to anticipate the needs and wants of the customers and target audience and design any changes to fit into this discovery.

Bringing people together to discuss ideas at the same time and in the same place is also another good advantage the brainstorming sessions can facilitate.

Advertising ideas and campaigns can be discussed in “real time” as opposed to having emails flying about which is less effective and time-consuming and even confusing at times.

Brainstorming for advertising purposes, should ideally take into account the following points:

Problem definition and identification should be done at the very onset of the exercise. With this clearly outlined, other factors can then be worked on in line with the initial problem discovery information.

Custom designing can also be worked on within the brainstorming session, as the collaboration of views can contribute to finding the one idea that is going to eventually used to build the campaign around.

Customer Service-

Making a sale is only the first step is the relationship building exercise, which will eventually contribute to either the success or failure of any business endeavor. Therefore, it is important to pay attention to the customer service offered to cement the success rate desired.

The following are some tips as to how to stay on top of the customer service exercise:

Taking the customer for granted is the first and most common mistake most businesses make. This is especially evident when the business has expanded to now successful and comfortable levels. Often forgotten is the customers that brought the business to such heights in the first place.

Therefore, it is very important to keep in touch with the customers so that vital information can be obtained about the current needs and wants of the customer.

In the quest to stay informed and provide optimum customer service another point to consider and exercise is the importance of being fresh and innovative with ideas that are going to keep the customer coming back for more.

When boredom sets in the customer will usually simply look elsewhere for the next new exciting thing that attracts their attention.

Therefore, in order to induce customer loyalty innovative ideas should be a constant feature within the business.

Happy Customers Are Loyal Customers-

Training staff to treat each customer with respect and individuality is well worth the effort. Sometimes this positive treatment is the defining factor that keeps the customer coming back, even if the products are not exactly the best in the market.

Having the protocols in place for quick and efficient responses to a customer’s queries or grievances, is one way of ensuring the individual stays a loyal customer and does not spread negativity about the business or product. Happy customers are loyal customers.

In most cases it is rather difficult to specifically categorize businesses into specific service based styles. This is mainly because a lot of businesses tend to incorporate different platforms and strategies into the actual blueprint of the business format.

However, there are some that can be clearly defined as service based business companies and the following are some of these examples:

Types Of Service Based Business-

Such service companies may include the likes of services provided by doctors, accounts, architects, actuaries, lawyers and other related fields.

On a more creative side one may include the likes of services provided for by fabric designers, fashion designers, color scheme artists and many more as the list of such endeavors can be quite overwhelming.

Most service type companies rarely have appreciable inventory as the purchases for usually made with the objective of facilitating a job thus the need to carry any inventory would not be necessary.

Merchandising companies can also be considered service style enterprises as they to provide a service of sort to the customer base.

However, this service is based solely on providing tangible elements rather than just the action of extending physical service. The generation of revenue is from the actual sale of the inventory rather than from the service extended.

Manufacturing companies also come under the category of providing a service to the industry and the customer needs. In this scenario the products or items are made and sold within the company’s business entity thus ensuring monetary gains are derived both from the product and the service offered by manufacturing the product.

All these different types of basic service providing entities are all in place with one goal in mind and that is to create the platform for revenue earning potential. Therefore, in order to understand and identify which would be best suited for the individual business owner, more research should be done to find the style that best suits the individual’s needs.

OK, so I hope this article gives those looking to start their own online service based business a better understanding on what it takes to set up and grow a successful online serviced based business.

To your great success on your online business journey, Bob

Advantages of Private Ambulance Services Over Public Ambulance Services

Ambulances are vehicles used for providing emergency or non-emergency transport to a patient outside the hospital or any other medical facility. They carry medical personnel, including paramedics and medical technicians to the required site. They give immediate medical aid and close monitoring of patients on their way to the nearby hospital or emergency room. They also transport patients who are not in the condition of traveling by means of normal vehicles. They have flashing bulbs and sirens which separate them from other vehicles and aid them to reach on their destination in a matter of minutes. The ambulance services are divided into two categories; public services and private services.

Public services– Public services are operated by the state. The fund comes partly from your pocket and partly from the taxpayers. Every area has its own public services and they seldom serve outside their domain. Moreover, the services and facilities provided by the public ambulances are limited and they have some definite terms of functioning. Though they cost a little less, their limitations sometimes require the need for private ambulance services.

Private services– The private ambulances are private organizations which work on a reservation basis. However, the complete cost of booking a private ambulance and providing the requisite facilities are charged by the patient (or whoever books them). Since they are independent bodies, the services they offer are quite flexible and often more convenient.

Advantages of private services over public services

There are many situations where private services are more preferable some of which are:

  • Public ambulance services can be available only in the case of emergency. So, in such cases where there is no real emergency and an ambulance is required for the convenience and comfort of the patient, a private ambulance service is necessary.
  • Public ambulances have their specific regions of serving and they can carry the patient to the nearest hospitals and they generally do not offer you any choice as to which hospital or clinic you want to go. So, if you are receiving your treatment from a much preferable hospital, which is out of the working area of the local ambulance services, then private ambulance services are your only option.
  • Sometimes, large companies or organizations want to keep an ambulance or a few for large events to give medical help for when an emergency condition arises. Of course, public ambulances can’t serve the purpose. Private ambulances, however, will be quite suitable and they can be booked in the desired number for the desired time.
  • Patients who are not in the condition of going to a medical facility themselves nor have anyone who can go with them and give the required support may need to call private ambulance services.

Cost of private ambulance services

The cost of private services can vary a lot on the type of services opted. More luxurious facilities will obviously cost you more money.

Why Web Services?

Component-based programming has become more popular than ever. Hardly an application is built today that does not involve leveraging components in some form, usually from different vendors. As applications have grown more sophisticated, the need to leverage components distributed on remote machines has also grown.

An example of a component-based application is an end-to-end e-commerce solution. An e-commerce application residing on a Web farm needs to submit orders to a back-end Enterprise Resource Planning (ERP) application. In many cases, the ERP application resides on different hardware and might run on a different operating system.

The Microsoft Distributed Component Object Model (DCOM), a distributed object infrastructure that allows an application to invoke Component Object Model (COM) components installed on another server, has been ported to a number of non-Windows platforms. But DCOM has never gained wide acceptance on these platforms, so it is rarely used to facilitate communication between Windows and non-Windows computers. ERP software vendors often create components for the Windows platform that communicate with the back-end system via a proprietary protocol.

Some services leveraged by an e-commerce application might not reside within the datacenter at all. For example, if the e-commerce application accepts credit card payment for goods purchased by the customer, it must elicit the services of the merchant bank to process the customer’s credit card information. But for all practical purposes, DCOM and related technologies such as CORBA and Java RMI are limited to applications and components installed within the corporate datacenter. Two primary reasons for this are that by default these technologies leverage proprietary protocols and these protocols are inherently connection oriented.

Clients communicating with the server over the Internet face numerous potential barriers to communicating with the server. Security-conscious network administrators around the world have implemented corporate routers and firewalls to disallow practically every type of communication over the Internet. It often takes an act of God to get a network administrator to open ports beyond the bare minimum.

If you’re lucky enough to get a network administrator to open up the appropriate ports to support your service, chances are your clients will not be as fortunate. As a result, proprietary protocols such those used by DCOM, CORBA, and Java RMI are not practical for Internet scenarios.

The other problem, as I said, with these technologies is that they are inherently connection oriented and therefore cannot handle network interruptions gracefully. Because the Internet is not under your direct control, you cannot make any assumptions about the quality or reliability of the connection. If a network interruption occurs, the next call the client makes to the server might fail.

The connection-oriented nature of these technologies also makes it challenging to build the load-balanced infrastructures necessary to achieve high scalability. Once the connection between the client and the server is severed, you cannot simply route the next request to another server.

Developers have tried to overcome these limitations by leveraging a model called stateless programming, but they have had limited success because the technologies are fairly heavy and make it expensive to reestablish a connection with a remote object.

Because the processing of a customer’s credit card is accomplished by a remote server on the Internet, DCOM is not ideal for facilitating communication between the e-commerce client and the credit card processing server. As in an ERP solution, a third-party component is often installed within the client’s datacenter (in this case, by the credit card processing solution provider). This component serves as little more than a proxy that facilitates communication between the e-commerce software and the merchant bank via a proprietary protocol.

Do you see a pattern here? Because of the limitations of existing technologies in facilitating communication between computer systems, software vendors have often resorted to building their own infrastructure. This means resources that could have been used to add improved functionality to the ERP system or the credit card processing system have instead been devoted to writing proprietary network protocols.

In an effort to better support such Internet scenarios, Microsoft initially adopted the strategy of augmenting its existing technologies, including COM Internet Services (CIS), which allows you to establish a DCOM connection between the client and the remote component over port 80. For various reasons, CIS was not widely accepted.

It became clear that a new approach was needed. So Microsoft decided to address the problem from the bottom up. Let’s look at some of the requirements the solution had to meet in order to succeed.

  • Interoperability The remote service must be able to be consumed by clients on other platforms.
  • Internet friendliness The solution should work well for supporting clients that access the remote service from the Internet.
  • Strongly typed interfaces There should be no ambiguity about the type of data sent to and received from a remote service. Furthermore, datatypes defined by the remote service should map reasonably well to datatypes defined by most procedural programming languages.
  • Ability to leverage existing Internet standards The implementation of the remote service should leverage existing Internet standards as much as possible and avoid reinventing solutions to problems that have already been solved. A solution built on widely adopted Internet standards can leverage existing toolsets and products created for the technology.
  • Support for any language The solution should not be tightly coupled to a particular programming language. Java RMI, for example, is tightly coupled to the Java language. It would be difficult to invoke functionality on a remote Java object from Visual Basic or Perl. A client should be able to implement a new Web service or use an existing Web service regardless of the programming language in which the client was written.
  • Support for any distributed component infrastructure The solution should not be tightly coupled to a particular component infrastructure. In fact, you shouldn’t be required to purchase, install, or maintain a distributed object infrastructure just to build a new remote service or consume an existing service. The underlying protocols should facilitate a base level of communication between existing distributed object infrastructures such as DCOM and CORBA.

Given the title of this book, it should come as no surprise that the solution Microsoft created is known as Web services. A Web service exposes an interface to invoke a particular activity on behalf of the client. A client can access the Web service through the use of Internet standards.

Web Services Building Blocks
The following graphic shows the core building blocks needed to facilitate remote communication between two applications.

Let’s discuss the purpose of each of these building blocks. Because many readers are familiar with DCOM, I will also mention the DCOM equivalent of each building block.

  • Discovery The client application that needs access to functionality exposed by a Web service needs a way to resolve the location of the remote service. This is accomplished through a process generally termed discovery. Discovery can be facilitated via a centralized directory as well as by more ad hoc methods. In DCOM, the Service Control Manager (SCM) provides discovery services.
  • Description Once the end point for a particular Web service has been resolved, the client needs sufficient information to properly interact with it. The description of a Web service encompasses structured metadata about the interface that is intended to be consumed by a client application as well as written documentation about the Web service including examples of use. A DCOM component exposes structured metadata about its interfaces via a type library (typelib). The metadata within a component’s typelib is stored in a proprietary binary format and is accessed via a proprietary application programming interface (API).
  • Message format In order to exchange data, a client and a server have to agree on a common way to encode and format the messages. A standard way of encoding data ensures that data encoded by the client will be properly interpreted by the server. In DCOM, messages sent between a client and a server are formatted as defined by the DCOM Object RPC (ORPC) protocol.

Without a standard way of formatting the messages, developing a toolset to abstract the developer from the underlying protocols is next to impossible. Creating an abstraction layer between the developer and the underlying protocols allows the developer to focus more on the business problem at hand and less on the infrastructure required to implement the solution.

  • Encoding The data transmitted between the client and the server needs to be encoded into the body of the message. DCOM uses a binary encoding scheme to serialize the data contained by the parameters exchanged between the client and the server.
  • Transport Once the message has been formatted and the data has been serialized into the body of the message, the message must be transferred between the client and the server over some transport protocol. DCOM supports a number of proprietary protocols bound to a number of network protocols such as TCP, SPX, NetBEUI, and NetBIOS over IPX.

Web Services Design Decisions

Let’s discuss some of the design decisions behind these building blocks for Web services.

Choosing Transport Protocols

The first step was to determine how the client and the server would communicate with each other. The client and the server can reside on the same LAN, but the client might potentially communicate with the server over the Internet. Therefore, the transport protocol must be equally suited to LAN environments and the Internet.

As I mentioned earlier, technologies such as DCOM, CORBA, and Java RMI are ill suited for supporting communication between the client and the server over the Internet. Protocols such as Hypertext Transfer Protocol (HTTP) and Simple Mail Transfer Protocol (SMTP) are proven Internet protocols. HTTP defines a request/response messaging pattern for submitting a request and getting an associated response. SMTP defines a routable messaging protocol for asynchronous communication. Let’s examine why HTTP and SMTP are well suited for the Internet.

HTTP-based Web applications are inherently stateless. They do not rely on a continuous connection between the client and the server. This makes HTTP an ideal protocol for high-availability configurations such as firewalls. If the server that handled the client’s original request becomes unavailable, subsequent requests can be automatically routed to another server without the client knowing or caring.

Almost all companies have an infrastructure in place that supports SMTP. SMTP is well suited for asynchronous communication. If service is disrupted, the e-mail infrastructure automatically handles retries. Unlike with HTTP, you can pass SMTP messages to a local mail server that will attempt to deliver the mail message on your behalf.

The other significant advantage of both HTTP and SMTP is their pervasiveness. Employees have come to rely on both e-mail and their Web browsers, and network administrators have a high comfort level supporting these services. Technologies such as network address translation (NAT) and proxy servers provide a way to access the Internet via HTTP from within otherwise isolated corporate LANs. Administrators will often expose an SMTP server that resides inside the firewall. Messages posted to this server will then be routed to their final destination via the Internet.

In the case of credit card processing software, an immediate response is needed from the merchant bank to determine whether the order should be submitted to the ERP system. HTTP, with its request/response message pattern, is well suited to this task.

Most ERP software packages are not capable of handling large volumes of orders that can potentially be driven from the e-commerce application. In addition, it is not imperative that the orders be submitted to the ERP system in real time. Therefore, SMTP can be leveraged to queue orders so that they can be processed serially by the ERP system.

If the ERP system supports distributed transactions, another option is to leverage Microsoft Message Queue Server (MSMQ). As long as the e-commerce application and the ERP system reside within the same LAN, connectivity via non-Internet protocols is less of an issue. The advantage MSMQ has over SMTP is that messages can be placed and removed from the queue within the scope of a transaction. If an attempt to process a message that was pulled off the queue fails, the message will automatically be placed back in the queue when the transaction aborts.

Choosing an Encoding Scheme

HTTP and SMTP provide a means of sending data between the client and the server. However, neither specifies how the data within the body of the message should be encoded. Microsoft needed a standard, platform-neutral way to encode data exchanged between the client and the server.

Because the goal was to leverage Internet-based protocols, Extensible Markup Language (XML) was the natural choice. XML offers many advantages, including cross-platform support, a common type system, and support for industry -standard character sets.

Binary encoding schemes such as those used by DCOM, CORBA, and Java RMI must address compatibility issues between different hardware platforms. For example, different hardware platforms have different internal binary representation of multi-byte numbers. Intel platforms order the bytes of a multi-byte number using the little endian convention; many RISC processors order the bytes of a multi-byte number using the big endian convention.

XML avoids binary encoding issues because it uses a text-based encoding scheme that leverages standard character sets. Also, some transport protocols, such as SMTP, can contain only text-based messages.

Binary methods of encoding, such as those used by DCOM and CORBA, are cumbersome and require a supporting infrastructure to abstract the developer from the details. XML is much lighter weight and easier to handle because it can be created and consumed using standard text-parsing techniques.

In addition, a variety of XML parsers are available to further simplify the creation and consumption of XML documents on practically every modern platform. XML is lightweight and has excellent tool support, so XML encoding allows incredible reach because practically any client on any platform can communicate with your Web service.

Choosing a Formatting Convention

It is often necessary to include additional metadata with the body of the message. For example, you might want to include information about the type of services that a Web service needs to provide in order to fulfill your request, such as enlisting in a transaction or routing information. XML provides no mechanism for differentiating the body of the message from its associated data.

Transport protocols such as HTTP provide an extensible mechanism for header data, but some data associated with the message might not be specific to the transport protocol. For example, the client might send a message that needs to be routed to multiple destinations, potentially over different transport protocols. If the routing information were placed into an HTTP header, it would have to be translated before being sent to the next intermediary over another transport protocol, such as SMTP. Because the routing information is specific to the message and not the transport protocol, it should be a part of the message.

Simple Object Access Protocol (SOAP) provides a protocol-agnostic means of associating header information with the body of the message. Every SOAP message must define an envelope. The envelope has a body that contains the payload of the message and a header that can contain metadata associated with the message.

SOAP imposes no restrictions on how the message body can be formatted. This is a potential concern because without a consistent way of encoding the data, it is difficult to develop a toolset that abstracts you from the underlying protocols. You might have to spend a fair amount of time getting up to speed on the Web service’s interface instead of solving the business problem at hand.

What was needed was a standard way of formatting a remote procedure call (RPC) message and encoding its list of parameters. This is exactly what Section 7 of the SOAP specification provides. It describes a standard naming convention and encoding style for procedure-oriented messages.

Because SOAP provides a standard format for serializing data into an XML message, platforms such as ASP.NET and Remoting can abstract away the details for you.

Choosing Description Mechanisms

SOAP provides a standard way of formatting messages exchanged between the Web service and the client. However, the client needs additional information in order to properly serialize the request and interpret the response. XML Schema provides a means of creating schemas that can be used to describe the contents of a message.

XML Schema provides a core set of built-in datatypes that can be used to describe the contents of a message. You can also create your own datatypes. For example, the merchant bank can create a complex datatype to describe the content and structure of the body of a message used to submit a credit card payment request.

A schema contains a set of datatype and element definitions. A Web service uses the schema not only to communicate the type of data that is expected to be within a message but also to validate incoming and outgoing messages.

A schema alone does not provide enough information to effectively describe a Web service, however. The schema does not describe the message patterns between the client and the server. For example, a client needs to know whether to expect a response when an order is posted to the ERP system. A client also needs to know over what transport protocol the Web service expects to receive requests. Finally, the client needs to know the address where the Web service can be reached.

This information is provided by a Web Services Description Language (WSDL) document. WSDL is an XML document that fully describes a particular Web service. Tools such as ASP.NET WSDL.exe and Remoting SOAPSUDS.exe can consume WSDL and automatically build proxies for the developer.

As with any component used to build software, a Web service should also be accompanied by written documentation for developers who program against the Web service. The documentation should describe what the Web service does, the interfaces it exposes, and some examples of how to use it. Good documentation is especially important if the Web service is exposed to clients over the Internet.

Choosing Discovery Mechanisms

Once you’ve developed and documented a Web service, how can potential clients locate it? If the Web service is designed to be consumed by a member of your development team, your approach can be pretty informal, such as sharing the URL of the WSDL document with your peer a couple of cubicles down. But when potential clients are on the Internet, advertising your Web service effectively is an entirely different story.

What’s needed is a common way to advertise Web services. Universal Description, Discovery, and Integration (UDDI) provides just such a mechanism. UDDI is an industry-standard centralized directory service that can be used to advertise and locate Web services. UDDI allows users to search for Web services using a host of search criteria, including company name, category, and type of Web service.

Web services can also be advertised via DISCO, a proprietary XML document format defined by Microsoft that allows Web sites to advertise the services they expose. DISCO defines a simple protocol for facilitating a hyperlink style for locating resources. The primary consumer of DISCO is Microsoft Visual Studio.NET. A developer can target a particular Web server and navigate through the various Web services exposed by the server.

What’s Missing from Web Services?

You might have noticed that some key items found within a distributed component infrastructure are not defined by Web services. Two of the more noticeable omissions are a well-defined API for creating and consuming Web services and a set of component services, such as support for distributed transactions. Let’s discuss each of these missing pieces.

  • Web service -specific API Most distributed component infrastructures define an API to perform such tasks as initializing the runtime, creating an instance of a component, and reflecting the metadata used to describe the component. Because most high-level programming languages provide some degree of interoperability with C, the API is usually exposed as a flat set of C method signatures. RMI goes so far as to tightly couple its API with a single high-level language, Java.

In an effort to ensure that Web services are programming language-agnostic, Microsoft has left it up to individual software vendors to bind support for Web services to a particular platform. I will discuss two Web service implementations for the.NET platform, ASP.NET and Remoting, later in the book.

  • Component services The Web services platform does not provide many of the services commonly found in distributed component infrastructures, such as remote object lifetime management, object pooling, and support for distributed transactions. These services are left up to the distributed component infrastructure to implement.

Some services, such as support for distributed transactions, can be introduced later as the technology matures. Others, such as object pooling and possibly object lifetime management, can be considered an implementation detail of the platform. For example, Remoting defines extensions to provide support for object lifetime management, and Microsoft Component Services provides support for object pooling.


Component-based programming has proven to be a boon to developer productivity, but some services cannot be encapsulated by a component that resides within the client’s datacenter. Legacy technologies such as DCOM, CORBA, and Java RMI are ill-suited to allowing clients to access services over the Internet, so Microsoft found it necessary to start from the bottom and build an industry-standard way of accessing remote services.

Web services is an umbrella term that describes a collection of industry- standard protocols and services used to facilitate a base-line level of interoperability between applications. The industry support that Web services has received is unprecedented. Never before have so many leading technology companies stepped up to support a standard that facilitates interoperability between applications, regardless of the platform on which they are run.

One of the contributing factors to the success of Web services is that they’re built on existing Internet standards such as XML and HTTP. As a result, any system capable of parsing text and communicating via a standard Internet transport protocol can communicate with a Web service. Companies can also leverage the investment they have already made in these technologies.

6 Questions You Should Ask Yourself Before Deciding Where To Get Your Car Serviced

1. Which are the services offered by the company?

Does the company provide 24/7 service access and, can, at any point in time can help you fix your car, arrange for free pick-up and drop?Does it live up to its promise of 100% transparency on the products and parts they use? A service provider that offers all the above, and does not cheat customers with any kind of false promises, while offering ease of payment, quick support, is the one you should be looking for. After-all, its services will help maximizing the lifespan value of your car.It is also preferable that the car service provider believes in innovation and constantly updates itself with new technology.

2. Does it have a loyal customer history?

Customer reviews and ratings given by the consumer care often a valuable and trustworthy source of information and should play a role in your decision-making process.Also, it is advisable to keep an eye out for other reports or statistics of the company, in understanding and identifying the scope and value of its services.Today, most people feel it is okay to pay a premium over and above the usual price, as long as they get quality services worth their money.But it is important to also get the appropriate advice on such add-on services, which truly add value to your vehicle, and not just bill you extra for the sake of it. It is strongly recommended that you choose solid, reputable companies that can provide a ready explanation of their billing figures rather than just go for a company that charges high prices for its services. Remember, costlier does not necessarily mean better.

3. If the company has specialisation in the field?

It is important to find out whether the company has certification/s in the fields of service they provide their consumers with. These are often a safe way to establish the company’s credentials and whether or not, it is capable of delivering on its promise.

4. Do they provide original company parts replacement?

In today’s world, it is very easy to fool the people with the duplicate parts and equipment, so be very careful of the parts that will be installed in your car. Make sure the parts used are authorised, in the terms of warranty &guarantee, the authenticity of the company manufacturing them, being a part of the service process, among other things. Remember, you may not be an expert, but your involvement will ensure you get what you pay for., and the final decision rests with you.

5. Is the customer service centre consumer friendly and have trained workers?

You should never be left in the dark about the process and the conversations around it. It is your absolute right to understand the nature of service undertaken and the service company that breaks it down for you in easy terms, instead of confusing you with jargon, is the ideal choice. Also, a company’s staff and personnel are more often than not a reflection of how the organisation functions. So it would be wise to choose a service provider, whose personnel are trained and consumer-friendly.

6. How to tackle the confusion of competition in the market and which one to trust the most?

The competition in the car service market often makes it difficult for you to select one company over the other. The lack of knowledge in the technology being used for car servicing shouldn’t be a reason for you to be fooled by the car service company. It is advised that you make appropriate enquiries about the process and the products used for the service, rather than paying off the bills blindly.

Before finalising your service provider, always ask yourself these basic questions listed here.

Quality of Service Methods for IP Networks


This article provides an analysis of the methods and protocols used to improve the Quality of Service (QoS) in Internet Protocol (IP) networks. The challenges of achieving a high level of QoS in IP networks are examined. The traditional methods for QoS are presented along with current and proposed methods for QoS in IP networks. The goal of the article is to educate the reader on the various methods of achieving QoS and to examine the best options for the future. As Internet bandwidth requirements grow and high quality IP applications such as real-time video and Voice over IP (VoIP) become widespread, QoS will be critical to the success of providing high quality Internet Protocol (IP) services.

Quality of Service

The Internet Engineering Task Force (IETF) defines Quality of Service (QoS) as a service agreement (or a guarantee) to provide a set of measurable networking service attributes, including end to end delay, delay variation (jitter), and available bandwidth. The International Telecommunication Union (ITU) defines QoS as the collective effect of service performance which determines the degree of customer satisfaction. Cisco defines QoS as the capacity of a network to provide better service to selected network traffic.

This article defines QoS as the capability of an IP network to classify and prioritize traffic flows in order to ensure that the technical characteristics of packet loss, delay, error rate and jitter are met for each customer. Quality of Service (QoS) methods are based on the ability of an IP network to identify and classify traffic that is higher priority so that the technical requirements of the customer are met. QoS methods are based on having an adequate amount of bandwidth (i.e. low network utilization) to prevent traffic congestion and to permit the setup of priority traffic flows.

Traditional QoS Methods for IP Networks

In the early days of the Internet, the applications were low bandwidth and not real-time in nature, so a high quality of service was easy to maintain. The early Internet applications of email, File Transfer Protocol (FTP) and web browsing were low-speed bursty IP traffic so delay, latency and bit error rates were not critical. The early networks relied on the Transmission Control Protocol (TCP) to provide flow control, error checks and retransmission of data packets when necessary. TCP provides a best-effort level of QoS that is acceptable for email and web browsing. However, the TCP protocol alone will not provide an acceptable level of QoS for real-time high bandwidth applications such as video or VoIP. Another method used to improve the QoS in early TCP/IP networks was the First-In First-Out (FIFO) buffer. FIFO buffers provided a simple method to store packets when there was temporary network congestion, but FIFO buffers make no intelligent decision about the priority of traffic. This section will examine some of the traditional methods of QoS to include the Transmission Control Protocol (TCP), IP Routing Protocols, First-In First-Out (FIFO) buffers, the Real Time Protocol (RTP) and the Explicit Congestion Notification (ECN) protocol.

Transmission Control Protocol (TCP). The Transmission Control Protocol (TCP) is one of the most common protocols used in the Internet. Although it is not traditionally considered a QoS protocol, TCP can provide adequate QoS for best-effort Internet applications such as email and web browsing. The Transmission Control Protocol (TCP) is a connection oriented protocol that provides reliable data transport between host computers. The term connection-oriented means the two host computers using TCP must establish a connection with each other before they exchange data. TCP includes flow-control to control the transmission of data so that the receiver can limit how much data the sender transmits. TCP uses a sliding window protocol for flow control. TCP uses the sequence, acknowledge and window fields in the header for flow control. The window field identifies the number of bytes that can be sent without acknowledgements. The window size will slide up and down based on performance of the connection.

First-In, First-Out (FIFO) Buffers. FIFO buffers provide temporary queuing of data when there is network congestion. The shortcoming of FIFO queuing is that no intelligent decision is made on the priority of traffic. FIFO is still used in many networking devices, but is now considered a non-QoS method because FIFO is unable to meet the QoS standards of today’s IP networks.

Explicit Congestion Notification (ECN). The ECN protocol provides advance warning of network congestion so the routers can mark data packets being transmitted. With ECN, a bit is placed in the IP header to signal the transmitter that the network is congested. ECN will set a flag notifying the sender to decrease the window size to avoid having to retransmit packets. ECN is also not a true QoS protocol and is incapable of reserving resources or guaranteeing services.

Quality of Service Methods in IP Networks

Quality of Service Levels. The service levels of QoS refer to the actual capabilities of the network to provide end to end service. There are three levels of QoS for IP networks:

1. Best Effort Service. This level of service provides no guarantees of service and relies on basic TCP and FIFO functions to transmit data across the network.

2. Differentiated Service. This level prioritizes traffic and provides a statistical preference for higher priority traffic, but not a hard guarantee of service. Priority Queuing (PQ) is an example of differentiated service.

3. Guaranteed Service. This is the best level of QoS and provides a reservation of network resources for high priority traffic. The RSVP protocol is an example.

Classification of IP Traffic. To provide a high priority service for a type of data traffic, the data must first be identified and classified for service. If the data is marked, then IP precedence throughout the network can be used to provide a higher level of service. For data that is identified, but not marked, classification is on a ‘per-hop’ basis. On a per-hop basis means that classification of the data only pertains to a single device that uses a QoS method such as priority queuing.

Access Control Lists (ACL). Access control lists are used in IP networks to identify traffic for congestion management methods such as policy based routing. The ACL is a list of permissions on a router that determine the actions that the device will take with a given traffic flow.

Policy Based Routing (PBR). Policy Based Routing permits the classification of traffic based on extended access control lists and set IP precedence bits. PBR uses route-maps within a network to route traffic based on established policies. PBR can direct packets to take a different path than derived from routing protocols.

Committed Access Rate (CAR). CAR is a method to classify traffic and set policies for handling traffic that exceeds a bandwidth allocation. If a traffic flow exceeds an established bandwidth on a device port, it can be either dropped, passed or have its IP precedence changed based on established policies.

IP Precedence. IP precedence takes advantage of the three precedence bits in the IPv4 header’s Type of Service (TOS) field to specify a class of service for each packet and provide a differentiated level of QoS. RFC 2475 extends the number of bits used in the TOS field from 3 to 6 and is known as DiffServ.

Priority Queuing (PQ). PQ provides a higher priority to important traffic so that it is handled first at each device in the network. Packets are given one of four levels of classification by the application. PQ is useful at prioritizing certain types of traffic, but PQ uses static routing and is unable to adapt to network changes.

Custom Queuing (CQ). CQ provides a guaranteed bandwidth for a higher priority data flow and is used in situations where network congestion or potential latency must be avoided by high priority traffic. Like PQ, CQ uses static routes and will not dynamically adapt to the network.

Flow-based Weighted Fair Queuing (WFQ). WFQ uses a flow-based queuing algorithm to ensure that all data is serviced fairly and predictably without wasting bandwidth on reservations. WFQ uses IP precedence for classification of traffic to provide superior service to high priority flows. The advantage of WFQ over PQ and CQ is that WFQ can automatically adapt to changing traffic conditions. WFQ is the default queuing mode for Cisco routers on low speed serial ports.

Real Time Protocol (RTP). The Real Time Transport Protocol (RTP) is a layer 4 transport protocol that can be used with either TCP or the User Datagram Protocol (UDP) to improve the quality of service. RTP is frequently used with UDP in voice over IP (VoIP) networks because it provides a sequence number for packets, allows applications to detect packet loss, and provides a time-stamp so delay and jitter can be monitored. RTP does not address resource reservation and does not guarantee quality-of-service for real-time services. The RTP data transport is normally used with a companion control protocol (RTCP) to allow monitoring of the data delivery.

Improving QoS Methods for IP Networks

Differentiated Services (DiffServ). The DiffServ protocol is used to provide service differentiation of services within backbone networks. Packets are labeled with their quality of service when they enter the network and placed within large groups. DiffServ is not an end-to-end solution and is only intended to work within the core of the network. There is no signaling between ends and the service is static, established ahead of time by service level agreements. However when used with an end-to-end QoS protocol such as IntServ, it has potential to provide good QoS. The DiffServ method is a good solution because it removes the per-flow state and scheduling that leads to scalability problems with IntServ QoS architectures.

Integrated Services (IntServ). The IntServ method of QoS provides guaranteed service with quantified delay and jitter standards. The IntServ protocol uses end-to-end signaling and resource reservation with three levels of service:

1. Guaranteed Service supports real-time applications and provides a guaranteed connection with standards for packet loss, delay and jitter that cannot be exceeded.

2. Controlled Load Service is the second best level of IntServ and is intended for applications that can tolerate some delay.

3. Best Effort Service provides no guarantees of service.

In a network using the IntServ protocol, every router in the network must implement IntServ, and every application that requires a level of QoS must reserve resources for the service. The RSVP protocol (described in the next paragraph) performs the signaling end to end and among the routers. There are problems with IntServ such as poor scalability. IntServ works well in small networks, but in large networks like the Internet, it is difficult to keep track of the many reservations. There could be thousands of reservations for some routers. Therefore IntServ is often recommended for use only in the edge networks while within the core of the network, other protocols will reserve aggregate resources. Another problem is that IntServ duplicates some of the functions of RTP such as jitter control.

Resource Reservation Protocol (RSVP). The RSVP protocol is used to signal QoS messages across a network. It is used with IntServ and also Microsoft Windows software. RSVP is an out of band protocol and messages are sent end-to-end. Routers listen for the RSVP requests for reservation and respond if they can support the service. RSVP is used in conjunction with other QoS protocols. The RSVP messages can be sent across the core of a network and only the edge routers using IntServ will interpret the messages.

Multi-Protocol Label Switching (MPLS). The MPLS protocol enables the transmitter to label packets and establish priority of service. The edge routers in a network mark the packets with a fixed length label that contains information on the route and the priority of the service. MPLS has a wide range of service classes, but it can only provide QoS within a MPLS domain and not end-to-end. Therefore the use of MPLS for QoS is very limited.

Layer 2 Solutions for QoS. A very effective method of implementing QoS within a network is to use layer 2 protocols to prioritize the traffic. Operating at the media control access (MAC) layer, the 802.p standard provides specifications for layer 2 switches that establish eight classes of traffic. Both Virtual Local Area Network (VLAN) and VPLS (Virtual Private LAN Service) will support 802.p to establish virtual circuits that are prioritized according to the type of content. Layer 2 solutions for QoS may be the most effective means for providing high quality and prioritized service over an IP network. However, layer 2 solutions are normally only used within intranets and VLANs that are controlled by a single system administrator. Over the global Internet, it may not be possible to use layer 2 QoS solutions when accessing public sites.


This article has demonstrated that the early methods of QoS in IP networks such as TCP flow control and FIFO buffers are not adequate for today’s high speed Internet applications. Better methods of QoS are necessary to support real time applications such as video and voice over IP.
There are three levels of QoS: best effort, differentiated service and guaranteed service. Best effort provides no QoS protocols other than TCP flow control and can only be used for bursty IP traffic that is not time sensitive such as email and web browsing. Differentiated service classifies and prioritizes traffic flows so that higher priority traffic has precedence in the network. Examples of differentiated service methods are PBR, CAR, IP precedence, PQ and DiffServ. The guaranteed service level of QoS provides the best QoS by reserving resources throughout the network for high priority traffic flows. Examples are RSVP and IntServ. Guaranteed level of service can only be provided when the network has adequate bandwidth to support the traffic.

Implementing Layer 2 QoS is very effective when a single system administrator controls the network. The 802.p standard provides a method for classifying and prioritizing traffic using the MAC address and layer 2 switches. With VLAN, virtual circuits can prioritize traffic and establish a high level of QoS. However these methods are not applicable when the IP network is the global Internet and public sites must be accessed.

The future of the Internet will depend on effective quality of service (QoS) methods. To support future real-time applications over the global Internet, reliable transmission methods will be needed along with the ability to classify and prioritize traffic on an end to end basis. The QoS methods described in this paper provide a framework for implementing QoS within IP networks. Layer 2 solutions will serve the Intranets, while standards and common solutions will have to be decided upon for the public Internet.

Services Marketing

Services marketing has incurred an explosive amount of scholarly research in the last 20 years, however since 1986 there has been no debate concerning the notion that services are distinct from products, and thus deserve a special approach, a set of concepts and a body of knowledge (Brown, Fisk, & Bitner, 1994). This essay will explain the distinguishing features of services marketing, giving examples where possible. It will begin by defining services marketing and giving some background knowledge on its divergence from product marketing. It will then examine the four characteristics of services, and then finish with an explanation of the extra P’s found in the services marketing mix.

In the last century there has been a large shift in marketing thought; evolving from a goods-dominated view, in which tangible output and discrete transactions were the focus, to a service-dominant view, in which intangibility, exchange processes, and relationships are central (Vargo & Lusch, 2004). Vargo and Lusch define services as the application of specialized competences (knowledge and skills) through deeds, processes, and performances for the benefit of another entity or the entity itself. Four idiosyncratic features of services will now be given, highlighting why services marketing is different from basic product marketing.

Arguably the most distinguishing feature about services is their intangibility. Services are defined in (Zeithaml, Bitner, & Gremler, 2006) as “deeds, processes, and performances”. None of these are physical objects in which a customer can take ownership of, even though during a service physical evidence will be apparent in the form of things like medicine the doctors prescribes to you, the photo taken of you riding the rollercoaster, or the food on your plate in a restaurant. This invisibility creates a number of issues for marketers. Firstly there is no stock, making it hard to manage supply and demand. Secondly services cannot be shown or displayed to customers, making it hard for marketers to advertise the quality of the service. And finally, because services don’t physically exist, there is difficulty in patenting them, making it easy for other firms to copy your service.

Another notable aspect about products is that on average they stay the same. If you buy a Ford Focus here in Australia, and then go and buy the same model in America, chances are they will both be exactly the same. Services are different in that they are heterogeneous, meaning they differ with each use. For example a wildlife tour will never be the same twice, not only because of the random and unpredictable nature of the animals, but the guide may be in a different mood, the weather will have changed, and there will be different customers each time. These factors make it harder to consistently give quality service, which is important to marketers because customers will have a particular set of expectations in mind, based primarily on what was promoted in the service and previous experiences in the particular industry.

Another distinguishable feature about services is the fact that it’s both produced and consumed at the same time, as opposed to products where customers do not see how the product is manufactured. A good metaphor for this is being at the theatre. Consumers can be compared to an audience, where they watch actors (employees) perform on stage (physical location like a business store) amongst props (physical objects like chairs, tables, pot plants etc). The actors are ‘live’ and performing (producing) at the same time as the audience are watching (consuming). This brings us to the concept of interactive marketing. In a service, operational staff carries out much of the marketing function (Klassen, Russel, & Chrisman, 1998), and marketers are left to the advertising and promotion.

The final distinction that differentiates services from products is their perishability. While some products perish very quickly (like water balloons), services simply cannot be stored, saved, resold or returned at all. Marketers main concern would be the procedure for when things do not go as planned. Customers cannot simply return the service and ask for another one; it is up to the service provider to offer the customer some kind of compensation. If passengers are forced to wait a long time for their flight, employees could provide free coffee and refreshments while they wait, in an attempt to make up for their failing service.

With product marketing the marketing mix includes the four P’s; product, price, place and promotion. Services use the same elements plus three more to help account for their unique nature.

Firstly there is people, which comprise of everyone that influences the buyer’s perceptions, including the buyer themselves. Customers have an active role in the production, and thus can influence the outcome of their own service or the service of others. For example a large family with screaming children interrupting a young couples romantic dinner at a restaurant.
Every person is important to the marketer, no matter how small their role may be. Consider an IT professional who installs computers in people’s homes. During that installation the buyer may form an opinion of the service provider as a whole based purely on that IT professionals performance. Sometimes a person is the sole service provider, for example a dentist or lawyer, making their performance and appearance critical to gaining a high perceived quality of service.

The sixth ‘P’ is physical evidence, which is the environment in which the service is delivered and where the firm and customer interact (Zeithaml, Bitner, & Gremler, 2006). It also includes any physical objects that assist in the delivery of the service. (Lehtinen & Lehtinen, 1991) define it as the environment and its instruments. With some services customers may find it hard to judge the quality of the service, especially with credence service’s like financial advisors or legal advice. It is crucial that marketing managers address consumer fears regarding risk that results before, during, and after consumption of credence services (Keh & Sun, 2008). Since the customer does not have the knowledge or experience to judge the actual service, they instead turn their attention to other things, including the physical evidence of service quality. This would usually come in the form of a professional looking workspace, however would change with each service provider. For example in a doctors surgery cleanliness would be expected.

Finally there is the service process, including the procedures, mechanisms and flow of activities by which the service is delivered (Zeithaml, Bitner, & Gremler, 2006). When purchasing a service, customers often have a set of expectations of the process of the service, and when these are not met, the perceived quality of service drops. For example in white water rafting a customer might be dissatisfied if, when they arrived, they were told they had to carry the raft to the top of the river first. The process is important because people participate in it, unlike products, where the process is behind doors.

Services represent at least 70% of the nation’s total GDP for at least 5 countries, including the United Kingdom and Australia, making it a hot topic for not only marketers, but anyone competing in the business world. Services are distinguished from products by four characteristics; intangibility, they are heterogeneous, there is simultaneous production and consumption, and their perishability. Services marketing differs from product marketing from the fact that three extra P’s are added to the original marketing mix; people, physical evidence and process.

How the U.S. Private Service Sector Can Eliminate $2 Trillion in Costs

The private service sector in the U.S. contributes $10 trillion to GDP approximately 20% of this figure is non-value-added costs…

Why apply lean to the service sector? Simply because of the potential cost reduction lean can bring to bear in trade, transportation and utilities, information services, financial services, professional and business services, education and health services, leisure and hospitality services, marketing services, etc. The private service sector in America contributes 80% of the Gross Domestic Product or approximately $10 trillion annually. In most service organizations it is conservatively estimated that at least 50% of their costs are a result of non-valued added work. For the sake of argument, let’s say that the average operating expenses for the service sector is 40% or $4 trillion. If 50% of these costs are non-value-added that is $2 trillion wasted every year.

Isn’t it amazing that potentially twenty percent of service sector GDP is non-value-added cost? Isn’t this enough justification for applying Lean in the service industry? Aside from the cost reduction power of lean other benefits the service industry could reap include error reduction, improved productivity, faster service delivery, and increased customer satisfaction.

Lean is no longer a manufacturing “thing”-it is a strategy for improving all business processes. It represents significant potential for achieving speed, quality, cost improvements and positioning an organization well above its competition.

By analyzing and improving its processes the service industry can reduce work in progress delays, unanswered phone calls, and incomplete reports. All of which result in lower customer satisfaction rates.

To enhance their competitiveness, service firms need to embrace systems such as Lean, Six Sigma and practical problem solving, within their organizations to ensure continuous process improvement. These systems can provide individual providers with the opportunity to meet and then surpass the challenge of competitors. A philosophy of continuous process improvement enables a service firm to cultivate a process-oriented way of thinking and developing strategies that assure continuous improvement involving people at all levels of the organizational hierarchy. Such a system requires a new organizational culture that considers change, rather than complacency, the norm.

A widespread dissatisfaction with the current way in which the organization functions can be the impetus for implementing lean in a service business. In the case of profit-making service organizations, dissatisfaction is heightened by red ink or lost market share. However, with respect to non-profit service organizations such as government, and public education, these kinds of competitive pressures are largely absent. Therefore, organizational dissatisfaction must be created from within by the leadership team.

The service sector of the U.S. economy can longer rely on the traditional methods like restructuring and reorganizing to make them more cost competitive. A more focused approach for improving quality and productivity must be found. One such alternative for increasing competitiveness is to introduce lean process improvement into service organizations. If you have a company in the service sector and think that you could benefit from a more effective strategy, then why not consider adopting lean thinking? Not only will you establish a more productive approach, but it will also help you to reduce your non- value-added costs, motivate your employees, increase customer value, and improve the efficiency of your business.

Products And – Or Services – Defining “Service-Oriented” Products and the Related Role of Technology

The economy can be analyzed using both market-driven and production-driven approaches to industry classification. The North American Industry Classification System (NAICS) uses a market-driven approach; the older Standard Industrial Classification (SIC) uses a production-driven approach.

Under a market-driven approach, the economy comprises goods-producing and service-providing industries. Goods-producing industries include: natural resources and mining, construction, and manufacturing; service-providing industries include: wholesale and retail trade, transportation (and warehousing), utilities, information, financial activities, professional and business services, education and health services, leisure and hospitality, and public administration.

Under a production-driven approach, the economy comprises product-driven and service-driven industries. Product-driven industries comprise enterprises that manage inventories available for sale as primary activities (regardless of whether they transform them or not). Under this approach, the retail, wholesale, and food service industries are product-driven. (The kitchens of food service providers are equivalent to factories.) Product-driven enterprises may have extensive cost accounting and operations practices for inventory management.

Industry classifications can be applied to an enterprise as a whole (the primary industry), and to the establishments within it, which may be in differing secondary industries. Establishments are facilities that include plants (factories and warehouses) and branches (retail and wholesale outlets).

For example, the hospitality industry is service-driven; under the production-driven approach, the bar and restaurant establishments within a hotel are product-driven. The entertainment industry is service-driven; under the production-driven approach, the retail and bar establishments within a theater are product-driven. The health care industry is service-driven; under the production-driven approach, the retail pharmacy establishment within a hospital is product-driven. Under the market-driven approach, all of these establishments are service-providing.

For example, a manufacturing enterprise is goods-producing under a market-driven approach, and product-driven under a production-driven approach. If it also operates a retail delivery system, the stores are service-providers under a market-driven approach, and are product-driven under a production-driven approach. If all sales revenue is sourced from its own products, the enterprise is in two primary industries. However, if forced to decide, its selection should be based upon core competencies – activities that it performs well. The enterprise can be divided into two separate business units: manufacturing and merchandising. The merchandising unit is an internal customer of the manufacturing unit. However, depending on strategy and policy, the manufacturing unit could sell products to wholesalers and other retailers, and the merchandising unit could buy products from other manufacturers and wholesalers. Under a market-driven approach, the manufacturing unit is goods-producing and the merchandising unit is service-providing, whereas under the production-driven approach, the merchandising unit is product-driven.

The make-up of the economy changes overtime as newer industries emerge and grow and older industries mature and decline. For example, the manufacturing industry is shifting from vertically integrated to strategically outsourced. Strategic outsourcers may manufacture specialized components and assemble finished products. However, by outsourcing the manufacturing of utility components to specialty scale manufacturers, strategic outsourcers can lower their production costs.

Biotechnology and nanotechnology are emerging industries. The information industries are growing as technology becomes more ubiquitous, and as knowledge is packaged in digital products. Knowledge is information that has been learned and retained. In the future, knowledge will be retained extensively in electronic form.

Products and services…

The term “product” is associated with something that is tangible – the resulting inventory from agricultural, mining and drilling, construction, and manufacturing activities. Outputs are either end-products, or components that are assembled into end-products in downstream processes within the enterprise or in its customers.

The term “service” is associated with something that is intangible – capabilities either delivered at the point or time of sale, or shortly thereafter, or as a supporting service. Supporting services can be purchased at the time of sale for downstream use, or later, and consist of such items as warranties beyond those bundled with the product, preventive maintenance, and routine cleaning and repairs.

Functions and features of products are easier to discern than those of services, which are event or activity driven, and may occur in the future.

The term “time of sale” means when a contractual or non-contractual agreement between a buyer and a seller is made, and does not necessarily mean when revenue is recognized and earned. Revenue is recognized and earned according to the accounting principles that fit the service offering, which may be over a period of time.

A commodity is a product or service that is indistinguishable and interchangeable with another of the same type because there is little to no value added. Many commodities are natural, such as produce, minerals, oil, and gas. Services can be commoditized too. The distinguishing factors of a commodity provider include convenience, quality of service, and price.

Product-driven enterprises also offer delivery and supporting services. Delivery services include arranging for transportation, dealer preparation, training, and gift wrapping. Supporting services include cleaning, repairs, and maintenance. To remain competitive over time, enterprises have to add services with their product offerings that exceed customer expectations. However, if customers require such services, then they must become part of the basic offerings. For example, bathroom facilities and color TV are included in modern hotel rooms, even though the primary purpose is providing a place to sleep.

Although services are intangible, their effects are not. Transportation services move people, cleaning services remove dirt and stains, and repair services restore items to working order. Services require facilities, equipment, and supplies that are bundled in. When products are bundled in, the enterprise pays sales or use tax, if applicable; when products are sold with services, the customer usually pays sales or use tax, if applicable.

Service-driven enterprises can produce tangible deliverables. For example, dry cleaners produce clean and pressed clothes; professional service firms, such as architects, accountants, attorneys, and consultants produce reports; and engineers produce design drawings that can be transformed into facilities, equipment, or other tangible products.

The recording and movie industries employ technologies that can capture sound and pictures. Starting in laboratories, these industries transform science into art. Hence, live entertainment performances (services) can be transformed into recorded products. As a consequence, an event or activity can be reproduced, duplicated, distributed, and repeated to the public-at-large indefinitely. Digital products are impacting traditional manufacturing, distribution, and consumer buying behaviors, and placing intermediaries at risk.

Process control and information technologies have enabled seamless integration between designers and manufacturers. The “design-to-construction” process becomes ubiquitous as computer-aided design and manufacturing technologies (CAD/CAM) enable a designer in one location to transmit specifications to manufacturers in others. The designs are virtual, and result in instructions that control manufacturing equipment in both local and remote locations. As a consequence, manufacturing can be outsourced strategically to any manufacturer that can accept electronic designs anywhere at any time. Because the process is seamless, the precision is higher.

As more enterprises adopt the design-to-construction model, dramatic changes will occur in the structure of industries. For example, in the publishing industry, books can be printed on demand from electronic files upon receipt of orders placed over the internet, eliminating the need for physical inventory available for sale at printers, publishers, and bookstores. The electronic files represent a virtual finished goods inventory from which physical products can be made when necessary. As a consequence, inventory carrying costs are lower.

Both product-driven and service-driven industries render service from centers that receive inbound and place outbound service and telemarketing calls. Call center activities can be outsourced in a similar fashion to manufacturing.

The notion of strategic outsourcing can be applied to almost every function in an enterprise provided intellectual property is protected. However, although management consultants may be used in the development of strategy, the ultimate responsibility for planning, deployment, execution, and performance remains in-house with the governance function.

Products and/or services…
The term “products and/or services” describes collectively all types of products and services.

Service-driven industries are evolving into providers of both “product-oriented” and “service-oriented” services. In order to differentiate product-oriented services from the delivery and supporting services, the term “service-oriented” products provides more clarity. Service-oriented products must be definable, duplicable, and repeatable. They are intangible outputs of processes that are represented by tangible items, packaged in a definable form. Technology plays a major role in the delivery through hardware, software, and both voice and data telecommunications. “Hard” products are tangible and “soft” products are intangible.

For example, traditional land phone line services were offerings with few differentiating features, primarily in the style of equipment. As the telephone system migrated from electro-mechanical to electronic, the offerings were transformed into service-oriented products with features such as call forwarding, caller identification, call waiting, and voice mail. Cell phone offerings are service-oriented products with more extensive functions and features than land lines. Cell phone service-oriented products have cameras built-in, and have delivery and supporting services bundled in such as account information, internet access, and application software for calculators, calendars, contact information, notes, games, music, pictures and movies. Cell phone and computer technologies are converging.

In the financial and business and professional services industries, service-oriented products are packaged with such items as accounts, agreements, brochures, contracts, databases, documents, equipment, facilities, policies, procedures, and statements.

In the leisure and hospitality industries, service-oriented products such as flights, hotel rooms, car rentals, and limousine services are packaged with facilities, equipment, and supplies. The types of facilities and equipment define specific offerings. For example, an Airbus A380 renders a different experience from a Douglas DC3 even though the principal service is the same: providing air transportation. A hotel room with a view of the ocean renders a different experience from one with no windows at all, even though the principal service is the same: providing accommodation. The quality of the accoutrements such as blankets, pillows, towels, newspapers, cable TV, internet access, and fruit baskets can affect the overall experience. A Cadillac renders a different experience from a Chevrolet, even through the principal service is the same: providing a rental car to drive, or a limousine.

Travel-related service-providers bundle air, hotel, car rental, and limousine services into packages to make the buying decisions easier for consumers. Event planners bundle travel-related services with conference and convention services for enterprises.

Consumables, durables, and facilities…

Manufactured products consist consumables and durables.

Consumables are products change or wear out as they are used and comprise food, clothing, personal care, health care, household supply, and office supply items. Media such as books, records, audio and video CDs, and DVDs are classed as consumables – the intellectual property is worth far more than the media.

Durables are long lasting equipment items such as appliances, furniture, and vehicles.

Digital products may involve no media if they delivered electronically other than the server of the publisher and the electronic device of the user.

Facilities are the outputs of construction activities and are made of durable materials.

Contractual or non-contractual products and/or services…

Agreements are contractual or non-contractual based depending upon the type of offering, and the nature of the relationship between buyers and sellers.

Consumable products can be sold with the right to return for exchange or refund within a certain period of time. Durable products can be sold with agreements that define warranties and maintenance.

Service-oriented products and services can be sold with agreements that specify exactly what is to be delivered and when, with procedures for reporting problems or complaints.

In negotiations, discussions should embrace the specific functions and features of hard and soft products, and the delivery and supporting services. Experienced negotiators pay attention to both the tangibles and intangibles because the total cost of ownership comprises both.

Digital-construction and digital-manufacturing…

As technology continues to develop, service-oriented products will become more common because it makes intangible items definable. New knowledge-based industries will emerge.

The reproduction of software on physical media is classified as goods-producing, and all other development and publishing activities are classified as service-providing under NAICS. However, software and other digital products are durable because they can last indefinitely, even if they have to be transferred among storage media. Software products are developed by service-providers such as business and professional services firms, publishers, and “in-house” developers. Nevertheless, software development activities require the project management disciplines of goods-producing industries, such as construction and manufacturing, to be successful.

The “digital-construction” and “digital-manufacturing” industries are evolving: digital construction delivers software; digital manufacturing delivers soft service-oriented, information, and knowledge-based products. However, through CAD/CAM processes, software delivers hard products too. In the future, almost all hard and soft products will result from digital-construction and digital-manufacturing processes.

Defining product and/or services is an enterpriship (entrepreneurship, leadership, and management) competency.