Achieving Breakthrough Service Delivery Through Dynamic Asset Deployment Strategies

Morris A. Cohen (), Narendra Agrawal () and Vipul Agrawal ()
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Morris A. Cohen: The Wharton School, University of Pennsylvania, 546 Jon M. Huntsman Hall, 3730 Walnut Street, Philadelphia, Pennsylvania 19104-6340
Narendra Agrawal: Department of Operations and MIS, Leavey School of Business, Santa Clara University, Santa Clara, California 95053
Vipul Agrawal: MCA Solutions, 2 Penn Center Plaza, Suite 700, 1500 JFK Boulevard, Philadelphia, Pennsylvania 19102

Interfaces, 2006, vol. 36, issue 3, 259-271

Abstract: Many firms have shifted their focus from their products to their customers and the value derived from owning and using the products. They see after-sales service as an important source of revenue and profit, customer acquisition and retention, and competitive differentiation. However, they also find it challenging to manage their service-supply chain. Service organizations must position and manage service-supply-chain resources optimally to support the delivery of after-sales service. They must also develop capabilities to respond rapidly to the demand for service in a cost-effective manner. To succeed in implementing a service-centric strategy, firms must determine what items in their products’ service bill-of-material hierarchy should be deployed throughout their geographical hierarchy of service support locations. They must make these complex and interrelated decisions in anticipation of service demand, which is uncertain. Firms must also be flexible and should understand the mechanisms in a service-supply chain needed to fulfill customers’ demands for service and the resulting demands for support assets and capacities. Dynamic asset deployment (DAD), a collection of management policies that promote this flexibility, can be used to develop the capabilities needed to effectively and profitably deliver services. These policies require a real-options-based optimization approach to decision making.

Keywords: inventory; production; multi-item; multiechelon; industries; telecommunications (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (3)

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