8

Ex: KFC had

online order
placement system
and through the
system customer
can enjoy
delicious
KFCfood at his
home.The
operation
strategies are
depending on the
existing market
competition. As a
result of high
marketcompetitio
n in the fast food
sector the
operation system
at KFC must
tighter and
efficient
as possible.Ex:
Burger King,
Subway, Pizza
Hut, Mac
Donalds,
Dominos are
market
competition. To
compete
withthem KFC
have to make
efficient methods
of operations.To
make profit
operation strategy
has to concern
about several
points such as,1.

How much we
spread our
facilities?2.
How we
formulate the
supply chain?3.

Nature of the
work force4.
Quality
assurance5.

Stores and
storageThe
operation
mechanism has to
invent durable
solution for
each and every
question which
was
occurringduring
the business
process.
Operation
management has
to add value to
the customer. It
has to be
madecustomer
satisfied and
happy. Customers
are seeking for
the satisfaction
more than they
were spent to
getthe product to
the service.
Hence the
operation
mechanism has to
be dexterous to
add value to
thecustomers as
same as his spent
money. To
achieve the target
company has to
provide its
customers
withadditional at
an increase in
cost that
is perceived to be
less than those
benefits.Ex: KFC
Vs Mac Donalds
restaurantsThere
are key points
to maintain,1.

Cost2.

Quality3.
Delivery4.

Flexibility5.

ServiceThrough
the above
mentioned key
points company
can uplift its
productivity and
the incensement
of
the productivity
produce
more competitive
cost structure
for the organizati
on and enable
the organization
tooffer more
competitive
prices to its
customers
xvi
.
9
1.

Technological
productivityThro
ugh the
technological
productivity
company can be
gain efficiency,
accuracy and the
quality
ofmaintenance.2.

Employee
productivityUnde
r the employee
productivity the
company can be
produce more
production in the
same time
frame.3.
Managerial
productivityImpr
ovement of
managerial
productivity
support improves
quality and the
quantity of the
product,communi
cation, employee
relations and
decision
making.Furtherm
ore, to earn more
profits the
company has to
enter to the new
markets.Ex:
number of
Current KFC
outlets in Sri
Lanka
–
 30To earn more
profits
the company has
to expand outlets
network over the
country and the
company has
toenhance and
redevelop the
existing products,
menu and service
due to the global
trends and
competitorsmove
ments.
10
The service
segment is growing
to be an important
element in every
business, attracting
more
importance
towards having a
strong operations
management
mechanism”.
Service industry
is an industry that
creates services
rather than
tangible objects.
Goods-
producingindustri
es are agriculture,
mining,
manufacturing,
and construction;
each of them
creates some kind
oftangible object.
Economists
divide all
economic activity
into two broad
categories, goods
and
services.Service
industries include
everything else:
banking,
communications,
wholesale and
retail trade,
all professional se
rvices such as eng
ineering, compute
r software develo
pment, and medic
ine, nonprofiteco
nomic activity, all
consumer
services, and all
government
services,
including defense
andadministration
of justice. A
services-
dominated
economy is
characteristic of
developed
countries. In less-
developed
countries most
people
are employed in
primary activities
such
as agriculture and
mining.
xvii
 Basically,
service sector
consist
05 components.1.

Hotels
and Restaurants2.
Transport,
storage
& communication
3.

Finance,
insurance , real
estate & business
service4.

Public
administration &
defense5.
Social and
Personal
serviceDuring the
development
process of the
service industry
itself in last
decade, a general
trend
featuringincreasin
g diversification
and sophistication
of services. The
mechanism
functioning
behind that trend
isinnovation,
which can be
identified as two
types, with one
being technical
innovation and
the
othermanagement
innovation. This
identification also
points to two
ways of
modernizing
traditional
services,that is,
technical
improvement and
management
improvement.
The former
implies that a
service
providersuch as a
service firm can
introduce
advanced
technologies like
information
technology and
hightechnology
so as to transform
its obsolete
hardware structur
e. The latter
means that
a service provider
canreform its old
operational and
organizational
modes by
importing modern
management
expertise
andspecialized
talents. These two
types of
transformation
and improvement
can be
implemented
separately
orsimultaneously
for a specific
service provider.
xviii
Example: Mac
Donald restaurant
introduced
special break
down food menu
during the
Ramasan
season.It is a
management
innovation.
Online order
placement system
of KFC is a
technologicalinno
vation.
11
The advances in
new technology
in the last decade
brought about a
major
advancement in
the servicesector.
The use of the
new technology
was effective and
with the use of
technical tools,
the
customercould
get services at
home.Ex: The
customer can
order anything he
wants to eat

from KFC
through the
internet and order
willcomplete
within half an
hour.Internally,
the spread of
business has
accelerated, and
in the past
decade, many
new service
providershave
entered new local
markets.Ex:
Insurance sector
in Sri Lanka
–
AIA, Fair First
and Softlogic
were entered to
the domestic
insurancemarket
in last decade.The
service provided
with the product,
which plays a
significant role in
selling goods.
The
service provided
at the time of sale
or sale directly
affects the
merchandise
markets. Hence
Service providers
aremore
concerning about
the service same
as goods.
Because service
which is provided
with goods are
can‘t
 able to satisfied a
customer it will
directly effect to
the sales