Dr. B.R.

Ambedkar University Delhi

MBA 2022-24
Service Operations Management

Managing Facilitating Goods In

Service Operations Management
By:
Submitted to:
Deepanshu Nimesh
Dr. Kiran Garg Dhruv Sharma
Kirti Bhalla
Pranay Rathore
Wonreichon Tuithung
 WHAT DOES FACILITATING GOODS IN SERVICES MEAN?

Facilitating goods refer to products or services

that are not the final end-products but are
necessary to enable or support the production or
delivery of other goods and services. These goods
play a supportive or auxiliary role in the overall
production or delivery process.
For example, raw materials and components used
in manufacturing, machinery and equipment,
transportation services, and utilities are
considered facilitating goods because they are
essential for the production of final goods. These
goods contribute to the efficiency and
effectiveness of the production process but are not
the ultimate output that reaches the end consumer.
 SIGNIFICANCE OF FACILITATING GOODS
Facilitating goods play a significant role in service delivery for several reasons:

● Efficient Production Processes: Facilitating goods, such as raw materials, machinery, and
equipment, are essential for the manufacturing and production processes. They enable
businesses to produce goods efficiently and in a timely manner.
● Supply Chain Optimization: Facilitating goods are crucial components of the supply chain.
Managing and optimizing the flow of these goods ensures a smooth and effective supply
chain, reducing delays and costs associated with production and distribution.
● Cost Efficiency: By having access to high-quality facilitating goods at reasonable prices,
businesses can achieve cost efficiency in their operations. This, in turn, can contribute to
maintaining competitive pricing for the final products or services.
● Innovation and Technological Advancement: Facilitating goods often include technology,
machinery, and equipment that drive innovation and technological advancement. Access to
cutting-edge facilitating goods can enhance a company's capabilities and competitiveness in
ROLE OF FACILITATING GOODS IN ENHANCING SERVICE
DELIVERY
Facilitating goods play a crucial role in enhancing service delivery by:

● Enabling Service Consumption: Facilitating goods provide the means for customers to
directly experience the service. Without them, service delivery would be impossible.
● Augmenting Service Quality: The quality of facilitating goods directly impacts the
overall service experience. High-quality goods enhance the experience while low-quality
goods detract from it.
● Supporting Service Differentiation:Businesses can use unique facilitating goods to stand
out from their competitors. This helps them attract and retain customers.
● Ensuring Smooth Service Flow: Availability of necessary facilitating goods prevents
disruptions and delays in service delivery, maintaining operational efficiency.
● Optimizing Resource Allocation: Efficient management of facilitating goods allows
businesses to allocate resources efficiently, reducing service costs and improving
productivity.
 ROLE OF FACILITATING GOODS IN ENHANCING
CUSTOMER EXPERIENCE
Facilitating goods, tangible items in service delivery, play a vital role in enriching customer experience,
complementing the core service. They enhance the overall service encounter in various ways-

● Communication Tools: Communication tools, including telecommunication systems and messaging

platforms, play a crucial role in enhancing customer service by enabling businesses to promptly address
inquiries and provide real-time assistance.
● Logistics and Delivery Services: Facilitating goods like reliable transportation, packaging materials, and
tracking systems contribute to a positive customer experience in industries involving product delivery.
Timely and secure delivery enhances customer satisfaction and builds trust.
● Facilities and Ambiance: Well-designed facilities and a pleasant ambiance facilitated by goods such as
furniture and decor contribute to a positive customer experience for businesses with physical locations.
Factors like interior design and cleanliness play a role in customer comfort.
● Customer Support Resources: Trained customer service representatives, communication tools, and
knowledge bases are facilitating goods that contribute to effective problem resolution and a positive
overall customer experience. Customer support is a critical component in ensuring customer satisfaction.
 TYPES OF FACILITATING GOODS
There are 2 types of facilitating goods in service operations.
These are:

Dominant Goods:

● These are the primary goods or materials that are directly

related to the core service being offered.
● They are essential for the service to be delivered and are
often the main reason why customers choose a particular
service provider.
○ Food at a restaurant
○ Golf clubs at a golf course
○ Medical supplies at a doctor's office
○ Legal documents at a law firm
○ Airline tickets for a flight
Peripheral Goods:

● These are secondary goods or materials that are not

directly related to the core service, but they enhance
the customer experience.
● They are not essential for the service to be delivered,
but they can make the service more convenient,
enjoyable, or memorable.
○ Napkins and silverware at a restaurant
○ Scorecards and pencils at a golf course
○ Magazines and blankets on an airplane
○ Coffee and snacks in a waiting room
 Process of Procuring Facilitating Goods

1. Requirement Identification: Identify the specific facilitating goods needed for service delivery,
considering customer needs, service standards, and operational requirements.
2. Supplier Selection: Research and evaluate potential suppliers based on factors like quality,
price, reliability,delivery time, and sustainability practices.
3. Negotiation and Contract: Negotiate contracts with chosen suppliers, outlining pricing,
delivery schedules,quality standards, warranty terms, and payment methods.
4. Ordering and Receiving: Place orders with suppliers and ensure timely delivery and receipt of
goods.
5. Inspection and Quality Control: Inspect incoming goods for quality, quantity, and adherence
to specifications.
6. Storage and Inventory Management: Store goods safely and efficiently, maintain adequate
inventory levels, and implement inventory management systems.
 Importance of Availability of Facilitating Goods

● Ensures Service Delivery: Lack of necessary facilitating goods can disrupt service
delivery, impacting customer satisfaction and business operations.
● Maintains Quality Standards: High-quality facilitating goods contribute to
consistent service quality and a positive customer experience.
● Improves Operational Efficiency: Readily available goods enable smooth service
operations and minimize delays.
● Reduces Cost: Efficient procurement and inventory management practices can
optimize costs associated with facilitating goods.
● Enhances Sustainability: Choosing environmentally responsible suppliers and
goods can contribute to a more sustainable business model.
 Inventory Management Strategies

● ABC Analysis: Categorize facilitating goods based on their usage and cost (high-value,
medium-value, and low-value), focusing on managing high-value items with greater
precision.
● Forecasting: Utilize historical data and anticipated demand to forecast future requirements
for facilitating goods.
● Just-in-Time (JIT): Order goods closer to the time they are needed to minimize storage
costs and reduce waste,but requires careful planning and coordination.
● Safety Stock: Maintain a buffer inventory of critical facilitating goods to mitigate
unexpected demand fluctuations.
● Technology Integration: Implement inventory management software to track stock
levels, optimize ordering,automate processes, and gain real-time insights.
 Inventory Management Strategies (Contd.)

● Demand Planning: Collaborate with different departments to understand and predict

future demand for facilitating goods.
● Supplier Collaboration: Work closely with suppliers to ensure timely deliveries,
adapt to changes in demand, and benefit from their expertise.
● Waste Reduction: Implement practices like using reusable items, minimizing
packaging, and properly disposing of used goods to reduce waste and environmental
impact.
● Sustainable Procurement: Prioritize suppliers with strong environmental practices
and consider the environmental impact of facilitating goods throughout their
lifecycle.
 Effectiveness of Inventory Management Strategies

Effective inventory management strategies for facilitating goods are crucial for:

● Cost Optimization: Minimizing unnecessary inventory holding costs, maximizing stock

utilization, and negotiating favorable pricing with suppliers.
● Improved Service Delivery: Avoiding stockouts and ensuring availability of goods for smooth
service operations.
● Enhanced Customer Experience: Ensuring a consistently positive and uninterrupted service
experience for customers.
● Sustainability: Reducing waste, minimizing environmental impact, and promoting sustainable
practices throughout the procurement and inventory management process.

By continuously refining these strategies, businesses can optimize their facilitating goods
procurement and inventory management processes, leading to better service delivery, improved
customer satisfaction, increased cost efficiency, and a more sustainable business model.
Case Study: Starbucks and the Role of Facilitating Goods in
Service Operations Management

Introduction: Starbucks is a global coffee chain known for its high-quality coffee,
comfortable atmosphere, and friendly service. However, the success of Starbucks goes
beyond just its product offerings. The company's strategic use of facilitating goods
plays a crucial role in enhancing the customer experience and driving its overall
service operations management.
 Facilitating Goods at Starbucks

1. Coffee Equipment: High-quality coffee 2. Furniture and Décor: Comfortable

machines, grinders, and brewing equipment seating, inviting ambiance, and a modern
ensure consistent and delicious coffee aesthetic create a welcoming and relaxing
preparation across all locations. environment for customers.
 3. Disposable Products: Cups, lids, 4. Food and Beverages: Pastries,
straws, napkins, and other disposable items sandwiches, and other food items
contribute to convenience and hygiene, complement the coffee experience and offer
especially for customers on the go. additional revenue streams.
 Impact of Facilitating Goods

● Enhanced Customer Experience: The availability of high-quality equipment,

comfortable seating, and convenient technology creates a positive and
memorable experience for customers.
● Improved Operational Efficiency: Standardized equipment and processes
enable efficient service delivery and minimize preparation time.
● Brand Differentiation: Unique furniture, décor, and digital elements contribute
to Starbucks' distinct brand identity and differentiate it from competitors.
● Increased Revenue: Food and beverage offerings provide additional revenue
streams and encourage customers to stay longer and spend more.
 Challenges and Solutions

● Maintaining Quality and Consistency: Ensuring consistent quality and

functionality of equipment, furniture, and technology across all locations requires
careful management and regular maintenance.
● Managing Inventory: Optimizing inventory levels for disposable products and
food items is crucial to avoid waste and stockouts.
● Balancing Convenience and Sustainability: Offering disposable products for
convenience can contradict environmental sustainability goals. Starbucks has
implemented programs to encourage reusable cups and reduce waste.
● Technology Integration: Integrating technology seamlessly into the service
process requires ongoing innovation and adaptation to evolving customer needs.
 Key Takeaways from the Case

● Facilitating goods are tangible elements that support the delivery of a

service and enhance the customer experience.
● Effective management of facilitating goods requires careful planning,
inventory control, maintenance, and continuous innovation.
● Starbucks' successful use of facilitating goods showcases the positive
impact they can have on service operations management.
● Balancing convenience, quality, sustainability, and technology
integration are key challenges businesses face in managing facilitating
goods.