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Revista de Administração FACES Journal

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Universidade FUMEC

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Visintin, Filippo; Rapaccini, Mario

FLEXIBILITY IN FIELD SERVICES: A CONCEPTUAL MODEL

Revista de Administração FACES Journal, vol. 8, núm. 4, octubre-diciembre, 2009, pp. 80-97

Universidade FUMEC

Minas Gerais, Brasil

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R. Adm. FACES Journal Belo Horizonte · v. 8 · n. 4 · p. 80-97 · out./dez. 2009. ISSN 1984-6975 (online). ISSN 1517-8900 (Impressa)80


FLEXIBILIDADE NO SETOR DE SERVIÇOS: UM MODELO CONCEITUAL

Filippo VisintinUniversity of Florence

Mario RapacciniUniversity of Florence

RESUMO

A flexibilidade pode ser considerada como a capacidade de uma organização para enfren-tar a incerteza. Como o setor de serviços é caracterizado por um elevado grau de incerteza,a flexibilidade pode ser considerada uma importante arma competitiva nesse segmento. Aflexibilidade tem sido extensivamente estudada em ambientes de produção, no entanto,não existem trabalhos abordando este tema na literatura de serviços de campo para onosso conhecimento. Neste trabalho, nós desenvolvemos um modelo conceitual, onde asdimensões mais importantes da flexibilidade no setor de serviços são definidas e as rela-ções entre eles são descritos. Esse modelo pode ajudar os gestores de serviços a compre-enderem como a flexibilidade pode ser alcançada e como ela pode auxiliar na competiçãono campo de serviços.

PALAVRAS CHAVES

Setor de serviços. Flexibilidade. Modelo conceitual.

ABSTRACT

Flexibility can be considered as the capability of an organization to face uncertainty. Sincefield services are characterized by a high degree of uncertainty, flexibility can be consideredan important competitive weapon in field service business. Flexibility has been extensivelystudied in manufacturing environments, however, to the best of our knowledge, there areno papers addressing this topic in the field service literature. In this paper, we develop aconceptual model where the most important dimensions of field service flexibility are definedand the relationships between them are described. Such a model can help service managersunderstand how flexibility can be achieved and leveraged to compete in field service business.

KEYWORDS

Field Service. Flexibility. . . . . Conceptual model.

ADMINISTRAÇÃO DE RECURSOS HUMANOS

Data de submissão: Data de submissão: Data de submissão: Data de submissão: Data de submissão: 02 jul. 2009 . Data de aprovação: Data de aprovação: Data de aprovação: Data de aprovação: Data de aprovação: 03

nov. 2009 . Sistema de avaliação: Sistema de avaliação: Sistema de avaliação: Sistema de avaliação: Sistema de avaliação: Double blind review . Uni-

versidade FUMEC / FACE . Prof. Dr. Cid Gonçalves Filho . Prof.

Dr. Luiz Cláudio Vieira de Oliveira . Prof. Dr. Mário Teixeira ReisNeto

FILIPPO VISINTIN . MARIO RAPACCINI

R. Adm. FACES Journal Belo Horizonte · v . 8 · n. 4 · p. 80-97 · out./dez. 2009. ISSN 1984-6975 (online). ISSN 1517-8900 (Impressa) 81

INTRODUCTION

Flexibility can be defined as the ability torespond with little penalty in time, effort, cost andperformance to the ever-changing and increasingcustomers’ needs (SETHI; SETHI, 1990; UPTON,1994). Flexibility is important to accommodatechanges in the operating environment. Hence, theneed for flexibility increases as the uncertainty inthe environment increases. The types of flexibilityin manufacturing and the methods for measuringthem are extensively researched in literature.However, the corresponding literature in serviceflexibility is very sparse. To the best of ourknowledge, flexibility in field service has never beenresearched before.

Field services, are those services involvingserver’s personnel, vehicle and equipmenttravelling to the customer location in order todeliver the service (AGNIHOTHRI et al. , 2002).This definition of field services is broad enough toinclude pick-up/delivery services, emergencyservices and after sales services. In this paper, wewill focus only on these latter, as a result, we willconsider as field service the installation/maintenance/repair services provided, at thecustomer site, after the product sale. In general,the need for Field Service emerges when: (a) theproduct/asset to serve cannot be easily movedfrom customer’s site because of its physicalcharacteristics in terms of weight, volume andfragility, and/or (b) the unavailability costs relatedto the product’s malfunctioning or downtimeprevents moving the product from customer’s siteto the service facility. When unavailability costs arehigh, the value created for customers through thefield service is high as well. In such a situation thefield service can be a very profitable business(OLIVA; KALLEMBERG, 2003; AGNIHOTHRI;MISHRA, 2004; ABERDEENGROUP, 2005a;BLUMBERG, 1991, p. 24; GOFFIN, 2001;RAPACCINI et al ., 2005). Managing the fieldservice, however, can be a cumbersome task forOEMs traditionally involved in “product centric”

business (OLIVA; KALLEMBERG, 2003; MATHIEU,2001). As a result, several OEMs outsource thecustomer support. In this paper we will refer toField Service Organization (FSO) to identify theunit responsible for the field service management,which can be either an OEM division or anindependent service organization to whom theresponsibility of managing the field service hasbeen outsourced.

FSOs are exposed to highly uncertainenvironments. As we will point out later (see Table1), these uncertainties are associated with boththe FSO’s resources and the operating conditions.In fact, although some routine activities (such asinstallation, training and preventive maintenance)can be scheduled in advance, forecasting thedemand for field service is, in general, very difficult.In addition, since most of the resources aredeployed on-field, a great deal of uncertaintiesaffects, also, the operating condition. The successof FSOs, however, depends upon theresponsiveness and the dependability of thesupport they provide. As a result, FSOs, on theone side, tend to reduce the uncertainty of theiroperating environment (through preventivemaintenance, remote monitoring and support,customer training, etc.) and on the other side, needto be flexible to face the residual uncertainty. Inthis paper, we develop a conceptual model wherethe most important dimensions of field serviceflexibility are defined, and their relationships aredescribed. Such a model can help servicemanagers understand how flexibility can beachieved and leveraged compete in field servicebusiness.

The paper is therefore organized as follows: insection 2 we illustrate the concept of flexibility; insection 3 we will review the literature on serviceflexibility; in section 4 we will describe theconceptual model, and in section 5 we will drawsome conclusions, suggesting the directions forfuture researches.



THE CONCEPT OF FLEXIBILITY

An extensive review on the concept ofmanufacturing flexibility, mostly referring tomanufacturing contexts, can be found in Guptaand Goyal (1989), Sethi and Sethi (1990), DeToniand Tonchia (1998, 2005), Vokurka and O’Leary-Kelly (2000), Koste and Malhotra (1999),Giachetti et al. (2003). In these papers, there is ageneral consensus around the definition offlexibility provided by Upton (1994), as the “abilityto change or react with little penalty in time, effort,cost and performance”.

Flexibility can be thus considered as thecapability to deal with the uncertainty, both in aproactive and reactive way. The dual reactive-proactive nature of flexibility is well explained byGerwin (1993). The author shows how firms canmake use of flexibility, not only to face the changesthat may occur in the competitive arena, but alsoto create uncertainties in the market, thatcompetitors may not be able to face. Uncertaintiescan be both external, that is, relevant to theoperating environment and market (both from thecustomers and suppliers side), as well as internal,that is, relevant to the firm’s infrastructure,operations and processes. Newman et al. (1993),provide a comprehensive explanation about howinternal and external uncertainties and flexibilityare related. They use an analogy of a balance, withuncertainty on one plate and flexibility on the otherplate, as a counterbalancing force. They show howthe effect of flexibility can be increased by adopting“buffers” such as inventory, overestimated leadtime, and overcapacity to move the fulcrumtowards the uncertainty’s plate. They point out howinternal uncertainties are, to some extent, a resultof the external ones (e.g. variations in customerrequirements in terms of delivery time can causeunexpected changes in the internal planning andcontrol) and how the adoption of buffers (i.e.capacity) to absorb external uncertainties mayresult in an increased system complexity andtherefore internal uncertainties. This, in turn, may

increase the need of additional buffers resultingin a vicious circle. While it is easy to recognize thatfirms need to be flexible to be competitive in ahigh uncertainty environment, the concept offlexibility, “is complex, multidimensional and hard-to-capture,” as stated by Sethi and Sethi (1990).Slack (1983, 1987) states that flexibility iscomprised of two elements: “range” and“response”. Range flexibility is defined as “the totalenvelope of capability or Range of states whichthe [production] system or resource is capable ofachieving”. Response flexibility is defined as “theease, in terms of cost, time, or both, with whichchanges can be made within the capabilityenvelope”. Upton (1994) defines the “constituentelements” of flexibility as Range, Mobility andUniformity. He extends the concept of Range inorder to consider, not only the number of differentstates reachable by a system, but also the extentof differentiation among these states, that is, theirheterogeneity. He introduces the term “Mobility”to identify the ability to move from one state toanother “in term of transition penalties for movingbetween the Range”. He defines the concept of“Uniformity” as the “capability to performcomparably well within a specified Range”. Finally,he states that in order to understand the actualneed of flexibility and to devise actions aiming atreaching that level, managers should: (a) assesthe flexibility dimensions; (b) consider the timehorizon where the need of change/adaptationrelevant to these dimensions can occur; and (c)study each dimension, referring to a specific timehorizon, according with the constituting elements(Range, Mobility, Uniformity). The conceptsadopted by Upton to develop his conceptualmodel have been widely debated in the literature.The temporal logic to study flexibility was proposedby Merchant (1983) and Zelenovich (1982). Theydifferentiate short, medium and long-term flexibilityaccording with the time horizon when uncertaintiesarise. Connected with the temporal classificationthere is a distinction between operational and



strategic flexibility. The former is connected withthe ability to cope with the uncertainties that arisein the short-medium term, while the latter has along term orientation and refers to the firm’scapability to change its competitive priorities andbusiness (HAYES; PISANO, 1994; STALK, 1992;DE TONI; TONCHIA, 2005). There is a huge bodyof literature on the dimensions of flexibility, mostlyfocused on manufacturing environments (SETHI;SETHI, 1990; BROWN et al., 1984; GERWIN,1987; BROWN, 1984; AZZONE; BERTELÈ, 1989;CHEN et al., 1992; MANDELBAUM; BUZZACOT,1990; RAMASESH; JAYAKUMAR, 1991). Koste andMalhotra (1999) provide an exhaustive literaturereview of these classifications, identify the mostoften-cited dimensions and (re)define them onthe basis of the “constituent elements” introducedby Upton, referred to as Range-Number (RN),Range Heterogeneity (RH), Mobility (M) andUniformity (U). In addition, they organize theflexibility dimensions in a hierarchical orderidentifying which of them have to be consideredas necessary building blocks for the others,according with the literature.

FLEXIBILITY IN SERVICE.

There are not many papers in the OM literatu-re that explores the concept of flexibility in servi-ce. Service flexibility is mentioned several times inliterature (KIM, 1991; DIXON, 1990), but the de-finition provided are usually limited in scope. Infact, these definitions usually refer to “service” asa performance (in terms of delivery time, ordersfulfilment, etc.) and not as a business per se. Sin-ce services are typically labour intensive, there arepapers addressing the topic of labor/workforce fle-xibility (RILEY; LOCKWOOD, 1997; IRAVANI, 2005;NETESSINE, 2002) and cross-training (AGNIHO-THRI et al ., 2003, AGNIHOTRI; MISHRA, 2004) inservice contexts. However, these papers are notaimed at studying the concept of service flexibili-ty. Instead, they develop quantitative models to

measure and evaluate the impact of specific di-mensions of flexibility on service performance. Dueto the heterogeneity of the service businesses, thetheoretical papers and empirical researches onservice flexibility usually focus on specific serviceindustries. For example, Aranda (2003) use theflexibility dimensions defined by Ramasesh andJayakumar (1991) to study the role of flexibilityas a moderating variable between operations stra-tegy and performance in engineering consultingfirms. Heim and Sinha (2002), by means of anextensive survey, identify the major kinds of un-certainty affecting the e-retailing industry and de-fine the six relevant dimensions of flexibility, clas-sifying the e-retailing service processes in a conti-nuum of flexibility. Verdù-Jover and Llorens-Mon-tes (2004) explore the concept of fit betweenthe firm’s actual flexibility and that required by theenvironment, thus proposing a list of items to as-sess flexibility both in manufacturing and servicefirms. Harvey and Lefebvre (1997) propose a the-oretical framework for studying service flexibilityfocusing on the banking industry. They show howservice firms have to deal with “changes of diffe-rent kinds that impose on the service delivery pro-cess the burden of adapting quickly and frequen-tly.” They refer to this as variability (instead of un-certainty) and differentiate between internal vari-ability (relevant to the firm and its partners in thevalue chains) and external variability (relevant tothe market). In the same paper, Harvey and Lefe-bvre state that service firms can reduce variabilityat the source (e.g. targeting specific market seg-ments and focusing multiple process on differentmarket segments, reengineering the internal pro-cesses and improving quality) while facing theresidual variability that emerges in different stagesof service delivery process. Hence, they define fle-xibility as the capability to face the residual exter-nal variability and robustness as the capability toface the residual internal variability. In addition,they point out strategies to handle variability inback-office and front-office activities.



FIELD SERVICE FLEXIBILITY

In this section we will develop the model forfield service flexibility, following the approach su-ggested by Upton (1994) and described in theprevious sections.

The uncertainties affecting field services canbe classified in relation to: (a) the time horizonwhen they emerge; (b) their internal vs. externalnature (see table 1). Considering two different timehorizon (short term and medium/long term), wewill identify internal and external uncertainties affec-ting FSOs, and the relevant flexibility dimensions;then, we will describe these dimensions accor-ding with the four constituent elements RN, RH,M, U.

Time horizon

We consider two different time horizons: shortterm and medium/long term. Short term uncer-tainties are those affecting the delivery process,while long term uncertainties are those connec-ted with both the market opportunity/threat andthe design adequacy of the FSO’s processes andsystems. As a result, in the short term, we willconsider: (a) the FSO’s resources fixed (exceptfor the on-call workers who can be activated rapi-dly upon request); (b) the decisions to take ope-rational in nature. The operational decisions arethose relevant to the day by day and hour by hourmanagement of the delivery process. Typical ope-rational decisions in field services are the coordi-nation, allocation and control of the service calls;the scheduling, coordination and control of servi-ce staff (both in the contact-center and on thefield), and the coordination and control of the ser-vice parts flows. In the medium/long term weconsider the possibility for the FSO’s to modify itsprocesses and resources in order to meet futuremarket needs. We will thus consider decisions thatare tactical and/or strategic in nature. Strategicdecisions are typically those concerned with themodification of the service portfolio. Therefore theypertain the selection of the customers, territories

and products to serve and service level to provideto the customers base.

Tactical level decisions are concerned with: (a)the definition of the desired levels of spare partsinventory, (b) the definition of a territory assign-ment (districting) for Field Engineers (FEs), (c) thedefinition of the FEs cross-training policy, and fi-nally (d) the design of the delivery process (BLUM-BERG, 1991 p. 49). It should be noted that theshort term flexibility can be interpreted as an effec-tive performance (in part demonstrated and in partpotential) while the long term flexibility, a pers-pective performance (that is not demonstrated,but only potential).

Dimensions

In services, firms make use of three maininputs, information, labor and materials, to provi-de customers with capability to serve and actualservice performance (BLUMBERG, 1991 p.58). Infield services, the capability to assure the availabi-lity of a given performance generates revenuesand determines customer satisfaction, even if noservice is actually provided. For example, it is thecase of a product not failing within the warrantyperiod. Hence, we define the FSO flexibility byconsidering both its potential and actual nature.

In order to be flexible, a FSO should be ableto cope with both the qualitative and quantitativeuncertainties affecting service demand. We willrefer to these capabilities as Volume and Mix Fle-xibility respectively. These dimensions will be pla-ced at the top level (Firm level) of our hierarchicmodel.

Volume and Mix Flexibility, in their turn, canbe achieved only if the delivery process is actuallyflexible. The field service delivery process usuallyinvolves three distinct functions that are(BLUMBERG, 1991 p.147): the Call Handling &Technical Assistance, the Logistics & MaterialSupport and the Field Operations functions.

Therefore we will consider the flexibility of thesethree functions as building blocks of the medium



level (function level) of our conceptual model. Ablueprint of a typical delivery process, with an

indication of the activities under the responsibility ofthe key functions proposed in Table 1.

Table 1

Uncertainties affecting Field Service Organizations



Flexibility at function level, is enabled by (i)the flexibility of the workforce involved in the rele-vant processes/activities; (ii) the flexibility of theInformation System (IS) used to collect, store, pro-cess and communicate (within and between thefunctions) the information required to performthese processes/activities; and (iii) the flexibilityof the Logistics Systems that allow to store (e.g. in

depots, warehouses), handle (e.g. material han-dling system) and transport (e.g. vehicles) thematerials/parts required to provide support (andto guarantee the mobility of people). Starting fromthis latter level (system level) we will provide adescription for each dimension below. Figure 2provides a representation of FSO flexibility dimen-sions and their hierarchic order.

FIGURE 1 - A typical Field Service Delivery Process

Workforce System flexibility

Workforce flexibility refers to the capacity of aworkforce system to adapt/change effectively tovariations in the supply and demand of labour.Atkinson (1984) identifies the different practicesfollowed by organizations to achieve this goal (theso called flexible working practices) and defines

three types of flexibilities; functional, numerical,and financial.

Functional flexibility is defined as the capabilityof redeploying employees “quickly and smoothlyacross activities and tasks”. The functional flexibilitythat a firm can achieve, depends upon the numberof workers, how much they are cross trained across



tasks and how they are chained (MOLLEMAN;SLOMP, 1999; SLOMP; MOLLEMAN, 2002;RAPACCINI; VISINTIN, 2007; VISINTIN; RAPACCINI,2008). The need for cross training can be reducedby chaining workers appropriately. A “chain” canbe formed as a consequence of an assignmentdecision by connecting a group of tasks with serversto form a connected graph (JORDAN; GRAVES,1995). It implies that each task can be performed,at least, by two servers so that one server canbackup another in case of absenteeism oroverload. Chained servers, moderately crosstrained, usually allow a sufficient level of coveragewithout incurring in prohibitive costs (BRUSCO;JONES, 1998; AGNIHOTHRI; MISHRA, 2004).

Numerical flexibility is defined as the capabilityof increasing or decreasing the total number ofemployees and the number of the hours workedaccording with the actual need of labour. Numericalflexibility, in general, can be achieved through theuse of overtime and temporary workers (PINKER;LARSON 2003; MILNER; PINKER 2001).

Financial (wage) flexibility is defined as thecapability to align wages with employees’ andcompany performance. Financial flexibility can beachieved by adopting performance relatedremuneration systems where servers’ salarydepends on the skills they master, the actual hoursthey work, their personal performance and theoverall performance of the FSO.

FIGURE 2 - Flexibility dimensions and hierarchy

For the workforce flexibility, we now define RN,RH, M, and U respectively.

In the short term we consider the rangenumber (RN) of the workforce flexibility as the



number of different resource-task assignments thatis possible to make. Obviously the more the serverare cross-trained the more server-job matchingoptions are suitable to fulfil the demand. The rangeheterogeneity (RH) is represented by thedifferences among these options, having the lowestvalue when the desired coverage is obtainedmaking use of only dedicated server. The mobility(M) can be seen as the easiness with which thetask coverage can be changed and (or) adapted,as a consequence of demand peak orabsenteeism, making use of on-call workers andovertime, if necessary. Finally, the uniformity (U)can be thought as the capability of achieving auniform overall performance as a consequenceof different server-job assignments. In the long run,the range elements (RN, RH) of workforce flexibilityare given by the distribution of task coverageachievable by hiring or firing and trainings newservers. Accordingly the mobility (M) will berepresented by the time/cost needed to hire (fire)and train the servers or outsourcing some activities.The uniformity (U) is measured by the capabilityto maintain a satisfactory performance as aconsequence of the hiring (firing) of new servers.

Information System flexibility

For a FSO to be flexible, a flexible InformationSystems (IS) is required. A very useful definitionof IS flexibility is the one proposed by Gebauerand Schober (2006). They distinguish betweenthe so called “flexibility to use” an IS, defined as“the Range of possibilities that is provided by anIS until a major change is required” and “Flexibilityto change an IS” defined as “the effort required tochange a given IS after its initial implementation” .....They state that the former depends upon thefeatures supported by the IS, the scope ofdatabase, the different user-interface options, andthe overall processing capacity; while the latter isdetermined by both technical design choices (e.g.platforms and networking architectures,objectorientation paradigm adoption, etc.) and

availability of valuable IT staff skills. In our modelwe will take up these definitions, considering the“flexibility to use” as short term flexibility while the“flexibility to change” as long term flexibility. Inaddition, we will extend that definition to includeall four constituent elements. As a result, theflexibility Range for IS flexibility can be thought asto the number (RN) and heterogeneity (RH) ofthe general features (application layer) andGraphical Users Interfaces (GUIs, presentationlayer) that allows to collect, process andcommunicate the information, and the scope ofthe database (data layer) that allows to store them.The mobility (M) will be represented by theeasiness with which service related data(warranties, contract entitlements, inventory status,spare part availability, technical issues, etc.) canbe accessed and shared in real-time (or near realtime) by all the stakeholders (e.g. Executives,Contact Center and TAC operators, FEs, etc.). Theuniformity (U) is given by the capability to maintaina satisfactory processing capacity regardless theamplitude of the range. As a consequence, in thelong run, the IS flexibility range number (RN) willbe represented by the number and heterogeneity(RH) of possible changes, expansions, andupgrades the systems allow after their initialinstallation. The mobility (M) will be given by theeasiness with which changes, expansions andupgrades can be performed, while the uniformity(U) will be related to the capability of performingequally well as a consequence of the modifications.This capability is usually referred to as “scalability”(GIMARC; SPELLMANN, 2002).

Logistics Systems Flexibility

The logistics system flexibility should beassociated to both the firm’s “logistics systems”and to the firm’s “logistics products”. This isconsistent with the definitions provided by Kress(2000) and Barad and Sapir (2003). The “logisticssystems” are the material handling, thetransportation systems and depots/warehouses



that are used to handle and store a variety of“logistics products”. In the context of field servicethe “logistics products” are the material/spare partsnecessary to perform an intervention. Note thatthe spare parts’ versatility, defined as the capabilityof a given spare parts to be used for differentproducts/purposes, has been continuouslyincreasing. This is due to the growing adoption ofmodularity and other design techniques aimed atsimplifying the inventory management andreducing service costs (LELE, 1997; GOFFIN; NEW,2001). However, unlike the OEMs, the FSOs arenot directly responsible for the product/part design.Hence, we won’t consider this aspect in our model.Consequently, in the short term, the logisticssystem Range element of flexibility is representedby the number (RN) and heterogeneity (RH) ofdifferent picking/transport/delivery missions thesystem is able to perform. For example, a hybridvehicle fuelled with electric power as well as gasthat allow the FEs to travel in protected areas suchas historical city center is more flexible than avehicle fuelled with only gasoline. Accordingly, themobility (M) of the logistics resource can bemeasured by the set up time and/or cost to sustainin order to re-configure the system for the missionto be accomplished. Mobility can be thusrepresented by the time/cost needed to adapt thesystems to handle/store different packages (as aconsequence of different local regulation forpackaging recycling), pallets (due to differentoverall weight or size of spare parts), to reconfigurevehicles etc. Finally, the uniformity (U) can be seenas the capability to maintain a satisfactoryperformance as a consequence of themodifications. In the long run, the range elementsof flexibility of the logistics system can be thoughtas the number (RN) and heterogeneity (RH) ofdifferent parts the systems could be able tohandle/store and thus the number of differentmissions they potentially could perform. Themobility (M) will thus be related with the capabilityto make changes needed to allow the new

missions to be accomplished. The uniformity (U)is related with the capability of achieving satisfactoryperformance as a consequence of the change.

Call Handling and Technical Assistance functionflexibility

The call handling function involves serverswhose tasks are (i) to take customers’ call (or toget their complaints through other channels) andidentify the customer and the products; (ii) toprovide a remote support aiming at fixing theproblem remotely (the so-called call avoidanceprocess); (iii) to dispatch one or more FE toperform the on-site intervention if the problem isnot fixable remotely; and (iv) to close out the call.For very small FSOs these tasks are all performedby the same people. For bigger FSOs, the callhandling activities are performed by contact centeroperators, while the technical assistance anddispatching are performed by trained operators(usually experienced FE) working in well equippedTechnical Assistance Center, to whom the callsare put through. The decoupling of these twoactivities is usually recommended because of thefact that the call handling activities don’t requireparticular skills and are quite easy to perform.However, an effective remote support can beperformed only by an operator with a strongproduct knowledge and the ability to accuratelyidentify the problem and hence dispatch an FEwith right skills. The TACs operators also provideremote support to the FEs working on customer’ssite.

The flexibility of the Call Handling and Techni-cal Assistance function can be defined as the ca-pability of providing the customer with a high num-ber (RN) of heterogeneous (RH) channels to in-teract with the FSO according with her/his prefe-rence. These channels can be subdivided in syn-chronous (telephone, text-chat, web collaborati-on) and asynchronous (e-mail, voice mail, fax,SMS). The mobility (M) can be considered as thecapability of switching, if required, from one chan-



nel to another, even in progress (for example pro-viding support by phone if the customer has pro-blem interacting via text chat etc.), while uniformi-ty (U) can be considered as the capability of achie-ving a uniform performance in terms of call avoi-dance/customer satisfaction regardless thechannel(s) adopted.

The Call Handling and Technical Assistancefunction’s flexibility is enabled by IS such as CRMsolution for the IP-network multi-channels contactcenter, ACD applications for the skill-based rou-ting of calls from the contact center operator tothe TAC operators, and shared knowledge basesystem (KBS) where all the operators can easilyretrieve technical information, lessons learned, etc.to provide a consistent support even if the requestsare handled by different operators. The task cove-rage among the operators (especially in the TAC)is very important as well. A flexible team of TACoperators, coupled with flexible IS supporting theaforementioned functionality, allows the contactcenter to be very efficient in dealing with the un-certainties affecting the incoming service requestseven with few operators. For example, Griffin(2004) reports how the pharmaceutical giant Gla-xoSmithKline answers 10,000 customer queriesper month, primarily by phone and email with lit-tle more than a dozen agents.

In the long run the Call Handling and Techni-cal Assistance function flexibility can be seen as

the capability of introducing, without remarka-ble efforts (M), a wide (RN) and heterogeneous(RH) number of solutions to support the com-munication between the customers and the FSO(and between the FEs and the TAC). Finally,the uniformity (U) can be seen as the capabili-ty to achieve a satisfactory performance as aconsequence of the introduction. The long runflexibility is obviously connected with the scala-bility of the IS as well as the long run flexibilityof the workforce. For example, Griffin (2004)reports that FSO are facing remarkable difficul-ties training off-shore contact center operatorsto interact with customers in written language,as a consequence of the introduction of the e-mail as a support channel.

Logistics and Material Support function flexibility

As stated by Blumberg (1994), 60 to 75 per-cent of all service requests require parts to be fil-led in addition to some technical skills. An optimalservice logistics “pipeline” should comprise themanufacturer (or vendor) of the parts, nationalwarehouse, district depots, field-level depots (lo-cated both at customer site and in server’s vehi-cles) and refurbishment centers. All of these ele-ments should form a closed loop with parts andmaterial flowing both from and to customer’s sitewith flows of parts occurring also at same echelon(see Figure 3)



FIGURE 3 - FSO’s Logistics System pipeline (Source: adapted from Blumberg, 1994)

Blumberg (1994) estimates that normally,nearly 50 percent of the inventory can be foundat field level, approximately 80 percent in value ofthe inventory flows back to be refurbished and 30to 35 percent of the return loop flows is made ofgood units. This data shed light on the importanceof managing parts efficiently along the pipeline.However, in field service, request for parts can varya great deal over the time and are very difficult toforecast. These uncertainties require the LogisticsFunction and Material Support to be very flexible.

In the short term, we consider the flexibility ofthis function given by the number (RN) andheterogeneity (RH) of different possible optionsto re-supply in the field. This depends on thenumber of sources that potentially can supply theFEs (e.g., regional depots, national warehouses,other FEs etc.), the number of different means oftransportation that can be used to deliver parts

(e.g., own vehicle, same day courier, next daycourier etc).

Correspondingly the mobility (M) is given bythe easiness (time/costs) with which stocktransfers between depots/warehouse (at the sameor different echelons in the pipeline) can bedynamically performed on the basis of the realtime information coming from the field. Thecapability to quickly transfer parts betweenlocations (referred to as trans-routing flexibility byBarad and Sapir, 2003) allows to reach a desiredoverall service level (in terms of fill rate) reducingthe need of inventory buffer. An extremely flexibleway to re-supply is to use “roving vans” (Blumberg1991 p. 168). These vans store spare parts andoperate in important metropolitan areas and aredispatched to customer site to deliver parts to theFEs. Using this approach the need for parts isidentified during the call handling process, and if



the required items are not conveniently availablefor the FE (in his vehicle or in local stock) they aredirectly delivered to the customer site to be usedby the FE. Mobility is enabled by IS (in particularERP/SCM) for the material and inventorymanagement, which allows to have a full visibilityof the stock level in the entire pipeline and areable to trigger the transhipment process whenevera shortage occurs. Finally, the Uniformity (U) canbe related to the capability of the logistics systemto perform well (in terms of fill rate, costs, etc)regardless of how the parts are delivered, In thelong term, the Logistics Function and MaterialSupport flexibility can be thought as the capabilityto accommodate major improvements of thelogistics pipeline. These improvements pertain tostructural changes aiming at accommodating (orstimulating) new business opportunities. TheRange elements of logistics flexibility can be thusseen as the number (RN) and heterogeneity (RH)of these improvements (modifications on thewarehouses number, improvements in the vehiclefleet, adoption of roving vans, outsourcing of thelogistics operations to 3PL, 4PL in certain territoriesetc..). The mobility (M) can be represented by thecost/time required to realize them (that can bereduced using specific application for the demandforecasting and resources capacity planning). Theuniformity (U) can be related with the capacity tomaintain a satisfactory performance as aconsequence of these improvements.

Field operations flexibility

The field operations are carried out by a teamof Field Engineers (FEs) performing a set of diffe-rent tasks, at customer’s site, on the basis of aschedule they are assigned usually by a TAC ope-rator. For industry with a huge i-base (such as theutilities one) and a high number of FEs, the jobprioritisation and the dispatching and routing acti-vities are automatically performed by specific sof-tware applications. The most sophisticated appli-cations for the scheduling optimization available

in commerce are able to take in to account a wideset of different variables/constraints. These varia-bles can be the customer location, the customerSLA, the magnitude of the customer problem, theFEs skills required to perform the intervention, theFEs daily workload, the parts availability, the cus-tomer preference about the time window to re-ceive support and the customer preference aboutthe modality to provide support. The on-site su-pport, in fact, can be provided in several ways in-cluding (a) the dispatching of a FE with the requi-red skills/part at customer site; (b) the deliveringor storing of parts directly at customer site for theFE (or customer with TAC remote support) to per-form the repair when a failure occurs, and (c) thecoordinated dispatching of FEs and parts to custo-mer site. In the short term the Field Operationsflexibility range can be thus defined as the num-ber (RN) and heterogeneity (RH) of the optionsavailable to provide on-site support to the custo-mer (in terms of time window, responsiveness,server and modality). The mobility (M) can bethought as the capability to switch from one opti-on to the other, even in progress, as a consequen-ce of unanticipated change in the environmentalcondition (the temporary unavailability or delay ofa FE, a traffic jam, the need of another FE to com-plete the job on time etc) or the occurrence of anew and more urgent task (that may require a FEalready dispatched for another job). A high Mobi-lity is enabled by the so-called field service mobi-le technology (PDA/smart-phone with GPS syste-ms etc., see section 5) that allows a full visibilityof the FSO resource in real time. Finally uniformity(U) can be seen as the capability of obtaining asatisfactory performance regardless the way follo-wed to provide support. In the long run the FieldOperations flexibility could be associated with thecapability of modifying the range number (RN)and heterogeneity (RH) of options available toserve the customers without incurring in prohibiti-ve costs (M) and maintaining a satisfying perfor-mance (U).



Volume flexibility

We consider volume flexibility as the capabili-ty of the FSO to cope with uncertainty in the volu-me of service requests. In the short term, uncer-tainties arise as a consequence of the difficultiesto forecast the distribution of the calls arrival wi-thin the day. In the long term, uncertainties ariseas a consequence of the variation in the aggrega-te level of demand that occurs because of expan-sions or the aging of the i-base. These uncertain-ties make the servers and parts requirements plan-ning very difficult. Capacity buffers (more servers)and inventory buffers (more parts) could help al-though their utilization is often problematic. Thehigh cost of labour and the time needed to trainservers, make capacity buffer an expensive opti-ons and the obsolescence risks associated withcertain kinds of spare parts (especially in high-techsector like the computer industry) make inventorybuffers costly as well. Volume flexibility is therefo-re strongly needed. Adapting the Koste andMalhotra’s (1999) definition, volume flexibility canbe defined, both in the short term and long term,considering the range number (RN) as the rangeof variation on the aggregate number of servicerequests that the FSO can accommodate (withinthe day and in the long run, respectively) and therange heterogeneity (RH) as the extent to whichthe demand vary uniformly for all service reques-ts. A high heterogeneity originate when an increa-se in service requests comes only from some speci-

fic products (for example as a consequence of adefective component) or territories (for exampleas a consequence of an environmental disaster)making the resource planning even more compli-cated. The mobility (M) can be thought as theeasiness with which change in the service reques-ts volume can be accommodated (a flexible work-force in this case is strongly needed due to thenecessity to add servers for the specific task to beperformed). The uniformity (U) can be thoughtas the capability of performing equally well regar-dless the changes in the service requests’ volu-me.

Mix flexibility

In order to define the FSO’s service mix flexi-bility, it is necessary to define what should be con-sidered as service mix or “service portfolio”. For aFSO the service portfolio should be defined on amulti-dimensional basis (BLUMBERG, 1991 p.122). It is necessary to consider (a) the “serviceproducts”, that is, the different services a FSO isable to provide (maintenance, training etc..); (b)the delivery time and coverage, that are the daysof the week and the hours of the day when theFSO is able to provide a certain service; (c) theresponse time, that is the time required to delivera certain service as a consequence of a customercall; and (d) the different equipments and territo-ries the FSO is able to serve. A conceptual modelfor classifying a generic field service portfolio isproposed in Figure 4.



FIGURE 4 - Service portfolio for Field Service Organization (Adaptedfrom Blumberg (1991)

In the short term, service mix flexibility can bedefined considering the range number (RN) andheterogeneity (RH) elements represented by theamplitude of the service portfolio. The mobility(M) can be considered as the capability ofeffectively schedule the interventions and deploythe resources necessary to accommodate the dayby day changes in the actual mix of services toprovide. Mobility is very complex to achieve, sinceit requires coordinating a high number of resourcesspread on wide geographic area to provide daily avariable set of routine and emergency services,under strict internal and external constraints. Finally,the Uniformity can be seen as the capability ofmaintaining a satisfactory performance in termsof customer satisfaction and SLA compliance,regardless of the daily changes in the service mix.

In the long term, as FSOs increase theirexpertise in managing complex service portfolio,they usually try to get new revenue streams andprofits expanding their offer. Typical expansionsare (a) the provision of new “services products”on the current customer base; (ii) the provision ofthe same “services products” but on the basis of

new SLAs (that is the offer of a broad deliverytime coverage and/or a faster response time); (b)the provision of field service as third partymaintenance vendor to new customers; (c) theexpansion on new territories; or (d) a combinationof these. The Range element of flexibility can thusbe considered the number (RN) and heterogeneity(RH) of the aforementioned possible expansionsthe FSO could achieve (and thus by the amplitudeof the resulting service portfolio). Accordingly, themobility (M) represents the easiness with whichthe expansions can be accommodate and theuniformity (U) the capability of delivering the newservices mix as well as the pre-existing ones. Wecan notice that, mix flexibility and volume flexibility,jointly define, in the short term, the operationalflexibility of the firm and in the long term its strategicflexibility.

CONCLUSIONS

In this paper, we propose a conceptual modelfor studying field service flexibility, defining andordering hierarchically the most relevant flexibilitydimensions. The model can help managers to


R. Adm. FACES Journal Belo Horizonte · v . 8 · n. 4 · p. 80-97 · out./dez. 2009. ISSN 1984-6975 (online). ISSN 1517-8900 (Impressa) 9 5

make investments and develop business practicestargeted at improving the field service flexibility.

Our model has important implications forresearch as well. Service literature, in facts, lacksin model for studying flexibility.

The future research could be extended in twodirections. First, it is strongly needed an empiricalvalidation of the conceptual model, targeted atverifying the relevance of the dimensions proposed

and their hierarchic relationship. Second, once therelevance of the proposed dimensions is proved,a measure for quantitatively evaluating the relevantflexibility should be developed. A robust metric tomeasure flexibility, in fact, would be helpful toassess the trade-off between the cost and benefitsof flexibility and to assess when and how muchflexibility is actually needed.

Filippo VisintinUniversity of Florence – Dipartimento di Energetica

“Sergio Stecco”Via Cesare Lombroso 6/17, 50134

Florence, ItalyPhone: +39-0554796736 Fax: +39-0554224137

[email protected]

Mario RapacciniUniversity of Florence – Dipartimento di Energetica “Sergio

Stecco”Via Cesare Lombroso 6/17, 50134

Florence, ItalyPhone: +39-0554796709 Fax: +39-0554224137

[email protected]

>

Recebido em: jul. 2009 · Aprovado em: nov. 2009



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