8. Service Supply Chains

While there are some fundamental differences with physical supply chains, service supply chains also suffer from lack of transparency and agility. In the absence of a physical product, the focus is on better management of capacity. While product supply chains focus on economies of scale and efficiency through materials management, service supply chains focus on economies of scope and effectiveness through capacity management. A simple queueing model, which identifies the drivers of the trade-off between customer experience and cost to serve, is also used to propose ways to mitigate that trade-off. Dynamic policies that price out remaining capacity as well as platforms that match supply with observed demand in real time are also illustrated through industrial applications.