Service Science in China

The advent of the service economy era has been widely accepted. Nonetheless, what is exactly the service economy and what will a service economy era be? When the tide of service economy is sweeping across the major developed countries and spreading to the moderately developed countries and even the developing countries across the world, it is just knocking at the door of a new era. Has China, as a global factory, been well prepared for the new era?

Every new discipline comes into being and flourishes under a special historical background and shoulders its unique historical mission in different phases of human society. The era of service economy is a milestone in the development of the human society, and it entails the instructions of corresponding emerging subjects in this new phase of social development; service economy itself lays the essential foundations for the development of emerging subjects. Such special background gives rise to the Service Science. Particularly, there has been a constantly intensifying trend of global economic integration with the development of internet economy, resulting in the unprecedented information communication among various countries. Governments, academia, and business of different countries have been aware of the development trend of the history and collaborate to promote the new discipline of Services Science. However, Service Science is bound to encounter numerous challenges in its initial phase due to its brief history.

Service is the dominant economic activity in the service economy era, including service activities in agriculture and manufacturing in addition to those in service sector. Service can integrate in an organic manner the international and social R&D, design, processing and manufacturing, sales and after-sale service, brand service as well as each link and activity of the entire value chain, thus capable of further deepening social labor division and cooperation, reducing social transaction cost and improving allocation efficiency and effects of social resources (Guo 2008). Such industries as service, manufacturing and agriculture will be mutually blended by means of service activities as a bridge. In view of the above, “Service Science”, as the basic theoretical system in support of economic development, focuses upon service activities including all service activities that serves to promote the production efficiency of the whole society besides those in service sector. The essential understanding of service activities lays a foundation for exploring the connotation of Service Science. Starting from the definition and characteristics of service, this chapter will give you a general picture of the discipline connotation of Service Science and introduce the value of related disciplines for Service Science as a supplementary explanation.

When used to elaborate the laws of service management, the management theory based on traditional manufacturing industry does not hold water and is thus encountered with a series of new problems due to typical characteristics of service activities, such as Intangibility, Perishability, Simultaneity and Heterogeneity. The production and operation management theory of traditional tangible products proves to be more inadequate especially for analysis on intangible service operation practice. Therefore, most predecessor scholars took service operation management as the entry point, explored special laws of service activities, captured basic features of service operation management and applied corresponding research results to service marketing, service innovation and other fields to promote the development of service management theory. As an emerging discipline, Service Science takes service activities in the service economy era as major research objects. Not only should it take the particularity of service activities into consideration, but it should fuse with applied theory of modern information technology against the background of the new age. Its disciplinary research system should inherit and develop the traditional service management theory. Based on the main characteristic of interactive contact between service providers and receivers in service activities, this book starts from the interactive service activities, analyzes the content and features of the elements of service operation management, and combs through the cognitive system of predecessors on the management framework of service operation. Besides, a research system of service science with management as the main line was put forward on the basis of the practice and research results of the service economy age.

Since the twentieth century, business circles have gradually become the mainstay propelling the society progress. Answering the philosophical questions about the direction of social progress is no longer the task of governments, schools and churches only. Enterprises should also play an important role, and answer these philosophical questions with practical actions. The centennial development of enterprises has proved that the scientific and reasonable construction of the missions for enterprises to propel the social progress constitutes the foundation for enterprises to last long. In the service economy era, the top issue facing service enterprises, if they want to create profits by providing service activities, is to identify their service philosophy and answer the question on the basis and direction of enterprise’s existence and development from the philosophical perspective, including the construction of enterprises visions to show the development directions of the enterprise, identifying the social responsibilities to deal well with the relation with other social bodies and planning strategically to be a beacon of strategic thought for the service activities development.

Through service vision construction and service strategy orientation, service promotion has entered a new stage in which analytical tools related to service science are applied to allocate and arrange the existing resources of service enterprises, making early-stage preparations for service delivery. In the stage of service resource allocation, service enterprises should innovate in the integration mode of service resource in accordance to the resource advantages, the characteristics of target customers, and the framework of strategy planning. Service product innovation and commercial mode innovation are the two major choices of service innovation. With the guideline of innovation, service enterprises should firstly make reasonable allocation of the resource of internal service system, including service products, processes, organization and environment design; then they should extend externally the highly-efficient and reasonable allocation method as well as the enterprise impact. Most enterprises adopt the method of service network planning that enables them select branch locations as well as arrange service network with scientific and sensible method. Additionally, some service businesses, in virtue of external resources, improve their service alliance by cooperating with enterprises of the same industry or upstream and downstream industries.

Both the service philosophy and resource allocation belong to first-phase preparation for service delivery. Service operation is the actual operation phase of service delivery, and the key to the transformation from competitive advantages created in the phase of resource allocation to actual competitive capacity, for it determines the degree of realization of the service philosophy. Owing to the simultaneity of production and consumption, service delivery can only be realized after customers enter service establishments, thus service marketing becomes the primary task of service operation; particularly in such an age of service economy with typical characteristics of network, brand marketing, relationship marketing and Multi-Channel marketing become more eminent. Service process experience becomes an important part of service operation management, for customers will experience queuing and waiting, interaction with other customers, and interaction with service staff after entering service establishments. After service consumption is completed, customers will evaluate the service quality based on their service expectations and the actual quality perception. Therefore, formation mechanism, evaluation, and control are three important factors to be given consideration in service quality management. The sustainable delivery of services is based on profit maximization, thus in service revenue management, service enterprises, challenged by non-storability of services and volatility of demands, should adopt appropriate methods, balance service supply and demand, and realize service profit maximization.

After the founding of the Yuan Dynasty, Kublai Khan reunified China and decided to compile a new exact and unified calendar to guide agricultural production. The task was assigned to the Astrological Commission, and the work of calendar revision was in the charge of Guo Shoujing and his classmate Wang Xun. Once the work of calendar revision started, Guo Shoujing put forward that priority should be given to observation to study calendar, while the observation must depend on meters. The large-scale armillary sphere transported from Kaifeng for astronomical observation had been obsolete, and they could no longer obtain reliable data. Besides, its structure was complex and not easy for use. Guo Shoujing designed a set of simply-constructed instruments with precise scale mark easy to operate. The new instruments created solid foundation for realizing on-the-spot observation. In 1279 A.D., the study of Wang Xun and Guo Shoujing was accepted and recognized by Kublai Khan. The expert group built a new observatory in the courtyard of Astrological Commission and set 27 large-scale observation points around the country. The northernmost observation point is in Tiele (today’s Yenisei river valley in Siberia) and the southernmost point is in South China Sea (on today’s Xisha Islands). There were 14 monitoring officers selected and assigned to different places to observe, and Guo Shoujing also led some people in person to observe in important observation points. All of the data collected from different observation points were aggregated in the Astrological Commission. Delicate instruments and precise measurement finally rewarded Guo Shoujing and his people with large amount of reliable data, based on which the Shoushi Calendar was compiled. The calendar was much more precise than the previous one in that it calculated that there are 365.2425 days in a year, which deviated from the time for the earth to make one full orbit around the sun for only 26 s. The cycle calculated in the calendar is the same with that of the Gregorian calendar (the one is today’s use) which was compiled 302 years after.

In the service economy era, modern service industries are the leading industries of economic development. Modern service industrial system is a newly-emerging service industry originated from the advanced stage of industrialization, which consists of the traditional service industries that have been reshuffled by modern information technology and advanced management modes. According to the data of 2010 Statistical Yearbook of China, the wholesales and retail, transport, postal and storage, financing, and real estates were ranked the top five in terms of the added value in the tertiary industry. Actually, the five industries emerged in the primary stage of industrialization or even in the days much before that stage. Currently, they become the key industries of Chinese service industry for two reasons. Firstly, the market demands are released continuously. Secondly, these industries have been reshuffled by modern information technology and advanced management modes in various forms and to various extents. They have become the important components for modern Chinese service industrial system. Moreover, in the process of adopting the principle of market, because of the pressure of competitions, the industries of retail, hospitality, aviation and banking keep exploring scientific management and operations with great efforts and set out on a path to service science application with Chinese characteristics.

According to Rostow’s the stage theory of economic development, emerging service industry refers to the newly-born service sectors in high demand and fast development which were basically blank or in small scale prior to the industrialization, appeared or evolved at the advanced stage of industrialization, and saw rebirths along with the development of information technology, emergence of knowledge economy, refining of the social division of labor and upgrading of consumption structure. China has just entered the second half of the Middle period of industrialization, and the emerging service industries are ready to thrive just like buds waiting to bloom although China is still at the initial stage. At present, the development of service economy is typically characterized by the progress and application of modern information technology, which results in the significant feature of information for the emerging service industries. With the speed of development, development potential and importance as the criteria for selection, this chapter delves into the application of service science to the emerging service industries by analyzing such typical industries as express delivery, call center and service-oriented manufacturing: China boasts a large population and a vast territory and features increasingly frequent market trades, thus posing a tremendous demand for the industry of express delivery. Moreover, the fast development of E-commerce since the new century stimulates the rapid expansion of demand for express delivery in China, which has become a major pillar sector for online economy; with the development of communication technology and the increasing importance of the customer service function for enterprises, call centers, transferring intangible services relying on communication technology, have been springing up like mushrooms, on the one hand developing into an indispensable auxiliary role for the development of other service industries and on the other hand gradually evolving into an independent emerging industry. Presently, China is still in the process of industrialization and has not entered the era of service economy. The manufacturing industry plays a pivot role in the national economy despite the rapid development of the service sector. The transformation of the manufacturing industry into service industry accounts for an important part of China’s industrialization process, giving a powerful impetus to the development of service economy. Different from the traditional service industries, service-oriented manufacturing is more than simple manufacturing and in this book, an independent introduction will be provided by treating it as an emerging service industry.