I was particularly interested in the Process Structure and Strategy section of Chapter 2.\u00a0 My post will begin with an overview of key concepts and terms.\u00a0 Following this, I will briefly\u00a0introduce a report from McKinsey and Company on automation’s anticipated impact on work.\u00a0 Finally, I will attempt to bridge the key concepts and terms from the textbook to McKinsey’s analysis.<\/p>\n
Krajewski and colleagues make a distinction between the process structure in service companies vs. manufacturing\u00a0companies.\u00a0 Both of these matrices are based on the same overarching factors, (1) level of customization, and (2) nature of process flow.\u00a0 For the purposes of this post, I will primarily be focusing on the process structure that exists in services, but it is important to note that many firms have both service and manufacturing aspects.<\/p>\n
In regards to services, the textbook uses the “customer-contact matrix” to evaluate service-orientated process structures.\u00a0 The authors describe customer-contact as “the extent to which the customer\u00a0is present, is actively involved, and receives\u00a0personal attention during the service process,” (52).\u00a0 In the service-oriented matrix, customer contact is a proxy for the degree of customization required for each customer interaction.\u00a0 Let’s use the Ritz-Carlton as an example to flush out this idea more.\u00a0 On one end of the customer-contact\/customization spectrum sits the concierge at the Ritz-Carlton in New York City.\u00a0 The concierge is a physical presence at the hotel and delivers personal attention to hotel guests.\u00a0 Furthermore, the hotel concierge’s services are highly customized to meet each guest’s needs and workflow to deliver exemplary service to each guest is highly individualized\u00a0 The customer-contact matrix categorizes the hotel concierge as a front office position.\u00a0 On the opposite end of the spectrum from the concierge sits an employee that manages the payroll for Ritz-Carlton employees.\u00a0 This individual likely has little to no interaction with customers and performs a rather standardized process for each employee.\u00a0 The customer-contact matrix describes this type position as “back office.”\u00a0 In between these two extremes exist “hybrid office” positions, roles that require processes “with moderate levels of customer contact and standard services with some options available,” (53).<\/p>\n
The book provides some color on the role of automation in service processes.\u00a0 For instance, Krajewski et. al. suggest that automation can reduce service costs in similar ways that it can reduce manufacturing costs.\u00a0 Furthermore, automation can improve quality by increasing consistency.\u00a0 The authors do caution that volume is often needed to justify expensive capital expenditure on automation technologies.\u00a0 Given how quickly robotic automation and artificial\u00a0intelligence have developed (and will continue to develop), I would like to introduce a recent McKinsey article on the impact of automation technologies on jobs, skills, and wages.\u00a0 “Where machines can replace humans\u2014and where they can’t (yet) ” can be found by following this link<\/a>.\u00a0 I highly recommend taking the time to read the full article, but I will provide a few key takeaways and relate them back to the customer-contact matrix discussed in the preceding paragraph.<\/p>\n The McKinsey article does not only examine specific jobs that could be replaced by existing automation technologies but examines over 2000 specific tasks and determines whether or not which parts<\/span> of jobs can be automated.\u00a0 One of the article’s most powerful statistics estimates that, on average, “one-third of the time spent in the workplace involves collecting and processing data,” (McKinsey 2017).\u00a0 For the purposes of this discussion, I’d like to highlight one other aspect of the McKinsey article: the types of processes and tasks that can be automated with existing technology, and those that can not.\u00a0 For example, physical labor in predictable environments, data collection and processing, and transportation and logistics present the easiest opportunities to automate.\u00a0 The article suggests that the activities that will be the most difficult to automate “involve managing and developing people,” (McKinsey 2017).\u00a0 Furthermore, activities involving decision-making and creativity have the least automation potential after the management and development of people.<\/p>\n I’d like to draw a connection to the textbook material and the textbook’s customer-contact matrix in regards to the distribution of jobs across the front, hybrid, and back office work.\u00a0 I would be curious to know learn about specific data across each of these distinctions, but in general, it seems reasonable to expect that the back office work\u2014work that requires little customer interaction, little management of people, minimal creativity, and predictable workflows\u2014is ripe for automation.\u00a0 The number of “back” office is likely to decline significantly as automation is adopted by companies to cut costs and decrease the likelihood of human error.\u00a0 Furthermore, as the McKinsey article insinuates, the concierge role is likely to change as well.\u00a0 There will still be a need for a concierge, but some of their tasks will likely be aided by automation technologies.\u00a0 I am especially interested in the distribution of jobs across these classifications because it seems likely that, as companies save money on back-office positions, there will be additional money to spend on front-office and service-oriented positions.\u00a0 This means that the Ritz-Carlton can provide an even higher level of service (via a greater number of concierges), and even that some lower-end hotel chains might have additional resources to budget toward the implementation of front-office, service-oriented positions.<\/p>\n","protected":false},"excerpt":{"rendered":" I was particularly interested in the Process Structure and Strategy section of Chapter 2.\u00a0 My post will begin with 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