Service Science, Management, and Engineering:: Theory and Applications

Index

Chapter 1

Overview of Service Science, Management, and Engineering

Zhen Shen, Dong Shen, Gang Xiong and Fei-Yue Wang

State Key Laboratory of Management and Control for Complex Systems, Institute of Automation, Chinese Academy of Sciences, Beijing 100190, China

The economies of the world are shifting labor from agriculture and manufacturing sectors to service sectors, as measured by percentage of labor (jobs) (Maglio, Srinivasan, Kreulen, & Spohrer, 2006). This makes researchers pay more attention to the service sectors, and the concept of Service Science, Management, and Engineering (SSME) becomes more and more popular. IBM regards SSME as the next trend in college and professional education (International Business Machines Corporation [IBM], 2008). SSME is believed to play an important role in the future world. In this chapter, we try to explain the following: (1) what SSME is; (2) why it is important; and (3) how to apply SSME to several kinds of real world problems.

1.1 What Is SSME?

The term Service Science, Management, and Engineering (SSME) was introduced by IBM to describe an interdisciplinary approach to the study, design, and implementation of a services system to provide value for others by suitable arrangements of people and technologies (Hefley & Murphy, 2008; IBM, 2008; Spohrer & Maglio, 2008), where an elementary concept service is involved. There are various definitions of service, for example, …a result that customers want, …sometimes referred to as intangible goods; one of their characteristics being that in general, they are ‘consumed’ at the point of production, …consumer or producer goods that are mainly intangible and often consumed at the same time they are produced… service industries are usually labor-intensive, intangible products, a set of intangible activities carried out on [the customer’s] behalf, any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything, invariantly and undeviatingly personal, as something performed by individuals for other individuals, …a change in the condition of a person, or of a good belonging to some economic unit, which is brought about as the result of the activity of some other economic unit…, and economic activities that produce time, place, form, or psychological utilities (Sampson & Froehle, 2006). We take the viewpoint of Vargo and Lusch and define service as the application of competences (such as knowledge and skills) by one entity for the benefit of another (Vargo & Lusch, 2004, 2006, 2008; Vargo, Maglio, & Akaka, 2008). Around the concept of service, science means what service systems are and how to understand their evolution, management means how to invest to improve service systems, and engineering means how to invent new technologies that improve the scaling of service systems (Spohrer, Maglio, Bailey, & Gruhl, 2007).

In national economic statistics, the service sector usually refers to those that are not in the agriculture or manufacturing sectors. In contrast to providing goods in the agriculture and manufacturing sectors, knowledge and skills are provided from one party to another in the service sectors. Examples of service sectors are many, such as tailoring a suit for a customer, teaching a class, and consulting. It appears that the service sector plays an important role in the national economy while a country develops. According to the study by Spohrer and Maglio (2008), in the year 2003, 50% of the labor force of China was in agriculture, 15% in goods production, and 35% in services. When compared with the year 1978, the percentage change of the labor force of China in service sectors was increased by 191%. Nevertheless, in the United States, the labor forces in agriculture, goods production, and services were 3%, 27%, and 70%, respectively, in the year 2003. Over the past three decades, service sectors have become the largest part of most industrialized nations’ economies (Spohrer et al., 2007). According to a report of the National Academy of Engineering of the United States (US National Academy of Engineering, 2003), the service sector accounted for more than 80% of the US GDP in the year 2003 (Spohrer et al., 2007).

With the rapid development of service economics, related topics on service deserve more and more study. This is why many researchers turn to develop a general theory for SSME. There is no doubt that SSME is important for our daily life. Here, we want to give more descriptions on some specific points, which may play a significant role in the research of SSME.

1.1.1 Information and Communication Technology

The first point that we want to emphasize here is about information and communication technology (ICT). It is believed that ICT will play an important role in SSME. ICT is often used as an extended synonym for information technology (IT), but it stresses the integration of telecommunications, computers, middleware, and necessary software, storage, and audiovisual systems. It is a term that includes any communication device or application, such as radio, television, cellular phones, and computer and network hardware and software. Because of the development of ICT, the spread of knowledge and skills becomes much faster and easier. The provision of service has low cost. One example is the search engine, which makes companies such as Google and Baidu very successful. Another example is the e-commerce systems for which Amazon is the most famous. These giant corporations were hardly known about 10 years ago, but now they play an important role in our daily life.

When talking about service and ICT, we have to introduce the concept of cloud computing (Armbrust et al., 2009; Buyya, Yeo, & Venugopal, 2008; Li, Chen, & Wang, 2011; Wang & Shen, 2011). Cloud computing is the delivery of computing as a service rather than a product, where resources, software, and information are provided to end users as a utility over a network. For cloud computing, the end users do not need to know the physical location and the configuration of the system or, rather, they do not need to have knowledge about the system. Usually, the end users only need a web browser to enjoy the service provided by the compute clouds. This is similar to the electricity grid in that end users do not need to understand the infrastructures or the devices that produce and transfer the electricity.

The three models of services in cloud computing are as follows: Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). IaaS delivers the virtual IT resources such as storage and computing and networking capability to the end users. PaaS delivers a computing platform together with necessary software subsystems or components to the end users. PaaS may offer facilities for application design, development, testing, deployment and hosting as well as application services such as database integration, team collaboration, and application versioning. SaaS, as the name indicates, delivers software as a service, which makes end users free of the need to install and run applications on their own computers and simplifies maintenance and support.

There are many advantages of cloud computing. Cloud computing can provide on-demand service to end users. The users do not need to buy hardware or software. They only need to apply for resources according to their needs. The users can access the system using a web browser regardless of their locations or what device they are using. The maintenance work can be left to the provider. And the provider can distribute the servers at different places, and the reliability can be guaranteed. There are many successful stories of cloud computing including Amazon’s Elastic Compute Cloud (EC2), Apple’s iCloud, and Microsoft’s Windows Azure.

1.1.2 ACP Theory

In the era of providing services by compute clouds, new methodologies are desired to solve complex problems in the real world. Besides the basic services of weather report, news report, finding a telephone number, and a suitable restaurant, we have more complicated requests such as finding a suitable route while driving a car and consulting for special knowledge on managing a factory. It is believed that ACP (Wang, 2004a, 2004b, 2004c, 2010a) is a suitable approach for providing more intelligent solutions for service requests. What ACP stands for is Artificial systems, Computational experiments, and Parallel execution. As the name indicates, the three steps of ACP are as follows: (1) modeling and representation using artificial systems, (2) analysis and evaluation by computational experiments, and (3) control and management through parallel execution of the real system and artificial systems (Wang, 2010a). In the ACP approach, key characters of the real system are considered in modeling, and the artificial system can create an electronic copy of the real world; various methods may be used for the evaluation and optimization of the artificial system; for parallel execution, the real system and artificial systems interact with each other; the results of the computational experiments are applied to the real system, and the real system is used to calibrate and verify the artificial system.

The ACP approach has been applied to the transportation system (Z.J. Li et al., 2011; Shen, Wang, & Zhu, 2011; Wang, 2004c, 2010a; Wang & Shen, 2011; Xiong et al., 2010). In particular, it has been used for the transportation management and guidance service for the 2010 Asian Games.

Cloud computing and the ACP approach share the same idea of considering the system as a whole. With the development of Internet of Things (IoT), which can connect identifiable objects (things) together by their virtual representations in the computer, collecting real world information becomes easier. With the information, an artificial system can be built. With the powerful computing infrastructure in the compute clouds, the computing experiments can be done and the experiment’s results can be delivered as services to the end users to guide the real systems.

1.2 Why Do We Need SSME?

The service sector usually becomes more and more important as a country develops. The research of SSME may make our world better and have a great impact on our life. We use the example of e-banks as an explanation. As we know, the bank is closely related to our daily life. People can deposit spare money in the bank for safe keeping and interest and get loan from the bank for expanding production or other needs. This is the main utility that the bank offers to us. However, with the development of ICT, e-bank service now plays an important role. E-banks, also known as web banks or online banks, can provide the end users many kinds of services by Internet, such as querying, reconciliation, transferring, credit, Internet securities, investment, and financing. In other words, e-bank can be regarded as a virtual bank counter but with more convenience. Therefore, e-banks are also called 3A banks, because they can provide financial service Anytime, Anywhere in Anyway. To the customers, they do not have to go to a bank anymore, as now they can deal with almost all kinds of business just by an Internet-available computer. Although the e-bank provides us services with more convenience, there are a lot of new problems to work on. For example, how to guarantee that the account is safe? How to organize the accounts data, so that the many kinds of queries can be easy? How to make the response time as short as possible, as when the customer invests in stocks or futures, the prices can be changing all the time? All these problems make people put more effort into SSME. SSME is an interdiscipline of computer science, operations research, management science, systems engineering, industrial engineering, applied mathematics etc. It is also closely related to transportation, enterprise management, logistics, health care, finance system, and e-commerce system.

Here we want to emphasize the importance of SSME at the times where ICT has been well developed. As the e-bank example shows, financial services can be greatly improved when the latest ICT systems are applied. Nowadays, we can buy and sell things, track a package, attend a meeting via the Internet, and use GPS for route guidance. Without ICT, these things could be much more tedious.

The development of ICT makes the concept of a Cyber-Physical System (CPS) (Lee, 2008; Sha, Gopalakrishnan, Liu, & Wang, 2009; Wang, 2010b) popular. CPS refers to a system featuring a tight combination of and coordination between computational and physical resources (Wang, 2010b). A CPS is usually a network of interacting elements with physical input and output. Examples of CPS range from the smart phone system to the smart grid system. The term smart phone is usually used to describe computer-like phones with advanced computing ability and connectivity usually equipped with a camera, a GPS, and a web browser. A smart grid is a type of electrical grid, which attempts to predict and intelligently respond to the behavior and action of all electric power users to efficiently deliver reliable, economic, and sustainable electricity services.

People connect themselves to the physical world via CPS, and the service is delivered to people by the CPS. ICT makes CPS an indispensable part of human life and then makes service much faster and easier to provide and obtain. SSME is desirable to make better our life in this new situation.

With the human and social dimension added, a CPS becomes a Cyber-Physical-Social System (CPSS) (Wang, 2010b). The difference between CPS and CPSS lies in whether the human is considered to be outside or within the system. For the control and management of a smart grid, humans can be considered as outside the system. However, for the transportation system and the enterprise system, it is better if people are considered as a part of the system. For the ACP approach, the human and social factors can be considered as within the system, and this is why we use the term artificial societies. The modeling process needs human intelligence and experiences, and at the step of computational experiments, we are in fact trading the computation for intelligence. There is a trend that the world is shifting from a physical world to a CPSS and ACP approach, which combines human intelligence and computation intelligence, making it possible to provide smarter services.

1.3 How Do We Benefit from SSME?

In this section, we give some examples of SSME. Specifically, we review some related papers presented at the 2011 IEEE International Conference on Service Operations and Logistics, and Informatics, which is a recent conference closely related to SSME.

1.3.1 Transportation System

The transportations system is a typical CPSS. For the transportation system, the car position information and the demand of the driver can be reported to the compute clouds. On the basis of the ACP approach, the clouds can optimize the demands of all the drivers and then provide services of detailed daily plans to the drivers with minimal delays while balancing the traffic load of the road network (Wang & Shen, 2011). Moreover, the optimization of the traffic lights can be performed by considering all the traffic lights as a whole system. Also, a Graphics Processing Unit (GPU) can be used to accelerate the optimization algorithms at the compute clouds (Shen et al., 2011). GPU usually consists of many cores working together and is a popular device for parallel computing. It can be facilitated at the compute clouds to accelerate the algorithms. The end users do not need to know how the GPU works, although the GPU is used to provide better services to the users. This shows the advantage of the cloud computing architect. Also, by collecting all available information, traffic information such as bus arrival time ( Z.J. Li et al., 2011) can be better predicted. The predicted information is delivered as services to the interested users.

1.3.2 Logistics System

Logistics is the management of goods flow between the point of origin and the point of use to meet the requirements of customers and other constraints. Logistics involves the integration of information, transportation, inventory, warehousing, material handling, packaging, and often security. There are many research topics in logistics research. Wang et al. (2011) quantify the value of collaboration in supply chains by computational experiments on the business process. The authors study a typical case of a four-tier network, including suppliers, plants, warehouses, and end customers. And then two situations of information sharing and resource sharing are analyzed. The results show that with collaboration, the supply chain performance can be improved significantly. With this result, a collaboration mode may be adopted to improve the performance of the system.

Guettinger, Godehardt, and Zinnen (2011) compare several online approaches for optimizing the emergency supply after a serious incident. And by applying a workload adapted version of the Simulated Annealing (SA) algorithm subsequent to each greedy iteration, the authors show that the total damage yielded by the greedy strategy can be reduced by about 10% with an acceptable computation budget. This shows the power of computation when providing services to users.

1.3.3 Health Care System

Health care is the diagnosis, treatment, and prevention of disease, illness, injury, and other physical and mental impairments in humans. Nyberg, Xiong, and Luostarinen (2011a) propose the idea of a connected health service for which ICT is used to connect the patient to expert advice and information knowledge databases, to connect patients to each other in self-help groups, to connect the patient to monitoring devices for self-diagnosis, and to connect the patient physiological measurement data to the clinician. The devices used to connect the patient could be a smart phone such as an iPhone or even a dedicated Personal Health Assistant (PHA) device. This is a typical CPSS for which the patients, the experts, and the cyberspace of knowledge and data are connected. The information can be transmitted easily via this network and then there are many benefits for the patients. The expert knowledge can be easily delivered from a website as a service to patients, and the communication between patients is easier, which enables them to help each other, and short messages can be used as a reminder of appointments, and it is easy to obtain sexual health advice via the short messages (Nyberg, Xiong, & Luostarinen, 2011b).

1.3.4 E-Commerce System

The e-commerce refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks. E-commerce is closely related to cloud computing, because there is a strong need for data storage and computing for better selling strategies. Bai et al. (2011) focus on how to use implicit and hybrid information to produce efficient recommendations for e-commerce systems. They make improvements in the matrix factorization (MF) method to explore hidden information more efficiently and then extend the improved MF to integrate user or item information to obtain a new algorithm for the recommendation. This process involves a combination of human intelligence and computation intelligence to provide good services to end users.

1.3.5 Financial System

The financial system is the system that allows the transfer of money between depositors and lenders. The financial service is one of the most elementary services in our life. Nowadays, electronic financial systems are becoming popular. But there are still many things to do. He, Ren, Wang, and Dong (2011) study the Supply Chain Finance (SCF) for which the bank evaluates the credit risks from the perspective of the supply chain instead of a single buyer. They formulate a three-stage supply chain problem into a stochastic dynamic programming problem. The objective is to maximize the expected income for the bank under the supplier’s credit risk, the buyer’s credit risk, and the inventory-in-transit risk. This is a study on a new topic of the service system. Agarwal, Desai, Kapoor, Kumaraguru, and Mittal (2011) propose a system that uses voice as a medium to percolate knowledge through the thick layers of illiteracy and to overcome the barrier of reach. The service system is applied to a rural area in India where many farm households are illiterate and do not have access to any credit. The Self-Help Group (SHG)—Bank Linkage Program was developed to link the unbanked rural population to the formal financial system. IBM’s Spoken Web Technology is used to communicate between SHG members. This is a successful application of ICT to deliver services.

1.4 Summary

We summarize our ideas and opinions as follows. Service Science, Management, and Engineering (SSME) is an important field in the service sector, which plays a more and more important role as a country develops. With the development of information and communication technology (ICT), especially cloud computing, the service usually can be delivered in a faster and easier way. A service system is a cyber-physical system (CPS) if the service is delivered via the Internet. The CPS provides a viewpoint of considering cyberspace and the real world as a whole. If social factors are considered, a CPS is a cyber-physical-social system (CPSS) for which human impacts are considered as part of the system. The artificial systems-computational experiments-parallel execution (ACP) provides an approach to analyze and optimize CPS and CPSS by combining human intelligence and computation intelligence.

In this chapter, we have provided some examples related to the topics mentioned earlier. In the future, we will see a whole integration of the topics. With further development of ICT and methodologies such as ACP, we see a promising future for SSME.

References

1. Agarwal V, Desai V, Kapoor S, Kumaraguru P, Mittal S. In: Enhancing the rural self help group–Bank linkage program. 2011.

2. Armbrust M, Fox A, Griffith R, et al. Above the clouds: A Berkeley view of cloud computing Berkeley: EECS Department, University of California; 2009; [Technical Report No. UCB/EECS-2009-28].

3. Bai X, Wu J, Wang H, Zhang J, Yin W, Dong J. In: Recommendation algorithms for implicit information. 2011.

4. Buyya R, Yeo CS, Venugopal S. Market-oriented cloud computing: Vision, hype, and reality for delivering it services as computing utilities. In: Proceedings of the 10th IEEE International Conference on High Performance Computing and Communications, Dalian. 2008;5–13.

5. Guettinger D, Godehardt E, Zinnen A. In: Online strategies for optimizing medical supply in disaster scenarios. 2011.

6. He M, Ren C, Wang Q, Dong J. In: An innovative stochastic dynamic model to three-stage supply chain finance. 2011.

7. Hefley B, Murphy W. Service science, management and engineering for the 21st century New York: Springer; 2008.

8. International Business Machines Corporation (IBM, 2008). IDEAS from IBM. Retrieved from http://www.ibm.com/ibm/ideasfromibm/us/compsci/20080728/resources/IFI_07282008.pdf.

9. Lee EA. Cyber physical systems: Design challenges. In: Proceedings of the 11th IEEE International Symposium on Object Oriented Real-Time Distributed Computing (ISORC), Orlando, FL. 2008;363–369.

10. Li F, Yu Y, Lin HB, Min WL. In: Public bus arrival time prediction based on traffic information management system. 2011.

11. Li ZJ, Chen C, Wang K. Cloud computing for agent-based Urban transportation systems. IEEE Intelligent Systems. 2011;26:73–79.

12. Maglio PP, Srinivasan S, Kreulen JT, Spohrer J. Service systems, service scientists SSME, and innovation. Communications of the ACM. 2006;49:81–85.

13. Nyberg T, Xiong G, Luostarinen J. In: Connected health services: Internet, mobile and wireless technologies in healthcare. 2011a.

14. Nyberg T, Xiong G, Luostarinen J. In: Short messages in health promotion: Widespread and cost effective two-way communication channel for health. 2011b.

15. Sampson SE, Froehle CM. Foundations and implications of a proposed unified services theory. Production and Operations Management. 2006;15:329–343.

16. Sha L, Gopalakrishnan S, Liu X, Wang Q. Cyber-physical systems: A new frontier. In: Tsai JJP, Yu PS, eds. Machine Learning in Cyber Trust. New York: Springer-Verlag; 2009;3–13.

17. Shen Z, Wang K, Zhu F. In: Agent-based traffic simulation and traffic signal timing optimization with GPU. 2011.

18. Spohrer J, Maglio PP. The emergence of service science: toward systematic service innovations to accelerate co-creation of value. Production and Operations Management. 2008;17:238–246.

19. Spohrer J, Maglio PP, Bailey J, Gruhl D. Steps towards a science of service systems. Computer. 2007;40:71–77.

20. US National Academy of Engineering. The impact of academic research on industrial performance US National Academy Press 2003.

21. Vargo SL, Lusch RF. Evolving to a new dominant logic for marketing. Journal of Marketing. 2004;68:1–17.

22. Vargo SL, Lusch RF, eds. Service-dominant logic: What it is, What it is not, What it might be. Armonk: M. E. Sharpe Inc; 2006.

23. Vargo SL, Lusch RF. Service-dominant logic continuing the evolution. Journal of the Academy of Marketing Science. 2008;36:1–10.

24. Vargo SL, Maglio PP, Akaka MA. On value and value co-creation: A service systems and service logic perspective. European Management Journal. 2008;26:145–152.

25. Wang FY. Computational theory and methods for complex systems. China Basic Science. 2004a;6:3–10.

26. Wang FY. Artificial societies, computational experiments, and parallel systems: A discussion on computational theory of complex social-economic systems. Complex Systems and Complexity Science. 2004b;1:25–35.

27. Wang FY. Parallel system methods for management and control of complex systems. Control and Decision. 2004c;19:485–489.

28. Wang FY. Parallel control and management for intelligent transportation systems: Concepts, architectures, and applications. IEEE Transactions on Intelligent Transportation Systems. 2010a;11:630–638.

29. Wang FY. The emergence of intelligent enterprises: From CPS to CPSS. IEEE Intelligent Systems. 2010b;25(4):85–88.

30. Wang K, Shen Z. Artificial societies and GPU-based cloud computing for intelligent transportation management. IEEE Intelligent Systems. 2011;26:22–28.

31. Wang W, Chai Y, Dong J, Ding H, Ren C, Qiu M. In: Evaluating the value of collaboration in supply chain through business process simulation.