Quality-time Tradeoff in Service Operations Management

Numerous research claimed the tradeoff relationship between cost and flexibility in service operations management. Meanwhile, studies on other sources of competitive priorities in service –quality and timeare missing in service operations management studies. Considering service characteristics, quality and time tradeoff, though neglected, is more significant than any other issues in the service industry. Because of unique service characteristics which differentiate from goods, time and quality tradeoff is more significant and apparent in the service industry. They are intangible, simultaneously produced and consumed, and perishable, thus it is impossible to stock services, and to use inventories to manage fluctuations in demand. This makes it difficult to accomplish superior time and quality performance simultaneously for service firms. Service organizations are forced to choose either quality or time. This paper raises a question on quality-time tradeoff in SOM for the first time. To explain time-quality tradeoff effectively, a service product/process matrix is proposed that links the service process and service product in this study. Using the matrix, we suggest that service process characteristics and product characteristics must fit to each other. According to the position in the matrix, a service firm must focus on either quality or time.