In service systems, variability is encountered in many components, interfaces, and entities interacting with the system. There could be variations in service system performance across different usage situations and conditions. There could be operator-introduced variations in operating the system, and there could be customerintroduced variability in service operations. Since the specific usage of the service system and the usage conditions can vary, the resultant variations in service performance can impact consumer preferences for and satisfaction with the service system. While some variability has a negative impact on customers, other kinds of variations may be preferred by customers. In designing service systems, one has to understand the sources and types of variability. Any service system that is designed should be robust to these variations – both in system performances and consumer preferences and satisfaction. Achieving the robustness criteria, however, implies consideration of a large number of design criteria across multiple functions – both system design and customer-facing functions. The authors identify the research issues involved and present a general framework to tackle such service system design problems.

The overall objective in this paper was to identify the different forms of variability in service system contexts, understand the nature of these forms of variability, whether they are controllable or uncontrollable, and whether a reduction or revenue generating strategy is necessitated depending on the specific form of variability. The authors also argued that extant design and operations literature is too focused on cost reduction and efficiency and tended to view customer-introduced variability as something to be accommodated rather than welcomed as a revenue expansion opportunity. We then presented a framework that explicitly considers all forms variability and attempts to view service system design from a revenue expansion perspective.