Service Processes Chapter 07 McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc All rights reserved Learning Objectives Describe the characteristics of service processes and how they differ from manufacturing processes Classify service processes Explain service blueprinting Understand waiting line (queuing) analysis Model some common waiting line situations and estimate server utilization, the length of a waiting line, and average customer wait time 7-2 Operational Classification of Services 7-3 Service Organization Design Services cannot be stored in inventory In services, capacity becomes the dominant issue Too much capacity leads to excessive costs Insufficient capacity leads to lost customers Waiting line models provide a powerful mathematical tool for analyzing many common service situations 7-4 Virtual Services – The New Role of the Customer Pure virtual customer contact - companies enable customers to interact with one another in an open environment eBay Second Life Mixed virtual and actual customer contact customers interact with one another in a server-moderated environment such as product discussion groups YouTube WikiPedia 7-5 Service Blueprinting The standard tool for service process design is the flowchart A unique feature of the service blueprint is the distinction made between the high customer contact aspects of the service and those activities that the customer does not see Called a service blueprint Made with a “line of visibility” on the flowchart Fail-safing involves using the service blueprint to identify opportunities for failure and then establishing procedures to prevent mistakes from becoming defects (poka-yokes) 7-6 Poka-Yokes Poka-yokes - procedures that block the inevitable mistake from becoming a service defect (“avoid mistakes”) Poka-yokes are common in factories Many applications of poka-yokes to services Warning methods (e.g steps that lead to mistakes trigger a reminder) Physical or visual contact methods (e.g parts can only fit together in the correct way) The Three T’s Task to be done Treatment accorded to the customer Tangible features of the service facility 7-7 Waiting Line Problems (Queues) A central problem in many service settings is the management of waiting time Reducing waiting time costs money, but raises customer satisfaction and throughput When people waiting are employees, it is easy to value their time When people waiting are customers, it is more difficult to value their time Lost sales is one value (often a low estimate) 7-8 Practical View of Waiting Lines 7-9 Managing Queues 7-10 Queuing System Analysis The source population – who are your customers? Population size – finite or infinite? Customer arrival rates Exponential Poisson Constant Customer arrival characteristics Arrival patterns (steady or seasonal) Size or arrival rates (individuals or groups) Degree of patience (will they wait?) Service rate distribution Exponential Excel: Queuing Calculations 7-11 Queuing System Factors Length – how much waiting room is available? Number of lines – how many servers are working? Queue discipline – how new arrivals enter the line? How you decide which customer to serve next? Service time distribution – what is the service rate and how much does it vary? Line structure – what does the process look like? Single channel, single phase Single channel, multiphase Multichannel, single phase Multichannel, multiphase Mixed 7-12 Service Time Distribution Constant Service is automated and not customized to individual customers (automatic car wash) Variable Service is provided by humans Can be customized to individual customers Described using exponential distribution 7-13 Exiting the Queuing System Customers who have been served have two possible futures Low probability of reservice (appendectomy patients rarely return for a repeat operation) High probability of reservice (a machine that is prone to breakdowns may require new service immediately after leaving the service center) 7-14 Computer Simulation of Waiting Lines 7-15 ... Describe the characteristics of service processes and how they differ from manufacturing processes Classify service processes Explain service blueprinting Understand waiting line (queuing) analysis... situations and estimate server utilization, the length of a waiting line, and average customer wait time 7-2 Operational Classification of Services 7-3 Service Organization Design Services... standard tool for service process design is the flowchart A unique feature of the service blueprint is the distinction made between the high customer contact aspects of the service and those activities