Lecture Operations management: Creating value along the supply chain (Canadian edition) - Chapter 5

Chapter 5 - Service design. This chapter includes contents: Service economy, characteristics of services, service design process, tools for service design, waiting line analysis for service improvement.

Learning Objectives

— Relate numerous statistics that demonstrate the predominance of services in the Canadian and the global economy

— Define services and their characteristics such that they are

distinguishable from manufacturing

— Explain the key aspects of the service design process and

describe how they are affected by varying degrees of

customer/service provider contact

— Describe several tools used for service design including

blueprinting and servicescapes

— Use waiting line analysis to improve service

Lecture Outline

Service Economy

Percent of GDP by Industry Sector for

Canada

Continuum From Goods to Services

Source: Adapted from Earl W Sasser, R.P Olsen, and D Daryl Wyckoff, Management of

Service Operations (Boston: Allyn Bacon, 1978), p.11.

Characteristics of Services

Service Design Process

Service Design Process

—purpose of a service; it defines target market

and customer experience

Service Process Matrix

High vs Low Contact Services

High vs Low Contact Services

High vs Low Contact Services

High vs Low Contact Services

Service Blueprinting

Service Blueprinting

Elements of Waiting Line Analysis

• average values for characteristics that describe

performance of waiting line system

• a single waiting line

• consists of arrivals, servers, and waiting line structure

• source of customers; infinite or finite

5-20

Elements of Waiting Line Analysis

Operating Characteristics

approach a steady state

Traditional Cost Relationships

Psychology of Waiting

• magazines and newspapers

Psychology of Waiting

• Grocery stores: express lanes for customers

with few purchases

• Airlines/Car rental agencies: special cards

available to frequent-users or for an additional

fee

• Phone retailers: route calls to more or less

experienced salespeople based on customer’s sales history

• services of police department, fire department, etc

• waiting is unacceptable; cost is not important

Waiting Line Models

• simplest, most basic waiting line structure

rate)

• exponential service times

• general (unknown) distribution of service times

• constant service times

• exponential service times with finite queue

• exponential service times with finite calling

population

• infinite queue length

• infinite calling population

• λ = mean arrival rate

• μ = mean service rate

• n = number of customers in line

Basic Single-Server Model

— probability that no customers are in

Basic Single-Server Model

— average time customer spends in

— probability that server is idle and customer can be served

ρ =

I = 1 – ρ

= 1 – = P0λ

μ

Basic Single-Server Model Example

λ = 24

µ = 30

Basic Single-Server Model Example

Service Improvement Analysis

• hire assistant for cashier?

• increased service rate

• hire another cashier?

• reduced arrival rate

Excel Single-Server Solution

Advanced Single-Server Models

• occur most often when automated

equipment or machinery performs service

• occur when there is a physical limitation to

length of waiting line

• number of “customers” that can arrive is

limited

Advanced Single-Server Models

Advanced Single-Server Model

Basic Multiple-Server Model

several independent servers in parallel

Basic Multiple-Server Model

—probability that there are no customers in system

—probability of n customers in system

1 λ ns!sn – s μ

P0, for n ≤ s

1 λ nn! μ( )

{ ( ) P0, for n > s

Pn =

1 λ n 1 λ s sμn! μ s! μ sμ - λ( ) ( )( )

n = s – 1

n = 0

1P0

Basic Multiple-Server Model

—probability that customer must wait

Basic Multiple-Server Model

Example

—Three-server system

Basic Multiple-Server Model

Example

Basic Multiple-Server Model

Example

Multiple-Server Waiting Line in Excel

Multiple-Server Waiting Line in Excel

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