Chapter 4: Product/Service Design1 Chapter 4 Product/Service Design.
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Transcript of Chapter 5 service design
Service DesignService Design
Beni AsllaniUniversity of Tennessee at Chattanooga
Operations Management - 6th EditionOperations Management - 6th Edition
Chapter 5Chapter 5
Roberta Russell & Bernard W. Taylor, IIIRoberta Russell & Bernard W. Taylor, III
Lecture outlineLecture outline
Service economy Characteristics of services Service design process Tools for service design Waiting line analysis for service
improvement
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Service EconomyService Economy
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Source: U.S. Bureau of Labor Statistics, IBM Almaden Research Center
GDP – Employment by sectorGDP – Employment by sector
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Characteristics of ServicesCharacteristics of Services
Services acts, deeds, or performances
Goods tangible objects
Facilitating services accompany almost all purchases of goods
Facilitating goods accompany almost all service purchases
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Continuum from Goods to ServicesContinuum from Goods to Services
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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 (cont.)
Services are intangible
Service output is variable
Services have higher customer contact
Services are perishable
Service inseparable from delivery
Services tend to be decentralized and dispersed
Services are consumed more often than products
Services can be easily emulated
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Service Design Process
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Service Design Process (cont.)
Service concept purpose of a service; it defines target market and
customer experience Service package
mixture of physical items, sensual benefits, and psychological benefits
Service specifications performance specifications design specifications delivery specifications
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Service Process MatrixService Process Matrix
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High v. Low Contact Services
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Convenient to customer
Facility location
Design Decision
High-Contact Service Low-Contact Service
Near labor or transportation source
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Compensative Advantage (New York:McGraw-Hill, 2001), p. 210
Facility layout
Must look presentable, accommodate customer needs, and facilitate interaction with customer
Designed for efficiency
High v. Low Contact Services (cont.)
Quality control More variable since customer
is involved in process; customer expectations and perceptions of quality may differ; customer present when defects occur
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Design Decision
High-Contact Service Low-Contact Service
Measured against established standards; testing and rework possible to correct defects
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Compensative Advantage (New York:McGraw-Hill, 2001), p. 210
Capacity Excess capacity required to handle peaks in demand
Planned for average demand
High v. Low Contact Services (cont.)
Worker skills Must be able to interact well with customers and use judgment in decision
making
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Design Decision High-Contact Service Low-Contact Service
Technical skills
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Compensative Advantage (New York:McGraw-Hill, 2001), p. 210
Scheduling Must accommodate customer schedule
Customer concerned only with completion
date
High v. Low Contact Services (cont.)
Service process
Mostly front-room activities; service may change during delivery in response to customer
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Design Decision
High-Contact Service Low-Contact Service
Mostly back-room activities; planned and executed with minimal interference
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Compensative Advantage (New York:McGraw-Hill, 2001), p. 210
Service package
Varies with customer; includes environment as well as actual service
Fixed, less extensive
Tools for Service DesignTools for Service Design
Servicescapes space and function ambient conditions signs, symbols, and
artifacts
Quantitative techniques
Service blueprinting line of influence line of interaction line of visibility line of support
Front-office/Back-office activities
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Service BlueprintingService Blueprinting
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Service Blueprinting (Con’t)Service Blueprinting (Con’t)
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Elements of Waiting Line AnalysisElements of Waiting Line Analysis
Operating characteristics average values for characteristics that describe
performance of waiting line system Queue
a single waiting line Waiting line system
consists of arrivals, servers, and waiting line structure
Calling population source of customers; infinite or finite
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Elements ofElements ofWaiting Line Analysis (cont.)Waiting Line Analysis (cont.) Arrival rate (λ)
frequency at which customers arrive at a waiting line according to a probability distribution, usually Poisson
Service time (μ) time required to serve a customer, usually described by
negative exponential distribution Service rate must be shorter than arrival rate (λ < μ) Queue discipline
order in which customers are served Infinite queue
can be of any length; length of a finite queue is limited
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Elements ofElements ofWaiting Line Analysis (cont.)Waiting Line Analysis (cont.)
Channels number of
parallel servers for servicing customers
Phases number of
servers in sequence a customer must go through
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Operating CharacteristicsOperating Characteristics
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Operating characteristics are assumed to approach a steady state
Traditional Cost RelationshipsTraditional Cost Relationships
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as service improves, cost increases
Psychology of WaitingPsychology of Waiting Waiting rooms
magazines and newspapers
televisions Bank of America
mirrors Supermarkets
magazines “impulse purchases”
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Disney costumed characters mobile vendors accurate wait times special passes
Psychology of Waiting (cont.)Psychology of Waiting (cont.)
Preferential treatment 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
Critical service providers services of police department, fire department, etc. waiting is unacceptable; cost is not important
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Waiting Line ModelsWaiting Line Models
Single-server model simplest, most basic waiting line structure
Frequent variations (all with Poisson arrival 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
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Basic Single-Server ModelBasic Single-Server Model
Assumptions Poisson arrival rate exponential service
times first-come, first-
served queue discipline
infinite queue length infinite calling
population
Computations λ = mean arrival rate μ = mean service rate n = number of
customers in line
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Basic Single-Server Model (cont.)Basic Single-Server Model (cont.)
probability that no customers are in queuing system
probability of n customers in queuing system
average number of customers in queuing system
average number of customers in waiting line
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( )( )PP 00 = 1 – = 1 – λλ
μμ
( ) ( )( )( ) ( )( )PPnn = ∙= ∙ PP 00 = = 1 – 1 –
λλ nn λλ nn λλ
μμ μμ μμ
LL = = λλ
μμ – – λλ
LLqq = = λλ 22
μμ ( (μμ – – λλ ))
Basic Single-Server Model (cont.)Basic Single-Server Model (cont.)
average time customer spends in queuing system
average time customer spends waiting in line
probability that server is busy and a customer has to wait (utilization factor)
probability that server is idle and customer can be served
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1 L1 L
μμ – – λλ λλWW = = = =
λλ
μμ ( (μμ – – λλ ))
WW qq ==
λλ
μμρρ = =
II = 1 – = 1 – ρρ
= 1 – = = 1 – = PP 00
λλ
μμ
Basic Single-Server Model ExampleBasic Single-Server Model Example
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Basic Single-Server Model Example Basic Single-Server Model Example (cont.)(cont.)
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Service Improvement AnalysisService Improvement Analysis
waiting time (8 min.) is too long hire assistant for cashier?
increased service rate hire another cashier?
reduced arrival rate
Is improved service worth the cost?
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Basic Single-Server Model Example: Basic Single-Server Model Example: ExcelExcel
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Advanced Single-Server ModelsAdvanced Single-Server Models
Constant service times occur most often when automated equipment or
machinery performs service
Finite queue lengths occur when there is a physical limitation to length of
waiting line
Finite calling population number of “customers” that can arrive is limited
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Advanced Single-ServerAdvanced Single-ServerModels (cont.)Models (cont.)
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Basic Multiple-Server ModelBasic Multiple-Server Model
single waiting line and service facility with several independent servers in parallel
same assumptions as single-server model sμ > λ
s = number of servers servers must be able to serve customers faster than
they arrive
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Basic Multiple-Server Model (cont.)Basic Multiple-Server Model (cont.)
probability that there are no customers in system
probability of n customers in system
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1 λ n
s!sn – s μ
P0, for n ≤ s
1 λ n
n! μ( ){ ( )P0, for n > s
Pn =
1 λ n 1 λ s sμ
n! μ s! μ sμ - λ( ) ( )( )n = s – 1
n = 0
1P0 = ∑
+
Basic Multiple-Server Model (cont.)Basic Multiple-Server Model (cont.)
probability that customer must wait
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( )( ) 1 1 λ λ s s ssμμ
ss! ! μμ ssμμ – – λλ
PPww = = P P 00
λμλμ ( (λλ //μμ )) s s λλ
((ss – 1)! ( – 1)! (ssμμ – – λλ )) 22 μμ
LL = = PP 0 0 + +
LL
λλWW = =
LLqq = = LL – –λλ
μμ
1 L1 Lqq
μμ λλWWqq = = WW – = – =
ρρ = = λλssμμ
Basic Multiple-Server Model ExampleBasic Multiple-Server Model Example
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Basic Multiple-Server Model Example Basic Multiple-Server Model Example (cont.)(cont.)
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Basic Multiple-Server Model Example Basic Multiple-Server Model Example (cont.)(cont.)
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Basic Multiple-Server Model Example Basic Multiple-Server Model Example (cont.)(cont.)
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Basic Multiple-Server Model Example Basic Multiple-Server Model Example (cont.)(cont.)
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Basic Multiple-Server Model Basic Multiple-Server Model Example (cont.)Example (cont.)
To cut wait time, add another service representative now, s = 4
Therefore:
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Multiple-Server Waiting LineMultiple-Server Waiting Linein Excelin Excel
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