Supporting Facility and Process Flows Chapter 7

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

Course Overview

Define, describe and classify services (Ch 1,2)

Strategic view of service design &

development (Ch 3,4)

Process view of quality improvement

(Ch 6,7,8)

Encounter view of customers &

employees (Ch 9)

VIEWSSPECIAL TOPICS TOOLS

Capacity planning & queuing models

(Ch 11,12,16)

Project management (Ch 15)

Information technology (Ch 5)

Supply Chains & Outsourcing (Ch 13)

Globalization (Ch 14)

Facility location(Ch 10)

Inventory control (Ch 18)

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Servicescapes

Designing Physical Surroundings to Affect Employee and Customer Behavior

• Ambient Conditions: background characteristics such as noise level, music, lighting, temperature, and scent.

• Spatial Layout and Functionality: reception area, circulation paths of employees and customers, and focal points.

• Signs, Symbols, and Artifacts: selection, orientation, location, and size of objects.

3

Environmental Orientation Considerations

• Need for spatial cues to orient visitors• Formula facilities draw on previous experience• Entrance atrium allows visitors to gain a quick

orientation and observe others for behavioral cues• Orientation aids and signage such as “You Are Here”

maps reduce anxiety • Allow customers to see both into and through the

space

4

Facility Design Considerations

• Nature and Objectives of Service Organization

• Land Availability and Space Requirements

• Flexibility• Security• Aesthetic Factors• The Community and Environment

5

Types of Services Processes

Process Type ServiceExample

Characteristic Management Challenge

Project Consulting One-of-a-kind engagement Staffing and scheduling

Job Shop Hospital Many specialized departments Balancing utilization and scheduling patients

Batch Airline Group of customers treated simultaneously

Pricing of perishable asset (seat inventory)

Flow Cafeteria Fixed sequence of operations Adjust staffing to demand fluctuations

Continuous Electric Utility Uninterrupted delivery Maintenance and capacity planning

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Process Flow Diagrams

• Visualize and document a process

• Identify bottlenecks

• Determine system capacity

• Make improvements

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Process Flow Diagram of Mortgage Service

Property SurveyCT=90 min.

Credit ReportCT=45 min.

Title SearchCT=30 min. Unapproved

Mortgages

Approved Mortgages

CompletedApplicationsMortgage

ApplicationsFinal Approval

CT=15 min.

Yes

No

 

Finish Processing Accept

Mortgages

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Mortgage Service Process Gantt Chart

1 2

Every 90 min a new mortgage is completed

3

Rush Order Flow Time = 90 + 15 = 105 min

Process Cycle Time

Fig. 7.5, pg 163

Slide contributed by David Hoyte9

Process Analysis Terminology

• Cycle Time is the average time between completions of successive units.

• Bottleneck is the factor that limits production usually the slowest operation.

• Capacity is a measure of output per unit time when fully busy.

• Capacity Utilization is a measure of how much output is actually achieved.

• Throughput Time is the time to complete a process from time of arrival to time of exit.

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Process Analysis Terminology (cont.)

• Rush Order Flow Time is the time to go through the system without any queue time.

• Direct Labor Content is the actual amount of work time consumed.

• Total Direct Labor Content is the sum of all the operations times.

• Direct Labor Utilization is a measure of the percentage of time that workers are actually contributing value to the service.

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Bottlenecks1) When flow is not

synchronized, process rate is limited by the “bottleneck”

2) The bottleneck constrains throughput. The rate of total throughput is the rate of the bottleneck

3) Time lost on the bottleneck is time lost in the whole process

Slide contributed by David Hoyte

Work Allocation – Boat Show1 120 30

2 240 15

3 240 15In

Out

Collect Payment

Hand Stamp + program

Apply wrist band

What is the Process Capacity?

Where is the Bottleneck?

What if 1 more person is added?

ActivityNumber(s) Capacity per hour Cycle Time in seconds

15 sec cycle = 4 customers per min = 4 x 60 = 240 customers per hour

Capacity Calculation:

Slide contributed by David Hoyte13

Work Allocation – Boat Show

1 120 30

2 240 15

3 240 15

In

Out

Collect Payment

Hand Stamp + program

Apply wrist band

What is the Process Capacity now?

1 120 30In

Slide contributed by David Hoyte14

Options for Eliminating a Bottleneck

1. Add another worker to the job.

2. Provide aid to reduce activity time. (e.g. automating an activity)

3. Regroup the tasks to create a new line balance with different activity assignments.

• Goal: all jobs/activities should be of nearly equal duration.

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Automobile Driver’s License Office

Review Payment Violations Eye Test Photograph Issue

1 240 15

2 120 30

3 60 60

4 90 40

5 180 20

6 120 30

ActivityNumber(s) Capacity per hour Cycle Time in seconds

In Out

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Automobile Driver’s License Office (Improved Layout)

1,4 65 55

3 60 60

3 60 60

1,4 65 55

6 120 30

5 180 20

2 120 30

In

In

Out

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Health Maintenance Organization (B)

Activity Time (sec.)

Receive prescriptions 24

Type labels 120

Fill prescriptions * 60

Check prescriptions * 40

Dispense prescriptions * 30

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* Must be performed by Pharmacist

HMO (B) Questions

1. Identify the bottleneck activity, and show how capacity can be increased by using only two pharmacists and two technicians.

2. In addition to savings on personnel costs, what benefits does this arrangement have?

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HMO (B) Process Flow

1 2 3 4 5

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Activity

Cycle time

Capacity per hour

150 30

120 60

60 90

40 30

120

What is the bottleneck operation? What is the capacity of the system? Why? How can capacity be increased?

Current staffing: 2 Techs & 3 Pharmacists, each doing one task

Slide contributed by David Hoyte20

HMO (B) Process Flow (old vs. new)

1 2 3 4 5

24

150 30

120 60

60 90

40 30

120

1, 2

144

3,4,525

130

27.7

1, 2

144

3,4,525

130

27.72 Techs

2 Techs 2 Pharma

2 Techs 3 Pharma

Capacity 30 / hr

Capacity 50 / hr

What other benefit do the two symmetrical “cells” provide?Slide contributed by David Hoyte

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The Role of the Servicescape

Concept: a modern farmer’s market for the discerning customer

• Aesthetics • Force Flow• Queuing• Results

The Servicescape

“We want to change the way people eat…” Brian Cronin, General Manager

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Aesthetics

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Produce

Flowers

Produce

Produce

Meat

Seafood

Che

ese

InfoCoffee

Entrance

Cafe

Cashiers

Beer & Wine

Dairy Bakery

Deli

Grocery & Staples

Catering

Exit

Force Flow

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Cashiers

Fro

zen

Dairy Meat

Produce

Deli

Grocery & Staples

Normal Grocery Store

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Deli/Meat

CheckoutExpress Lanes

1

3

6

2

5

4

Queuing Systems

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Central Market Average Grocery Store

60k ft2 100k ft2Size

Sales / Customer$40 $20

Transactions / Week25,000 50,000

Product MixWine Groceries

Comparison

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“There’s cheese at the end of the maze…”

Questions1. How do the environmental dimensions of the

servicescape (ambient conditions, space/function, signs, symbols & artifacts) explain the success of Central Market?

2. Comment on how the servicescape shapes the behaviors of both customers and employees?

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