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MBA 8452 Systems and Operations Management. Product Design & Process Selection — Service. Introduction to Operations Management/ Operations Strategy. Process Control and Improvement. Process Analysis and Design. Project Management. Planning for Production. Quality Management.

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slide1

MBA 8452 Systems and Operations Management

Product Design & Process Selection —Service

slide2

Introduction to Operations Management/ Operations Strategy

Process Control

and Improvement

Process Analysis

and Design

Project

Management

Planning for Production

Quality

Management

Process Analysis

Capacity Management

Aggregate Planning

Job Design

Statistical

Process Control

Just in Time

Scheduling

Manufacturing

Layout/

Assembly Line Balancing

Inventory Control

Supply Chain

Management

Services

Waiting Line Analysis

objectives services design
Objectives: Services Design
  • Compare Goods and Services
    • Be able to compare and contrast organizations based on the type of product they make or offer for sale.
  • The Service and Process Classifications
    • Describe the type of service and the appropriate process classification for it.
  • Service System Design Matrix
    • Explain the service system design matrix
  • Blueprint for Service Process
    • Be able to flow chart a service process using blueprinting
service characteristics and their implications on service design
Service Characteristics and Their Implications on Service Design

Characteristics

Implications

  • intangible
  • can not be inventoried
  • high customer contact
  • highly visible to consumers
  • production concurrent with
  • consumption
  • labor intensive
  • Focus on intangible factors
  • Capacity planning, flexibility critical
  • Less latitude to make mistake
  • Problem prevention, process
  • layout, and customer relations
  • Location
  • Employee treatment and training
service types

Internal Supplier

Internal

Customer

External

Customer

Internal Supplier

Service Types
  • Facilities-based vs. Field-based services
  • Internal Services vs. External Services
operational classification of services
Operational Classification of Services
  • Amount of customer contact
    • Low vs. High
  • Service process variability
    • Standardized vs. customized service
service system design matrix

Production Efficiency

Service-System Design Matrix

Degree of Contact with Customer

low

Variability in Service Requirements

high

service triangle

The Service

Strategy

The

Customer

The

Systems

The

People

Service Triangle
service strategy focus
Service Strategy: Focus
  • Treatment of the customer
  • Speed and convenience
  • Price
  • Variety
  • Quality
  • Unique skills
service fail safing
Service Fail-safing
  • AProactive Approach
    • Keeping a mistake from becoming a service defect
  • Poka-Yokes
    • Simple devices or methods that prevent mistakes from happening in products or service production
slide12

Is this a good

poka-yoke?

11

three contrasting service designs
Three Contrasting Service Designs
  • The production line approach
    • Example: McDonalds
  • The self-service approach
    • Example: ATM
  • The personal attention approach
    • Example: Ritz Carlton
characteristics of a well designed service system
Characteristics of a Well-Designed Service System
  • operating focus
  • user-friendly
  • robust
  • consistent performance
  • evidence of service quality
  • cost-effective
  • effective links between back & front office
tech note 6 waiting line management objective service design wait lines
Tech Note 6: Waiting Line ManagementObjective: Service Design - Wait Lines
  • Wait Line Management
    • Identify and explain situations where wait line management is useful. Apply the principles learned in this lesson to a situation
  • Trade-off between Capacity and Wait Line Cost
    • Explain why there is a trade-off between capacity and wait lines (be able to asses the cost from the customer and the company’s perspective)
  • Relationship between Utilization and Wait Time
    • Explain why wait time is longer as facilities get closer to 100 percent utilization
    • Be able to compare and contrast how wait line management is used in services and manufacturing with respect to utilization and wait time
  • Types of Queues
    • Be able to identify the four types of queues and give an example for each type
  • Problem Solving - Model 1
    • Be able to calculate the system performance measures given the average number of customers served per time period () and the average number of customers that arrival per time period ()
tech note 6 waiting line management
Tech Note 6Waiting Line Management
  • Why waiting lines (queues) unavoidable?
    • Limited service system capacity – Facilities have a limited amount of space
    • Variable customer demand -peak v/s non-peak
  • Why study waiting line?
    • Find the most cost-effective system capacity
    • Goal is to minimize the sum of two costs
      • Customer waiting costs
      • Service capacity costs
wait line exercise
Wait Line Exercise
  • Using The Target Article
    • Consider yourself as the manager of the “bateau”:
      • Given that the bateau is at the dock, what are the constraints for this type of operation?
      • Where are the potential waiting lines? What is similar and what is different about these lines?
      • How will you manage the lines to ensure that the business operates successfully and customers are satisfied?
some ways to manage wait lines
Some ways to manage wait lines
  • Determine acceptable waiting time for customers
  • Keep customer informed of waiting time
  • Have fast check out lines (segments customers)
  • Schedule customers via a number/ticket, appointment
  • Run specials to attract customers during non-peak periods
  • Use experienced/fast workers or faster equipment to process customers through lines
  • Arrange layout to help process customers through the service area/try to divert customer’s attention when waiting in line
trade off between service capacity waiting line cost

Total

cost

Customer

waiting cost

Capacity

cost

+

=

Cost of service capacity

Cost of customers

waiting

Trade-off between Service Capacity & Waiting Line Cost

Cost

Service capacity

arrival and service profiles
Arrival and Service Profiles
  • The number of arrivals can vary
    • one at a time
    • small groups
    • large groups
  • The service capacity remains constant
    • size of the facility
    • number of workers during a given shift
    • sometimes capacity is exceeded which means customers have to wait
some line structures

Single channel

Single phase

Server

Single channel

Multiple phase

Server1

Server2

S1

S4

S1

Multi-channel

Single phase

S2

S5

S2

S3

S6

S3

Multi-channel

Multi-phase

Some Line Structures
components of a queueing system1
Components of AQueueing System
  • Customer
    • from finite or infinite source population
    • single or batch arrivals
    • arrival patterns
      • Random (Poisson arrivals)
      • Average arrival rate ()
      • Average inter-arrival time (1/)
    • patient or impatient (balking or reneging)
components of a queueing system2
Components of AQueueing System
  • Service System
    • number of lines
    • number of service phases
    • line length (capacity)
    • queue discipline (order of service)
    • number of servers
    • service time
      • Fixed or random (Exponential service)
      • Average service rate ()
      • Average service time (1/ )
waiting line models
Waiting Line Models

Source

Model

Layout

Population

Service Pattern

1

Single channel

Infinite

Exponential

2

Single channel

Infinite

Constant

3

Multichannel

Infinite

Exponential

4

Single or Multi

Finite

Exponential

These four models share the following characteristics:

·

Single phase

Poisson arrival

·

FCFS

·

·

Unlimited queue length

system performance measures
SystemPerformance Measures
  • Average number of customers waiting
    • in line ( )
    • in system ( )
  • Average time customers wait
    • in line ( )
    • in system ( )
  • System utilization ()
  • Probability that exactly n customers are in the system (Pn)
model 1
Model 1
  • Single channel, single phase
  • Poisson arrival (), exponential service ()

Major performance measures

application of model 1
Application of Model 1

Target “bateau” open for business at the dock.

Customers arrive at the rate of 25 per hour.

The cashier can serve one customer every two minutes.

Assume Poisson arrival and exponential service.

A) What is the average utilization of the employee?

B) What is the average number of customers in line?

C) What is the average number of customers in the system?

D) What is the average waiting time in line?

E) What is the average waiting time in the system?

F) What is the probability that exactly two cars will be in the system?

application of model 1 cont
Application of Model 1 (cont.)

A) What is the average utilization of the cashier?

B) What is the average number of customers in line?

application of model 1 cont1
Application of Model 1 (cont.)

C) What is the average number of customers in the system?

D) What is the average waiting time in line?

E) What is the average waiting time in the system?

application of model 1 cont2
Application of Model 1 (cont.)

F) What is the probability that exactly two cars will be in the system (one being served and the other waiting in line)?

* What is the probability that an arriving car has to wait?

model 2
Model 2
  • Single channel, single phase
  • Poisson arrival (), constant service ()

Major performance measures

application of model 2
Application of Model 2

An automated pizza vending machine heats and

dispenses a slice of pizza in 4 minutes.

Customers arrive at a rate of one every 6 minutes with the arrival rate exhibiting a Poisson distribution.

Determine:

A) The average number of customers in line.

B) The average total waiting time in the system.