service operation management 6
TRANSCRIPT
Service Facilities and Process Flows
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
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.
Typology of Servicescapes
Who Performs in Servicescape
Physical Complexity of the Servicescape Elaborate Lean
Self-service (customer only)
Golf course Water slide park
Post office kiosk E-commerce
Interpersonal (both)
Luxury hotel Airline terminal
Budget hotel Bus station
Remote service (employee only)
Research lab L.L. Bean
Telemarketing Online tech support
Facility Design Considerations Nature and objectives of service organization
Land availability and space requirements Flexibility Security Aesthetic factors The community and environment
How are Fulton Hall and this classroom designed with respect to these considerations?
Process Analysis Terminologyfor Managing Flow
Bottleneck is the operation or resource that limits production. Process Cycle Time is the average time between completions of successive units and is limited by the bottleneck operation.
Capacity is a measure of the maximum output per unit time. Capacity Utilization is a measure of how much output is achieved relative to the actual capacity.
Throughput Time is the time to complete a process from time of arrival to time of exit. It is the sum of the critical path operations times plus any waiting time.
Process Flow Diagram of Mortgage Service
What is the throughput time for this process? How could the process be changed to improve its flow?
Property SurveyCT=90 min.
Credit ReportCT=45 min.
Title SearchCT=30 min.
Unapproved Mortgages
Approved Mortgages
CompletedApplications
MortgageApplications
Final ApprovalCT=15 min.
Yes
No
Facilities Layout Facilities should be laid out to:◦ Create an environmental orientation◦ Affect employee and customer behavior◦ Reflect the service design goals◦ Manage flow
Comment on the layout of the following facility: Ultimate Fitness Club
Strategic Location Considerations Flexibility of a location is a measure of the degree to which the
service can react to changing economic conditions.◦ Elasticity of demand, location risk management (portfolio approach),
responsiveness
Competitive positioning refers to methods by which the firm can establish itself relative to its competitors.◦ Barriers to competition, establishing market awareness
Demand management is the ability to control the quantity, quality, and timing of demand.◦ Especially important when capacity is relatively fixed.
Focus is offering the same narrowly defined service at many locations.◦ Makes expansion easier but can result in cannibalization.
Location Planning Considerations Competitive clustering (among competitors)
◦ e.g. auto dealers, motels
Saturation marketing (same firm)◦ Urban and high traffic areas, e.g. Au Bon Pain
Marketing intermediaries as a distribution channel◦ e.g. credit cards, insurance
Substitute Communication for Travel◦ e.g. remote health care, direct deposit
Separation of front from back office◦ Co-location vs. efficiency considerations (e.g. remote fast-food ordering)
Impact of the Internet on service location◦ Virtual location and visibility (e.g. Amazon.com, eBay)
Site-specific considerations (e.g. traffic, zoning, regulations)
Front Office and Back Office Location Considerations
Front Office Back Office
External Customer(consumer)
Is travel out to customer or customer travel to site?Can electronic media substitute for physical travel?Is location a barrier to entry?
Is service performed on person or property?Is co-location necessary?How is communication accomplished?
InternalCustomer(employee)
Availability of labor?Are self-service kiosks an alternative?
Are economies of scale possible?Can employees work from home?Is offshoring an option?
Analytical Tools for Location Decisions
Regression modeling (determining location factors that drive profitability)
Optimization techniques◦ e.g. minimize average distance travelled (euclidean or
metropolitan metric), maximize market share (Huff model)
Multiple location techniques◦ Location set covering or maximal covering
Location intelligence products