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Ch09 Service Opera Ti Ions

Ch09 Service Opera Ti Ions

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Slides prepared by John Loucks

¥ 2002 South-Western/Thomson Learning TM

1 1

Chapter 9

Service Operations Planning and Scheduling



Introduction Scheduling Quasi-Manufacturing Service Operations QuasiScheduling Customer-as-Participant Service Customer-asOperations Scheduling Customer-as-Product Service Operations Customer-asWrapWrap-Up: What World-Class Companies Do World-


Introduction  Services are operations with: Intangible outputs that ordinarily cannot be inventoried Close customer contact Short lead times High labor costs relative to capital costs Subjectively determined quality      4 .

Introduction  Facts about service businesses: Enormous diversity Service businesses can be any size Twice as many non-retail service businesses as nonretail Technical training important due to significant dependence on computers. automation and technology     5 .

controlling. and management to stay competitive   6 .Introduction  Other Facts about service businesses: Service workers well paid relative to manufacturing Need better planning.

Roebuck & Company       7 .Some of the Largest Service Businesses  Rank in the top 20 US Corporations: AT&T WalWal-Mart Citigroup State Farm SBC Communications Sear.

Spectrum of Service Industries      Transportation Banking Retailing Health Care Entertainment      Insurance Real Estate Communications Utilities « and more 8 .

No Clear Line Between Manufacturing and Service Firms    Every business. whether manufacturing or service. has a mix of customer service aspects and production aspects in its operations Manufacturing has much to learn from services that excel Services have much to learn from manufacturers that excel 9 .

4% 11.2 13.6% 70.Manufacturing and Service Jobs Percentage of US Jobs 1988 1998 2008* Manufacturing Jobs Service Jobs 16.1% 66.8 73.9 * Projected 10 .

Operations Strategies  Positioning strategies contain two elements: Type of service design Standard or custom Amount of customer contact Mix of physical goods and intangible services Type of production process QuasiQuasi-manufacturing Customer-asCustomer-as-participant Customer-asCustomer-as-product         11 .

. usually custom       12 ..Types of Service Operations    QuasiQuasi-manufacturing Production occurs much as manufacturing Physical goods dominant over intangible services Customer-asCustomer-as-participant High degree of customer involvement Physical goods may or may not be significant Service either standard or custom Customer-asCustomer-as-product Service performed on customer.

Scheduling Challenges in Services  Planning and controlling day-to-day activities day-todifficult due to: Services produced and delivered by people Pattern of demand for services is non-uniform non  13 .

so businesses use following tactics: Preemptive actions to make demand more uniform OffOff-peak incentives/discounts (telephone) Appointment schedules (dentist) Fixed schedules (airline) Make operations more flexible so it is easier to vary capacity PartPart-time personnel (supermarket) Subcontractors (postal service) In-house standby resources (fire department) In        14 .NonNon-Uniform Demand  Cannot inventory services in advance of high-demand highperiods.

NonNon-Uniform Demand   Additional tactics used by businesses: Anticipate demand and schedule employees during each time period to meet demand Allow waiting lines to form These two tactics will be covered in greater detail   15 .

McDonald¶s back-room operation back     16 . and delivery of physical goods Example..Scheduling Quasi-Manufacturing Services Quasi ProductProduct-Focused Operations Resemble product-focused production lines productCustomer demand is forecast and capacity decisions made just as in manufacturing High volumes of standardized products Management focused on controlling production costs. product quality..

Scheduling Quasi-Manufacturing Services Quasi ProcessProcess-Focused Operations Managed like job shops in manufacturing InputInput-output control important to balance capacity between operations Gantt charts used to coordinate flows between departments Sequence of jobs consider sequencing rules. and flow times     17 . changeover costs.

Work Shift Scheduling   Three difficulties in scheduling services: Demand variability Service time variability Availability of personnel when needed Managers use two tactics: Use full-time employees exclusively fullUse some full-time employees as base and fill in fullpeak demand with part-time employees part     18 .

The stylists are all full-time fullemployees and can work any 4 consecutive days per week from 10 a. On the next slide are: 1) average number of dropdropin customers each day. and 2) estimated number of customer appointments each day. to 7 p. (with an hour off for lunch). Monday through Saturday.Example: Scheduling Employees The owner of a haircutting shop wants to convert from a drop-in system of customer arrivals to an dropappointment system. 19 .m.m. Each customer requires an average of 30 minutes of a stylist¶s time.

Total DropDrop-ins 40 30 10 20 30 60 190 Appointments 32 32 32 32 32 32 192 a) How many stylists are required to service 32 appointments in a day? b) What is the minimum number of stylists required per week? c) Use the work shift heuristic procedure to develop the stylists¶ weekly work shift schedules. Thu. 20 . Fri. Tue.Example: Scheduling Employees Mon. Sat. Wed.

Example: Scheduling Employees  Number of Stylists Required per Day Number of customers per day Number of work hours per day per stylist Number of customers served per hour per stylist = 32/((8)(2)) = 2 stylists 21 .

Example: Scheduling Employees  Minimum Number of Stylists Required per Week? Number of Customers per Week Number of Customers per Stylist per Week = 192/((8 hr/day)(4 days/week)(2 cust./hr/stylist)) = 192/64 = 3 stylists 22 .

Tue. 2 2 2 2 2 2 1 1 1 1 1 1 Fri. Sat. Thu. 23 . 2 2 1 1 0 0 Note: Pair of days boxed represent days off. Wed.Example: Scheduling Employees  Stylists¶ Weekly Work Shift Schedules Stylist 1 2 3 Mon.

.. etc. Layouts must focus on merchandising and attractive display of products Employee performance crucial to customer satisfaction Waiting lines used extensively to level demand 24 ..Scheduling Customer-as-Participant Services Customer-as    Must provide customer ease of use/access features. lighting. walkways.

   25 . Managers try to strike a balance between efficiently utilizing resources and keeping customer satisfaction high.Waiting Lines in Service Operations  Waiting lines form because: Demand patterns are irregular or random. Service times vary among ³customers´.

Waiting Line Examples       Computer printing jobs waiting for printing Workers waiting to punch a time clock Customers in line at a drive-up window driveDrivers waiting to pay a highway toll Skiers waiting for a chair lift Airplanes waiting to take off 26 .

Waiting Line Analysis  Assists managers in determining: How many servers to use Likelihood a customer will have to wait Average time a customer will wait Average number of customers waiting Waiting line space needed Percentage of time all servers are idle       27 .

rate at which persons or things arrive (in arrivals per unit of time) Service rate (Q) .a waiting line Channels .Waiting Line Terminology      Queue .number of waiting lines in a queuing system Service phases ± number of steps in service process Arrival rate (P) .rate that arrivals are serviced (in arrivals per unit of time) 28 .

rule that determines the order in which arrivals are serviced Queue length ± number of arrivals waiting for service Time in system ± an arrival¶s waiting time and service time Utilization ± degree to which any part of the service system is occupied by an arrival 29 .Waiting Line Terminology     Queue discipline .

Queuing System Structures  Single Phase .Single Channel S1  Single Phase .Multichannel S1 S2 S3 30 .

Multichannel S11 S21 S31 S12 S22 S32 31 .Queuing System Structures  Multiphase .Single Channel S11 S12  Multiphase .

Definitions of Queuing System Variables P 1/P 1/P µ 1/µ 1/µ n1 nS t1 tS Pn = = = = = = = = = average arrival rate average time between arrivals average service rate for each server average service time average number of arrivals waiting average number of arrivals in the system average time arrivals wait average time arrivals are in the system probability of exactly n arrivals in the system 32 .

Queuing Models  Model 1 Single channel Single phase Poisson arrival-rate distribution arrivalPoisson service-rate distribution serviceUnlimited maximum queue length Examples: SingleSingle-booth theatre ticket sales SingleSingle-scanner airport security station         33 .

Questions to follow «« 34 .Example: Queuing Model 1 Jim Beam pulls stock from his warehouse shelves to fill customer orders. The arrival rate is Poisson distributed. The service rate is Poisson distributed also. Each order received by Jim requires an average of two minutes to pull. Customer orders arrive at a mean rate of 20 per hour.

). or 60/2 = 30/hr. µ. 35 . equals 1/(mean service time).Example: Queuing Model 1  Service Rate Distribution Question What is Jim¶s mean service rate per hour? Answer Since Jim can process an order in an average time of 2 minutes (= 2/60 hr. then the mean service rate.

Example: Queuing Model 1  Average Time in the System Question What is the average time an order must wait from the time Jim receives the order until it is finished being processed (i.e. the average time an order waits in the system is: tS = 1/(µ .20) = 1/10 hour or 6 minutes 36 .P ) = 1/(30 . its turnaround time)? Answer With P = 20 per hour and Q = 30 per hour.

Example: Queuing Model 1  Average Length of Queue Question What is the average number of orders Jim has waiting to be processed? Answer The average number of orders waiting in the queue is: n1 = P2/[µ(µ .P)] = (20)2/[(30)(30-20)] /[(30)(30= 400/300 = 4/3 or 1.33 orders 37 .

Thus. P/Q.Example: Queuing Model 1  Utilization Factor Question What percentage of the time is Jim processing orders? Answer The percentage of time Jim is processing orders is equivalent to the utilization factor. the percentage of time he is processing orders is: P/Q = 20/30 = 2/3 or 66.67% 38 .

Queuing Models  Model 2 Single channel Single phase Poisson arrival-rate distribution arrivalConstant service rate Unlimited maximum queue length Examples: SingleSingle-booth automatic car wash Coffee vending machine         39 .

Children (accompanied of course!) wanting to ride the pony arrive according to a Poisson distribution with a mean rate of 15 per hour.Example: Queuing Model 2 The mechanical pony ride machine at the entrance to a very popular J-Mart store provides 2 Jminutes of riding for $.50. a) What fraction of the time is the pony idle? b) What is the average number of children waiting to ride the pony? c) What is the average time a child waits for a ride? 40 .

5 41 .Example: Queuing Model 2  Fraction of Time Pony is Idle P = 15 per hour Q = 60/2 = 30 per hour Utilization = P/Q = 15/30 = .5 = ..5 Idle fraction = 1 ± Utilization = 1 .

) 2(30)(30 .01667 hours 2 ( .15) or 1 minute 42 .Example: Queuing Model 2  Average Number of children Waiting for a Ride n1  15 15 ! . 5 children Average Time a Child Waits for a Ride 15 t1 = = ! .

Queuing Models  Model 3 Single channel Single phase Poisson arrival-rate distribution arrivalPoisson service-rate distribution serviceLimited maximum queue length Examples: Auto repair shop with limited parking space Bank drive-thru with limited waiting lane drive        43 .

Queuing Models  Model 4 Multiple channel Single phase Poisson arrival-rate distribution arrivalPoisson service-rate distribution serviceUnlimited maximum queue length Examples: Expressway exit with multiple toll booths Bank with multiple teller stations         44 .

simulation is a helpful tool in scheduling resources 45 . and effective workforce critical to success WaitingWaiting-line analysis can be helpful in determining staffing levels In more complex operations. motivated.Scheduling Customer-as-Product Services Customer-as     Wide range of complexity Every facet designed around the customer Highly trained.

Reasons for Simulating Operations     Experimentation with the real system is impossible. Problem under consideration involves the passage of time and simulation could be faster 46 . impractical. Values of the system¶s variables are not known with certainty. System is so complex that mathematical formulas cannot be developed. or uneconomical.

Recommend a course of action. timeSpecify summarizing procedures. Evaluate the results of the simulation.Procedures of Computer Simulation      Define the problem. Specify time-incrementing procedures. Specify the decision rules. computerIdentify the variables and parameters. Develop and computer-program a model of problem.      47 . Gather data and specify variables and parameters. Process the simulation.

Incoming passengers must first have their passports and visas checked. This is handled by one inspector. The time required to check a passenger's passports and visas can be described by the probability distribution on the next slide. 48 .Simulation Example Whenever an international plane arrives at Lincoln airport the two customs inspectors on duty set up operations to process the passengers.

30 .Simulation Example Time Required to Check a Passenger's Passport and Visa 20 seconds 40 seconds 60 seconds 80 seconds Probability .10 49 .40 .20 .

50 . Passengers form a single waiting line with the official inspecting baggage on a first come. the passengers next proceed to the second customs official who does baggage inspections. first served basis.Simulation Example After having their passports and visas checked.

60 .25 .05 51 .Simulation Example The time required for baggage inspection has the following probability distribution: Time Required For Baggage Inspection No Time 1 minute 2 minutes 3 minutes Probability .10 .

19 20 .99 Probability .30 .10 52 .59 60 .Simulation Example  Random Number Mapping Time Required to Check a Passenger's Passport and Visa 20 seconds 40 seconds 60 seconds 80 seconds Random Numbers 00 .20 .40 .89 90 .

10 .25 .05 Random Numbers 00 .94 95 .Simulation Example  Random Number Mapping Time Required For Baggage Inspection No Time 1 minute 2 minutes 3 minutes Probability .24 25 .99 53 .60 .84 85 .

Simulation Example 

NextNext-Event Simulation Records For each passenger the following information must be recorded: When his service begins at the passport control inspection The length of time for this service When his service begins at the baggage inspection The length of time for this service 


Simulation Example 

Time Relationships Time a passenger begins service by the passport inspector = (Time the previous passenger started passport service) + (Time of previous passenger's passport service)


Simulation Example 

Time Relationships Time a passenger begins service by the baggage inspector (If passenger does not wait for baggage inspection) = (Time passenger completes service with the passport control inspector) (If the passenger does wait for baggage inspection) = (Time previous passenger completes service with the baggage inspector)

Simulation Example  Time Relationships Time a customer completes service at the baggage inspector = (Time customer begins service with baggage inspector) + (Time required for baggage inspection) 57 .

Simulation Example A chartered plane from abroad lands at Lincoln Airport with 80 passengers. 58 . Simulate the processing of the first 10 passengers through customs.

Simulation Example  Simulation Worksheet (partial) Passport Control Baggage Inspections Pass. Num. Time End Beg. Time Ran. Time End 1 2 3 4 5 0:00 1:20 2:20 3:00 3:20 93 63 26 16 21 1:20 1:00 :40 :20 :40 1:20 2:20 3:00 3:20 4:00 1:20 2:20 3:00 4:00 4:00 13 08 60 13 68 0:00 0:00 1:00 0:00 1:00 1:20 2:20 4:00 4:00 5:00 59 . Serv. Time Num. Num. Beg. Serv. Time Time Ran.

Num. Time Ran. Beg. Num. Time End 6 7 8 9 10 4:00 4:40 5:40 6:20 7:20 26 70 55 72 89 :40 1:00 :40 1:00 1:00 4:40 5:40 6:20 7:20 8:20 5:00 6:00 7:00 8:00 8:20 40 40 27 23 64 1:00 1:00 1:00 0:00 1:00 6:00 7:00 8:00 8:00 9:20 60 . Time End Beg. Serv. Serv.Simulation Example  Simulation Worksheet (continued) Passport Control Baggage Inspections Pass. Time Num. Time Time Ran.

passenger 1 begins being served by the passport control inspector immediately. 61 . His service time is 1:20 (80 seconds) at which time he goes immediately to the baggage inspector who waves him through without inspection.Simulation Example  Explanation For example.

Simulation Example  Explanation Passenger 2 begins service with passport inspector 1:20 minutes (80 seconds) after arriving there (as this is when passenger 1 is finished) and requires 1:00 minute (60 seconds) for passport inspection. This process continues in this manner. 62 . He is waved through baggage inspection as well.

Simulation Example   Question How long will it take for the first 10 passengers to clear customs? Answer Passenger 10 clears customs after 9 minutes and 20 seconds. 63 .

Simulation Example  Question What is the average length of time a customer waits before having his bags inspected after he clears passport control? How is this estimate biased? 64 .

Simulation Example  Answer For each passenger calculate his waiting time: (Baggage Inspection Begins) . the results tend to underestimate the average waiting time. This is a biased estimate because we assume that the simulation began with the system empty. 120/10 = 12 seconds per passenger. Thus. 65 .(Passport Control Ends) =0+0+0+40+0+20+20+40+40+0 = 120 seconds.

. and controlling approaches first developed in manufacturing Recognized the unique properties of service operations and developed novel management approaches for these operations Classify service operations into three types. wellanalyzing...WrapWrap-Up: World-Class Practice World Successful companies have: Adapted advanced and well-known planning. customer-as-participant. quasi manufacturing.    66 . or customer-ascustomer-ascustomer-as-product..provides framework for analysis.

WrapWrap-Up: World-Class Practice World Factors that create satisfied customers Extrinsic quality of services The facilities.. and atmosphere The chemistry between customer and people in service system. convenience... cost relative to the quantity of services received      67 .friendliness and courtesy Skill. and professionalism of the personnel The value of the service.comfort. competence..

End of Chapter 9 68 .

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