OPEMAN130 Midterms
” Designers begin by compiling
Ms. Emmylou Tolosa
Chapter 5: Service Design
Introduction
 Services are the predominant force in the global economy.
 In Canada, services account for 76% of the labour force and 72%
of GDP.
 In the United States, services account for 80% of the labour
force and 77% of GDP.
 Services account for over 50% of the economies of Brazil, Russia,
Japan, Germany, India, and China.
 Globally, services represent the fastest growing sector of the
economy and account for over 60% of output and 45% of
employment.
 The leading service exporters are the United States, United
Kingdom, Germany, France, and China. Clearly, the effective
design and efficient operation of services are paramount to the
health of the economy.
5.1 The Service Economy
 Innovations in services include smart service devices that use
sensors and artificial intelligence to seemingly meet our every
need, and the sharing economy where peer-to-peer services
connect individual needs and resources.
 The business model of software as a service (SaaS) has
necessitated a new level of understanding of customer
requirements and design theory. Major societal problems, such
as education, health care, disaster relief, and government
services, depend on complex customer-focused processes that
can benefit significantly from an innovative and interdisciplinary
approach to their study and analysis.
5.2 Characteristics of Services
Services are acts, deeds, performances, or relationships that
produce time, place, form, or psychological utilities for customers
 Services can also be defined in contrast to goods. A good is a
tangible object that can be created and sold or used later. A
service is intangible and perishable. It is created and consumed
simultaneously.
 In reality, almost all purchases of goods are accompanied by
facilitating services, and almost every service purchase is
accompanied by facilitating goods
Services can be distinguished from manufacturing by the
following eight characteristics:
1. Services are intangible. Services are experienced, and that
experience may be different for each individual customer.
Designing a service involves describing what the customer is
supposed to “experience.
information on the way people think, feel, and behave (called
psychographics). Cues (such as physical surroundings, server’s
demeanour, and service guarantees) need to be included in
service design to help form or reinforce accurate perceptions
of the service experience and reduce the consumer’s risk. The
quality of a service experience depends largely on the
customer’s service expectations. Expectations can differ
according to a customer’s knowledge, experience, and self-
confidence.
2. Service output is variable. According to a recent survey, the
most important measures of service quality to the customer
are reliability and consistency. Service design, then, must
strive for predictability or robustness. Examples of services
known for their consistency include McDonald’s, Holiday Inn,
and ServiceMaster. These companies use extensive employee
training; set operating procedures; and standardized
materials, equipment, and physical environments to increase
consistency.
3. Services have higher customer contact. In many cases, the
service “encounter” between service provider and customer is
the service. Studies show a direct link between service
provider motivation and customer satisfaction. Moreover,
service providers are not motivated primarily by
compensation, but rather by concurrence with the firm’s
“service concept” and being able to perform their job
competently. High customer contact can interfere with the
efficiency of a service and make it difficult to control its quality
(i.e., there is no opportunity for testing and rework). However,
direct contact with customers can also be an advantage for
services. Observing customers experiencing a service
generates new service ideas and facilitates feedback for
improvements to existing services.
4. Services are perishable. Services can’t be inventoried, the
timing and location of delivery are important. Service design
should define not only what is to be delivered, but also where
and when.
5. The service and the service delivery are inseparable . Service
design and process design must occur concurrently. Service
design also specifies how the service should be provided.
“How” decisions include the degree of customer participation
in the service process, which tasks should be done in the
presence of the customer (called front-room activities) and
which should be done out of the customer’s sight (back-room
activities), the role and authority of the service provider in
delivering the service, and the balance of “touch” versus
“tech” (i.e., how automated the service should be).
6. Services tend to be decentralized and geographically
dispersed. Many service employees are on their own to make
decisions. Multiple service outlets can be a plus in terms of
 rapid prototyping. New ideas can be field-tested with a
minimum disturbance to operations.
7. Services are consumed more often than products. That means
there are more opportunities to succeed or fail with the
customer. These opportunities have been referred to as
“moments of truth.”
8. Services can be easily emulated . Competitors can quickly copy
new or improved services. New ideas are constantly needed to
stay ahead of the competition.
 degree of customization (involvement of the customer in
service design and the delivery)
 labour intensity (involvement of the service provider in
service design and delivery).
 Services with the least degree of customization and
labour intensity, such as airlines and trucking, are most
like manufactured products and are thus best processed
by a service factory.

5.3 The Service Design Process

 Service design is more comprehensive and occurs more often

than product design.
 Service concept defines the target customer and the desired
customer experience. It also defines how a service is different
from others and how it will compete in the marketplace.
 Service package is created to meet customer needs. The package
consists of a mixture of physical items, sensual benefits, and 5.4 Tools for Service Design
psychological benefits.
 Service specifications are developed for performance, design, a. Service Blueprinting - Service blueprinting is the
and delivery. process of recording in graphical form the
 Performance specifications outline expectations and activities and interactions in a service process.
requirements for general and specific customers. The term blueprinting is used to reinforce the
 Design specifications must describe the service in sufficient detail idea that services need to be as carefully
for the desired service experience to be replicated for different designed as a physical product and
individuals at numerous locations. The specifications typically documented with a blueprint of their own.
consist of activities to be performed, skill requirements and
guidelines for service providers, and cost and time estimates.
Facility size, location, and layout, as well as equipment needs.
 Delivery specifications outline the steps required in the work
process, including the work schedule, deliverables, and the
locations at which the work is to be performed.

The Service-Process Matrix

Service processes can be classified according to:
 Example:  Decisions about waiting lines and the management of waiting
lines are based on these averages for customer arrivals and
service times.
 Operating characteristics the average values for characteristics
that describe the performance of a waiting line system.

Basic elements of a waiting line:

(Queue a single waiting line.)

1. Calling population - is the source of the customers to the

waiting line system, and it can be either infinite or finite. An
infinite calling population assumes such a large number of
 The line of interaction is where the customer interacts with the potential customers that it is always possible for one more
service provider face-to-face. customer to arrive to be served. A finite calling population
 The line of visibility separates front-office (or onstage) activities has a specific, countable number of potential customers.
from back-office (or backstage) activities.
2. Arrival rate - is the rate at which customers arrive at the
 The line of support is where the service provider interacts with
service facility during a specified period; most frequently
backstage support personnel to complete their tasks.
described by a Poisson distribution. Average arrival rate, or
how many customers arrive during a period of time, is
b.Front-Office and Back-Office Activities - In manufacturing firms,
signified by λ.
the focus of activities is on the back office (i.e., producing
products efficiently). In contrast, in service firms, the focus is on
3. Service time - the time required to serve customers; most
the front office, interacting with the customer.
frequently described by a negative exponential distribution.
Although this probability distribution is for service times,
 The interactions in the front office influence the customer’s
service must be expressed as a rate to be compatible with the
perception of the service and thus are critical to a successful
arrival rate. The average service rate, or how many customers
design. Typical front-office goals are courtesy, transparency,
can be served in a period of time, is expressed as μ.
responsiveness, usability, and fun.\
 The back office processes material or information to support the
4. Queue Discipline and Length - The queue discipline is the
front-office needs. Typical goals of the back office are efficiency,
order in which waiting customers are served. The most
productivity, standardization, and scalability.
common type of queue discipline is first-come, firstserved—
 Mass customization is an example of a front/back compromise.
the first person or item waiting in line is served first.
c. Servicescapesm- Servicescapes design (1) the space and function  Queues can be of an infinite or finite size or length. An
where the service takes places; (2) the ambient conditions, such infinite queue can be of any size, with no upper limit,
as music, temperature, décor, and noise; and (3) signs, symbols, and is the most common queue structure. A finite queue
and artifacts. is limited in size
 It is important that the servicescape be consistent with the
service concept, and that all the elements be consistent with
Basic Waiting Line Structures
each other.

d. Quantitative Techniques:  Channels - is the number of parallel servers available.

 Phases - denotes the number of sequential servers
5.5 Waiting Line Analysis for Service Improvement each customer must go through to complete service.

To analyze waiting lines, we use a set of mathematical

formulas that make up a field of study called queuing theory.

Elements of Waiting Line Analysis

 Waiting lines form because people or things arrive at the server

faster than they can be served.
 Waiting lines result because customers do not arrive at a
constant, evenly paced rate, nor are they all served in an equal
amount of time.
 the organization will try to make waiting more palatable. (read
4 Basic Waiting Line Structures more sa module)
 Single-Channel, Single-Phase
 Single-Channel, Multiple-Phase Single-Server Waiting Line Model
 Multiple-Channel, Single Phase  The simplest, most basic waiting line structure is the single-
 Multiple-Channel, Multiple-Phase server model. here are several variations of the single-server
 Multiple stages multiple servers waiting line system; however, in the basic single-server model
we assume the following:

Operating Characteristics - describe the performance of the • Poisson arrival rate

waiting line system and that management uses to evaluate the
system and make decisions. It is assumed these operating
characteristics will approach constant, average values after the
system has been in operation for a long time, which is referred to
as a steady state.
Traditional Cost Relationships in Waiting Line Analysis
There is generally an inverse relationship between the cost of
providing service and the cost of making customers wait.
• Exponential service times
• First-come, first-served queue discipline
• Infinite queue length
• Infinite calling population
The basic operating characteristics of this single-server model are
calculated using the following formulas, where λ = mean arrival
rate, μ = mean service rate, and n = the number of customers in
the waiting line system, including the customer being served (if
any).

The probability that no customers

are in the queuing system (either
in the queue or being served)

The probability of
exactly n customers in
the queuing system

Them average number of customers in

the queuing system (i.e., the customers
being serviced and in the waiting line)

The average number of customers in

the waiting line

The average time a customer spends in

the queuing system (i.e., waiting and
being served)

The average time a customer spends

waiting in line to be served

The probability that the server is busy and a

customer has to wait, known as the
 The major determinant of waiting cost is the loss of business utilization factor
that might result because customers get tired of waiting or
frustrated and leave. This business loss can be temporary or The probability that the
permanent. server is idle and a
customer can be served

The Psychology of Waiting

 In some instances, it is not possible to reduce waiting times, or
other important issues besides cost may be involved. When
these situations occur, the problem of providing quality service
often depends more on psychological solutions. In other words,
Advanced Single-Server Models
There are many variations of the single-server model. The most
common are: constant service times, finite queue length, and
finite calling populations
 Constant service times - occur most often when automated
equipment or machinery performs the service. Examples are
vending machines, car washes, and many manufacturing
operations.
 Finite queue lengths - occur when there is a physical limitation
to the length of the waiting line. For example, this can occur
when cars waiting at a bank for an ATM machine are prohibited
Little’s Law
from extending into the street.
 Note that for both the basic single-server and multiple server
 Finite calling population - refers to a situation when the
models, the average time a customer spends in the queuing
number of customers who can arrive to a system is limited,
system is expressed as W = L/λ.
such as invitation-only events, student advisees, or
 This remarkably simple and general formula provides a
maintenance for a fleet of rental cars.
fundamental relationship among three key parameters in a
queuing system and is called Little’s Law
 Little’s Law states that the average number of customers in the
Multiple-Server Waiting Line Model
system is equal to the product of the mean arrival rate into the
system and the average time a customer spends in the system.
 The formulas for determining the operating characteristics for
 Little’s Law is traditionally expressed as L = λW
the multipleserver model are based on the same assumptions
 Note that this relationship also holds when the “system”
as the single-server model
consists of just the “queues” in the system; that is, Lq = λWq.
 Poisson arrival rate
 Exponential service times
***END OF CHAPTER 5***
 Infinite calling population and queue length and
 First-in, first-out (FIFO) queue discipline.
“Tuon mayo beh kay gastador ka! :)”
-@sha.neeee_
 In Single-Server Model has an assumption of μ > λ While in
Multiple-Server Model has an Assumption of sμ > λ Where s =
number of servers

Operating characteristics formulas

The probability that there are no customers in the system
(all servers are idle)

The probability of n customers in the queuing system

The probability that a customer arriving in the system must

wait for service (i.e., the probability that all the servers
are busy)