Supporting Facility and Process Flows Creating the Right Environment McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives Describe the impact of the “servicescape” on the behavior of customers and employees. Identify and discuss the three environmental dimensions of servicescapes. Identify the six critical design features of a service supporting facility. Draw a process flow diagram and calculate performance metrics. Identify the bottleneck operation in a product layout and rebalance for increased capacity. Use operations sequence analysis to minimize flow-distance in a process layout. Recommend facility design features to remove anxiety of disorientation. 7-2

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. 7-3

Servicescape Elements 7-4

Typology of Servicescapes 7-5

Facility Design Considerations Nature and Objectives of Service Organization Land Availability and Space Requirements Flexibility Security Aesthetic Factors The Community and Environment 7-6

Types of Services Processes Process Type Service Example 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 7-7

Swim Lane Flowchart of Graduate School Admissions Applicant Admissions Clerk Graduate Secretary Advisor Faculty Panel Dean Financial Aid Review Take GRE Request References Wait Create Folder Contact Batch Files Files Telephone Interviews Acceptance Letter Denial Make Selection Yes Complete ? No Send Letter Close Folder Application Form 7-8

Gantt Chart for Mortgage Service Property Survey Time in Minutes 30 60 90 120 150 180 210 240 270 Credit Report Title Search Final Approval Activity Schedule 1 2 3 7-9

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. 7-10

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. 7-11

Process Flow Diagram of Mortgage Services   Property Survey CT=90 min. Yes Approved Mortgages Completed Applications Final Approval CT=15 min. Mortgage Applications No Credit Report CT=45 min. Title Search CT=30 min. Unapproved Mortgages Finish Processing Accept Mortgages 7-12

Product Layout: Work Allocation Problem Automobile Driver’s License Office Review Payment Violations Eye Test Photograph Issue 1 240 15 2 120 30 3 60 4 90 40 5 180 20 6 120 30 In Out Activity Number(s) Capacity per hour Cycle Time in seconds 7-13

Automobile Driver’s License Office (Improved Layout) 1,4 65 55 3 60 In Out 2 120 30 5 180 20 6 120 30 1,4 65 55 3 60 In 7-14

Process Layout: Relative Location Problem Ocean World Theme Park Daily Flows A B C D E F A B C D E F A 7 20 5 6 15 30 15 6 B 8 6 10 2 12 40 10 8 Net flow C 10 6 15 7 8 20 8 8 D 30 5 10 3 30 6 E 10 10 1 20 6 10 F 6 3 4 Flow matrix Triangularized matrix Description of attractions: A=killer whale, B=sea lions, C=dolphins, D=water skiing, E=aquarium, F=water rides. 7-15

Ocean World Theme Park (Proposed Layout) Initial layout (b) Move C close to A Pair Flow distances Pair Flow distances AC 30 * 2 = 60 CD 20 * 2 =40 AF 6 * 2 = 12 CF 8 * 2 =16 DC 20 * 2 = 40 DF 6 * 2 = 12 DF 6 * 2 = 12 AF 6 * 2 = 12 Total 124 CE 8 * 2 = 16 Total 96 (c ) Exchange A and C (d) Exchange B and E and move F AE 15 * 2 = 30 AB 15 * 2 =30 CF 8 * 2 = 16 AD 0 * 2 = 0 AF 6 * 2 = 12 FB 8 * 2 = 16 AD 0 * 2 = 0 FD 6 * 2 = 12 DF 6 * 2 = 12 Total 58 Total 70 C A B C A B D E F D E F A A F C B C E D E F D B 7-16

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 7-17

Health Maintenance Organization (A) B C D E F Reception - 30 5 Waiting room 10 40 Examination 15 20 1 Laboratory 18 8 6 3 X-ray 4 2 Minor surgery 7-18

HMO (A) QUESTIONS Beginning with a good initial layout, use operations sequence analysis to determine a better layout that would minimize the walking distance between different areas of the clinic. Defend your final layout based on features other than minimizing walking distance. 7-19

Health Maintenance Organization (B) Activity Time (sec.) Receive prescriptions 24 Type labels 120 Fill prescriptions 60 Check prescriptions 40 Dispense prescriptions 30 7-20

HMO (B) Questions Identify the bottleneck activity, and show how capacity can be increased by using only two pharmacists and two technicians. In addition to savings on personnel costs, what benefits does this arrangement have? 7-21

Esquire Department Store Use CRAFT logic to develop a layout that will maximize customer time in the store. What percentage increase in customer time spent in the store is achieved by the proposed layout? What other consumer behavior concepts should be considered in the relative location of departments? 7-22

The Role of the Servicescape 7-23

The Servicescape Concept: a modern farmer’s market for the discerning customer Aesthetics Force Flow Queuing Results “We want to change the way people eat…” Brian Cronin, General Manager 7-24

Aesthetics 7-25

Force Flow Produce Flowers Meat Seafood Cheese Cashiers Beer & Wine Info Coffee Entrance Cafe Cashiers Beer & Wine Dairy Bakery Deli Grocery & Staples Catering Exit 7-26

Normal Grocery Store Cashiers Frozen Dairy Meat Produce Deli Grocery & Staples 7-27

Queuing Systems Express Lanes Checkout Deli/Meat 6 1 5 3 4 2 7-28

Comparison Central Market Average Grocery Store Size 100k ft2 60k ft2 Size Transactions / Week 25,000 50,000 $40 Sales / Customer $20 Wine Product Mix Groceries 7-29

“There’s cheese at the end of the maze…” Questions How do the environmental dimensions of the servicescape (ambient conditions, space/function, signs, symbols & artifacts) explain the success of Central Market? Comment on how the servicescape shapes the behaviors of both customers and employees? 7-30

Recommendations for Improvement New Customer Orientation Greeters Signage (internal and external) Maps Parking and Traffic Flow 7-31

Topics for Discussion Compare the attention to aesthetics in waiting rooms that you have visited. How did the different environments affect your mood? Give an example of a servicescape that supports the service concept and another that detracts. Explain the success or failure in terms of the servicescape dimensions Select a service and discuss how the design and layout of the facility meets the five factors of nature and objectives of the organization. For Example 9.3, the Ocean World theme park, make an argument for not locating popular attractions next to each other. The CRAFT program is an example of a heuristic programming approach to problem solving. Why might CRAFT not find the optimal solution to a layout problem? 7-32

Interactive Exercise The class divides into small groups One-half of the groups produce examples based on work experience with supportive servicescapes in terms of job satisfaction and productivity. The other one-half of the groups provide examples of poor servicescapes in terms of job satisfaction and productivity. 7-33