1. Supporting Facility and Process Flows Chapter 7
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Course Overview Define, describe and classify services (Ch 1,2)
SPECIAL TOPICS
VIEWS
TOOLS
Information technology (Ch 5)
Strategic view of service design & development (Ch 3,4)
Capacity planning & queuing models
(Ch 11,12,16)
Project management (Ch 15)
Supply Chains & Outsourcing (Ch 13)
Process view of quality improvement
(Ch 6,7,8)
Facility location
(Ch 10)
Globalization (Ch 14)
Encounter view of customers & employees (Ch 9)
Inventory control
(Ch 18)

3. 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.

4. 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
Allow customers to see both into and through the space

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

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. Process Flow Diagrams Visualize and document a process
Identify bottlenecks
Determine system capacity
Make improvements

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

9. Mortgage Service Process Gantt Chart
Rush Order Flow Time = = 105 min 3 1 2
Process Cycle Time
Fig. 7.5, pg 163
Every 90 min a new mortgage is completed
Slide contributed by David Hoyte

10. 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.

11. 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.

12. Bottlenecks
When flow is not synchronized, process rate is limited by the “bottleneck”
The bottleneck constrains throughput. The rate of total throughput is the rate of the bottleneck
Time lost on the bottleneck is time lost in the whole process
Slide contributed by David Hoyte

13. Work Allocation – Boat Show1
120 30 2
240 15 3
240 15
Out In
Collect Payment
Hand Stamp + program
Apply wrist band
15 sec cycle = 4 customers per min = 4 x 60 = 240 customers per hour
Capacity Calculation:
What is the Process Capacity?
Where is the Bottleneck?
What if 1 more person is added?
Activity
Number(s)
Capacity
per hour
Cycle Time
in seconds
Slide contributed by David Hoyte

14. Work Allocation – Boat Show1
120 30 In 2
240 15 3
240 15
Out 1
120 30 In
Collect Payment
Hand Stamp + program
Apply wrist band
What is the Process Capacity now?
Slide contributed by David Hoyte

15. Options for Eliminating a Bottleneck
Add another worker to the job.
Provide aid to reduce activity time (e.g. automating an activity)
Regroup the tasks to create a new line balance with different activity assignments.
Goal: all jobs/activities should be of nearly equal duration.

16. 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

17. 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

18. Health Maintenance Organization (B)
Activity
Time (sec.)
Receive prescriptions 24
Type labels
120
Fill prescriptions * 60
Check prescriptions * 40
Dispense prescriptions * 30
* Must be performed by Pharmacist

19. 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?

20. HMO (B) Process Flow
Current staffing: 2 Techs & 3 Pharmacists, each doing one task
Activity 1 2 3 4 5
150 30 60 90
120 24
120 60 40 30
Cycle time
Capacity per hour
What is the bottleneck operation? What is the capacity of the system? Why? How can capacity be increased?
Slide contributed by David Hoyte

21. HMO (B) Process Flow (old vs. new)1 2 3 4 5 24
150 30
120 60 90 40
Capacity 30 / hr
2 Techs 3 Pharma
1, 2
144
3,4,5 25
130
27.7
Capacity 50 / hr
2 Techs Pharma
What other benefit do the two symmetrical “cells” provide?
2 Techs
Slide contributed by David Hoyte

22. The Role of the Servicescape

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

24. Aesthetics

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

26. Normal Grocery Store Cashiers Frozen Dairy Meat Produce Deli
Grocery & Staples

27. Queuing Systems
Express Lanes
Checkout
Deli/Meat 6 1 5 3 4 2

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

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?