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Customers Waiting in Lines - Service Operations - Yolanda Williams

Customers Waiting in Lines - Service Operations - Yolanda Williams



The Service Operations of Waiting Lines attempts to remind us that customer needs should be met while they are waiting to be serviced. Also, there is a tremendous reduction in profit by requiring a ...

The Service Operations of Waiting Lines attempts to remind us that customer needs should be met while they are waiting to be serviced. Also, there is a tremendous reduction in profit by requiring a customer to wait too long. When is too long? That is in the mind of the customer.



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    Customers Waiting in Lines - Service Operations - Yolanda Williams Customers Waiting in Lines - Service Operations - Yolanda Williams Presentation Transcript

    • Service Operations and Waiting LinesYolanda WilliamsOperations Mgmt
    •  An Overview of Service Operations Service Response Logistics Waiting… Discuss the psychology of waiting. Laws of Service. Describe how queues are managed. Describe the essential features of a queuing system.Purpose and Objectives
    • 3What are services? Many services are pure services, offering few or no tangibleproducts to customers. Others may have end products with a larger tangible component(e.g., restaurants & repair facilities). Customers are often involved in the production of the service. Services may provide state utility - they do something to thingsowned by the customer (e.g., store supplies & repair machines).
    • 4More on Services Services cannot be inventoried. Services have high levels of customer interactions. Services are decentralized due to inability toinventory & transport services
    • 5Service DeliveryService delivery systems (a continuum) with mass produced, low-customer contact systems at one end and highly customized,high-customer-contact systems at the other.Front of the House Back of the House
    • 6An Overview of Service Operations- Cont.Service Strategy Development:1. Cost LeadershipStrategy-The Low CostProvider – May require large capitalinvestment in automated, state-of-the artequipment and significant efforts in the areasof controlling and reducing costs.2. DifferentiationStrategy- Service that isconsidered unique. Differentiation is createdas companies listen to customers.3. Focus Strategy- Serve a narrow niche betterthan other firms
    • 7Service Response LogisticsService Response Logistics (SRL)The management and coordination of the organization’s activities while a serviceis being performed for customers.1. Service capacity The number of customers per day the firm’s service system isdesigned to serve.2. Distribution channels Distribution channels involve traditional methods & new channels thatincorporate new Internet technologies3. Service quality Customer satisfaction--depends on ability to deliver what customerswant, meet customers’ perceptions and satisfying customers varyingexpectations.4. Waiting times
    • Psychology of Waiting That Old Empty Feeling: Unoccupied time goes slowly A Foot in the Door: Pre-service waits seem longer that in-service waits The Light at the End of theTunnel: Reduce anxiety with attention Excuse Me, But I Was First: Social justice with First Come First Serve queue discipline They Also Serve,Who Sit and Wait: Avoids idle service capacity
    • Cultural Attitudes “Americans hate to wait. So business is trying a trick ortwo to make lines seem shorter…” The NewYorkTimes Standing in line – at the bank, the market, the movies –is the time-waster everyone loves to hate. Stand in justone 15-minute line a day, every day, and kiss goodbye toalmost four days of idle time by year’s end.—Kathleen Doheny
    • 0123456Stoplights JunkMail MissingObjectsHousework WaitinginLineIn a life time, the averageAmericanwill spend--YearsWe are waiting…
    • Approaches to Controlling Customer Waiting Animate: Disneyland distractions, elevatormirror, recorded music Discriminate: Avis frequent renter treatment(out of sight) Automate: Use computer scripts/ voice promptsto address 75% of questions Obfuscate: Amusement park/ Airport stagedwaits
    • Waiting… Waiting in lines does not add enjoyment Waiting in lines does not generate revenueWaiting lines are non-value added occurrences
    •  Cost to provide waiting space Loss of business Customers leaving Customers refusing to wait Loss of goodwill Reduction in customer satisfaction Congestion may disrupt other businessoperationsImplications of Waiting Lines
    • 14What is a Queue? A queue is a waiting line. A queuing system involves customers arriving forservice who sometimes have to wait. Queuing analysis provides: Summary measures for assessing a queuing systemin terms of customers and time. A way to balance the costs of providing service andcosts of congestion.
    • Queue Theory Queuing theory: Mathematical approach to the analysis ofwaiting lines. Importance of Queuing Analysis: Servicing customers can be costly. Retail environments are plagued with customer congestion.Managing that has benefits. Goal of queuing analysis is to minimize the sum of two costs Customer waiting costs Service capacity costs
    • Components of the Queuing SystemCustomerArrivalsServersWaiting LineServicing SystemExitQueue or
    • The Queuing SystemQueue DisciplineLengthNumber of Lines &Line StructuresService TimeDistributionQueuingSystem
    • Essential Features of Queuing SystemsDepartureQueuedisciplineArrivalprocessQueueconfigurationServiceprocessRenegeBalkCallingpopulationNo futureneed forservice
    • Queue ConfigurationsMultiple Queue Single queueTake a NumberEnter3 4826 101211579
    • 20More Queuing systems
    • Examples of Line StructuresSingle ChannelMultichannelSinglePhaseMultiphaseOne-personbarber shopCar washHospitaladmissionsBank tellers’windows
    • Waiting Realities Inevitability of Waiting: Waiting results fromvariations in arrival rates and service rates
    • Customer Service Arrival PatternArrival PatternConstant VariableExample: A partfrom anautomatedmachine arrivesevery 30 seconds.Example:Customersarriving in abank.
    • Service PatternServicePatternConstant VariableExample: Eachpart takesexactly 30seconds tomake.Example: Peoplespending timeshopping.
    • Waiting Realities Economics of Waiting: High utilizationpurchased at the price of customer waiting.Make waiting productive (salad bar) orprofitable (drinking bar).
    • Queuing AnalysisOptimumCost ofservicecapacityCost ofcustomerswaitingTotal costCostService capacityTotalcostCustomerwaiting costCapacitycost= +
    • Assume a drive-up window at a fast food restaurant.Customers arrive at the rate of 25 per hour.The employee can serve one customer every two minutes.Assume constant arrival and service rates.Determine:A) What is the average utilization of the employee?Queue Analysis Example
    • = 25 cust / hr=1 customer2 mins (1hr / 60 mins)= 30 cust / hr= =25 cust / hr30 cust / hr= .8333A) What is the average utilization of theemployee?
    • 29Managing Wait Times - QuantityConsists of the management of actual waiting time & perceivedwaiting time.Need to know: Average arrival rate of the customers Order in which customers will be serviced Average service rate of providers How long will customers wait Ways to make customers wait even longer withoutlowering their perceptions of service quality
    • Laws of Service – Perception Maister’s First Law:Customers compare expectations with perceptions. Maister’s Second Law:Is hard to play catch-up ball. Skinner’s Law:The other line always moves faster. Jenkin’s Corollary:However, when you switch to another other line, theline you left moves faster.
    • 31Managing Wait Times - QualityManaging Perceived Waiting TimesOften, demand exceeds expectations & capacity. Keep Customers Occupied Start the Service Quickly Relieve Customer Anxiety Keep Customers Informed Group Customers Together Design a Fair Waiting System “Underpromise & Overdeliver”
    • Other Quality Approaches Reduce perceived waiting time Magazines in waiting rooms Radio/television In-flight movies Filling out forms Derive benefits from waiting Place impulse items near checkout Advertise other goods/services
    • Remember Me I am the person who goes into a restaurant, sits down, and patientlywaits while the wait-staff does everything but take my order. I am the person that waits in line for the clerk to finish chatting withhis buddy. I am the one who never comes back and it amuses me to see moneyspent to get me back. I was there in the first place, all you had to do was show me somecourtesy and service.The Customer
    • Topics for Discussion Suggest diversions that could make waiting lesspainful. Give a bad and good waiting experience, andcontrast the situations with respect to the aestheticsof the surroundings, diversions, people waiting, andattitude of servers. Suggest ways that management can influence thearrival times of customers. What are the benefits of a fast-food employee takingyour order while waiting in line? Are there any benefits to making the customer wait?