This document discusses key considerations for designing service facilities and managing process flows. It covers environmental orientation, servicescape design, facility typology, design considerations, process analysis terminology, examples of process flow diagrams and layouts, strategic location considerations, front and back office location factors, and analytical tools for location decisions. The key themes are creating positive customer and employee experiences through facility design while also managing efficient process flows.

1. Service Facilities and Process Flows

2. 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

3. ServicescapesDesigning 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. Typology of Servicescapes
Who Performs
in Servicescape
Physical Complexity of the Servicescape
Elaborate Lean
Self-service
(customer only)
Golf course
Water slide park
Post office kiosk
E-commerce
Interpersonal
(both)
Luxury hotel
Airline terminal
Budget hotel
Bus station
Remote service
(employee only)
Research lab
L.L. Bean
Telemarketing
Online tech support

5. Facility Design ConsiderationsNature and objectives of service organization
Land availability and space requirements
Flexibility
Security
Aesthetic factors
The community and environment
How are Fulton Hall and this classroom designed with
respect to these considerations?

6. Process Analysis Terminology
for Managing Flow
Bottleneck is the operation or resource that limits
production.
Process Cycle Time is the average time between
completions of successive units and is limited by the
bottleneck operation.
Capacity is a measure of the maximum output per unit
time.
Capacity Utilization is a measure of how much output is
achieved relative to the actual capacity.
Throughput Time is the time to complete a process from
time of arrival to time of exit. It is the sum of the critical
path operations times plus any waiting time.

7. Process Flow Diagram of
Mortgage Service
What is the throughput time for this process?
How could the process be changed to improve its flow?
Property Survey
CT=90 min.
Credit Report
CT=45 min.
Title Search
CT=30 min.
Unapproved
Mortgages
Approved
Mortgages
Completed
Applications
Mortgage
Applications
Final Approval
CT=15 min.
Yes
No

8. Facilities LayoutFacilities should be laid out to:
◦ Create an environmental orientation
◦ Affect employee and customer behavior
◦ Reflect the service design goals
◦ Manage flow
Comment on the layout of the following facility: Ultimate Fitness Club

9. Strategic Location
ConsiderationsFlexibility of a location is a measure of the degree to which the
service can react to changing economic conditions.
◦ Elasticity of demand, location risk management (portfolio approach),
responsiveness
Competitive positioning refers to methods by which the firm can
establish itself relative to its competitors.
◦ Barriers to competition, establishing market awareness
Demand management is the ability to control the quantity, quality,
and timing of demand.
◦ Especially important when capacity is relatively fixed.
Focus is offering the same narrowly defined service at many
locations.
◦ Makes expansion easier but can result in cannibalization.

10. Location Planning
ConsiderationsCompetitive clustering (among competitors)
◦ e.g. auto dealers, motels
Saturation marketing (same firm)
◦ Urban and high traffic areas, e.g. Au Bon Pain
Marketing intermediaries as a distribution channel
◦ e.g. credit cards, insurance
Substitute Communication for Travel
◦ e.g. remote health care, direct deposit
Separation of front from back office
◦ Co-location vs. efficiency considerations (e.g. remote fast-food ordering)
Impact of the Internet on service location
◦ Virtual location and visibility (e.g. Amazon.com, eBay)
Site-specific considerations (e.g. traffic, zoning, regulations)

11. Front Office and Back Office
Location Considerations
Front Office Back Office
External
Customer
(consumer)
Is travel out to customer or
customer travel to site?
Can electronic media substitute
for physical travel?
Is location a barrier to entry?
Is service performed on
person or property?
Is co-location necessary?
How is communication
accomplished?
Internal
Customer
(employee)
Availability of labor?
Are self-service kiosks an
alternative?
Are economies of scale
possible?
Can employees work from
home?
Is offshoring an option?

12. Analytical Tools for Location
Decisions
Regression modeling (determining location factors that
drive profitability)
Optimization techniques
◦ e.g. minimize average distance travelled (euclidean or
metropolitan metric), maximize market share (Huff model)
Multiple location techniques
◦ Location set covering or maximal covering
Location intelligence products