p371 chapter 11, 8 and 9

buffer

storage between stages

blocking

a stage must stop because there’s nowhere to put its output.

starving

a stage must stop because no work has arrived

flowchart elements

tasks, flows, decision points and storage or queues. processes can be single stage, multistage or have parallel paths.

true

true or false:

make to order only runs on actual orders with minimal inventory. make to stock runs to forecast. hybrid combines both.

cycle time

the average time between completions of successive units. in a serial process it equals the bottleneck station time.

throughput rate

= 1 hour/cycle time. convert units carefully,

Example:
If cycle time = 3 minutes/unit:

60÷3=20

• Throughput rate = 20 units/hour

👉 Think: How many can we produce in an hour?

throughput time

the average time for one unit to move through the whole system, including waits.

Example:

A product:

• Waits 10 minutes for materials

• Takes 5 minutes to be assembled

• Waits 15 minutes for inspection

• Takes 5 minutes to be inspected

Total:

10+5+15+5=35 minutes10+5+15+5=\mathbf{35\ minutes}

• Throughput time = 35 minutes

👉 Think: How long does the product spend in the system from beginning to end?

utulization

time activated / time available. for a line, total task time / (stations x cycle time)

Example:
A machine is available for 8 hours but operates for 6 hours.

6÷8=0.756 \div 8 = 0.75

• Utilization = 75%

For a production line:

4 stations × 5-minute cycle time = 20 available station-minutes per cycle

If the total task time is 16 minutes:

16÷20=80%16 \div 20 = 80\%

• Utilization = 80%

👉 Think: How much of our available capacity are we actually using?

efficiency

actual output / standard output, or standard time / actual time.

Example:
A worker is expected to produce 100 units, but actually produces 80 units.

80÷100=80%

• Efficiency = 80%

Another way:

If the standard time is 5 minutes/unit, but it actually takes 6 minutes/unit:

5÷6=83.3%

• Efficiency = 83.3%

👉 Think: How well are we performing compared with the standard?

operation time

the total time required for an operation, including setup and running the batch.

Setup time + Run time

Example:

A machine takes:

• 30 minutes to set up

• 2 minutes per unit

• Batch size = 20 units

Run time:

20(2)=40 minutes

Operation time:

30+40=70 minutes

• Operation time = 70 minutes

👉 Think: How long does the whole operation take, including setup?

nothing

nothing

nature of services

services are fundamentally intangible. the customer is the focal point and the organization exists to serve the customer. operations owns the service system, meaning procedures, equipment, facilities and managing the service workforce.

service triangle

this shows that great service requires the service strategy, employees, support systems, and customer to work together.

• service strategy: what’s our plan for serving customers?

• employees: who delivers the service?

• support systems: what tools/processes help employees serve customers?

the customer is in the middle because the whole system is designed around meeting the customer’s needs.

design roadmap

a high-level visual plan that outlines a strategy, major goals, and key timelines for a project or product

1. details: complexity, divergence, blueprint, templates

non-experiential or maintenance services

services focused on maintaining, repairing, or completing a task rather than primarily creating an experience. examples include lawn care, plumbing, legal work, and office cleaning.

experiential side of services

even routine or maintenance services have an experiential side because customers care about how well the services was performed and how they were treated

customer evaluation of service

customers evaluate whether the service was completed correctly, efficiently, courteously, and professionally.

experiential services

services designed around the experience the customer has, rather than only the technical outcome of the service.

four realms of experience

the four categories used to describe experiences:

entertainment: the customer watches or listens to something that entertains them

education: the customer learns something or gains knowledge/skills

escapism: the customer actively participates and feels like they are entering a different world or experience

esthetics: the customer is immersed n the environment but doesn’t necessarily have to actively participate.

co-creation of value

a process in which the customer and service provider work together to create the value of the service

Example: A personal trainer 🏋

• The trainer creates the workout plan and provides guidance.

• The customer participates by doing the exercises, giving feedback, and following the plan.

• Together, they create the customer's fitness experience and results.

customer as co-producer

the customer actively participates in producing the service rather than simply receiving it.

Example: Self-service checkout 🛒

At a grocery store, the customer:

1. Scans their own items.

2. Bags their groceries.

3. Makes the payment.

customer as an input

means the customer enters the service process and is an input of what the service operates on.

Example: Hair salon 💇‍♀

Customer enters → Haircut → Customer leaves with a new hairstyle

The customer is an input because the service is performed on the customer.

relationships as differentiation

a company can stand out from competitors by building strong relationships with customers through trust, communication, and personalized service.

nothing

nothing

horizontal axis

part of the four realms of experience.

customer participation (passive to active)

vertical axis

explains the four realms of experience:

environmental relationship (absorption to immersion)

five experience design principles

guidelines businesses use to create a memorable and enjoyable experience for customers. they help a business design the environment, interactions, and details of a service so the customer has a positive experience, not just receives a service.

• theme the experience: creating a clear, consistent theme/idea that connects all parts of the experience (forum shops in las vegas, ancient rome decor and staff in togas)

• harmonize impressions with positive cues (circle centre parking garages with different color schemes and names)

• eliminate negative cues (cinemark talking trash containers that say thank you)

• mix in memorabilia: giving customers something physical or memorable that reminds them of their post-experience (hard rock t-shirts)

• engage all five senses (mist in the rainforest cafe)

service package

everything a customer receives from a service, including the physical things they use and the actual service experience

• supporting facility: the resources needed to provide the service

• explicit services: the actual service benefits the customer directly experiences

• information: info needed to provide or customize the service

• facilitating goods: physical items the customer receives or uses

• implicit services: the feelings/psychological benefits the customer gets

supporting facility

the physical resources or facilities needed to provide a service

• an airplane for an airline

• a gym and its equipment for a fitness services

explicit services

the direct, observable benefits that a customer receives from a service

information

data used by or from the customer

facilitating goods

the physical items that are provided to or consumed by the customer as part of a service.

• restaurant: food or drink

• doctor: medicin or prescriptions

implicit services

the indirect or psychological benefits a customer receives from a service—such as comfort, safety, status, or a feeling of trust.

service description and experience

what will be done for the customer

service process matrix

used to classify different types of service processes based on how much customer contact and customization they involve.

• service factory: low contact + low customization: airline, hotel, car rental

• service shop: auto repair shop, hospital

• mass service: retail store, supermarket

• professional service: doctor, lawyer, accountant

service factory

a service operation that provides a standardized service to many customers with low customization and low customer interaction

• airlines

• trucking

• hotels

• resorts.

challenges include capital decisions, technology, managing demand to avoid peaks, scheduling delivery

service shop

provides customized services to individual customers, usually with moderate customer involvement and moderate customization.

• low labor, high interaction and high customization.

• hospitals, auto repair, and other repair

challenges include cost increases, maintaining quality, reacting to customer intervention

mass service

serving a large number of customers using a standardized process.

• high labor, low interaction and customization retailing. wholesaling, schools, retail banking

• challenges include: hiring, training, methods control, scheduling workforces, far flung sites, managing growth

professional service

high labor, high interaction and customization.

• doctors, lawyers, accountants, architects

challenges include hiring and training, gaining employee loyalty, managin is a flat hierarchy

structural design elements

• delivery system: process structure, service blueprint, strategic positioning

• facility design: servicescapes, architecture, process flows, layout

• location: geographic demand, site selection

• capacity planning: strategic role, queuing models

managerial design elements

how the organization is MANAGED: these describes how managers lead and operate the organization

information: technology, scalability, internet

quality: measurement, design quality, recovery, six sigma

service encounter: encounter triad, culture, supply relationships, outsourcing

managing capacity and demand: yield management, queue management

complexity

the number of steps in the service blueprint. a clinic is less complex than a general hospital.

divergence

how much discretion the server has to customize the service. an attorney has more than a paralegal.

eight components of a service blueprint

• physical evidence: lobby desk, menu, tray

• customer actions: check in, order food

• onstage contact, process registration

• backstage contact: take bags to room, prepare food

• support processes: registration system, kitchen system

F= FAIL POINT

• line of interaction (between customer actions and onstage contact)

• line of visibility (between onstage contact and backstage contact)

• line of internal interaction (between backstage contact and support processes)

production line approach

a service process where the service is highly standardized and follows a set sequence of steps, similar to an assembly line.

limit discretion, division of labor, substitute technology for people, standardize the service

self service approach (customer as coproducer)

the customer performs most or all of the service themselves, instead of an employee doing it for them.

• smooth service demand, customer generated content

Example: McDonald's kiosk

• You walk in

• Use the touchscreen to choose your food

• Customize your order

• Pay on the kiosk

• Pick up your food

👉 The customer is doing much of the service process.

personal attention approach (customer contact)

a service process where employees provide individualized, customized service based on each customer’s specific needs.

define degree of contact, separate high and low contact operations, sales opportunity and delivery options

A customer tells the hairstylist they want a haircut that is easy to maintain. The stylist asks questions about their lifestyle, recommends a style, and adjusts the haircut to the customer's preferences.

👉 Why? The service is personalized for that specific customer rather than following the exact same process for everyone.

well designed service system

THE THREE T’S

• task,

• treatment,

• tangibles

• be consistent with the firm’s operating focus. be user friendly and robust. make consistent performance easy to maintain. link the front and back offices. manage evidence of quality so customers see value. be cost effective.

the service encounter

occurs whenever the customer interacts with the service, and each one is a moment of truth because the customer forms a judgment right then. the organization owes its frontline provider (the face of. the company) support, training and authority.

encounter triad

this explains the three-way relationship during a service encounter.

• service organization

  • culture, empowerment, control systems, supporting technology, performance evaluation

• customer

  • expectations, attitudes, coproduction

• contact personnel

  • selection, training, ethical climate

• service delivery

  • perceived control, role of scripts, outcome, failure recovery

the tensions are efficiency vs autonomy (organization and personnel) and efficiency vs satisfaction (organization and customer). the issue is who should be dominant to best ensure a successful encounter

customer expectations and attitudes

these describe what customers value and expect when receiving a service.

• economizing customer

  • wants to get the best value for their money

• ethical customer

  • cares about whether the company acts responsibly and ethically

• personalizing customer

  • Wants the service to be customized specifically for them

• convenience customer

  • Values ease, speed, and saving time/effort

self service keeps growing because providers save labor cost and customers gain control, customization, accuracy, convenience and speed, though they need enough direction or scripts.

organization and people

• culture

• empowerment vs delegation

  • delegation hands over a task under management control and empowerment gives authority, information and tools so employees can use judgment for the customer. supporting empowerment means investing in people, using IT to enable personnel, strong recruitment and training, and performance evaluation and pay for performance.

• contact personnel traits

  • flexibility, tolerance for ambiguity, ability to monitor and change behavior from situational cues, and empathy.

• 
  

role of technology in the encounter

it describes how technology is involved when a customer interacts with a service provider. there are two main models

1. face-to-face models: the customer and employee physically interact with each other

2. face-to-screen models: the customer interacts with technology instead of directly interacting with an employee

pre recovery service

this is what happens in the customer’s mind immediately after something goes wrong, but BEFORE the company fixes it. the idea is that the failure occurs, and then several factors influence what happens next. loyalty, service, guarantee, and expectations.

example:

• you order a dress online but it arrives late. if you have been a loyal customer for years and usually receive excellenet service

immediate recovery service

how a service responds right when a service failure happens.

• service becomes aware, speed of recovery, frontline discretion, apology and empathy.

follow up service

what a company does after a service problem or complaint to restore the customer’s satisfaction and trust

internal quality

part of the service profit chain (how happy, supported employees can lead to happy customers and ultimately higher profits)

• workplace design, job latitude, selection, rewards, information, tools

• grows revenue and profit

employee satisfaction and loyalty

part of the service profit chain (shows how employee satisfaction can lead to customer satisfaction and ultimately business profit)

• higher productivity, output quality and capability

• grows revenue and profit

service value

part of the service profit chain (service profit chain explains how taking care of employees can lead to satisfied customers and ultimately higher profits)

• better quality and lower cost, designed for targeted needs

• grows revenue and profit

customer satisfaction and loyalty

part of the service profit chain (the idea that satisfied employees provide better service, which leads to satisfied and loyal customers, resulting in higher profits)

• retention, repeat business, referral

• grows revenue and profit

servicescape

this influences both customer and employee behavior and should fit the service concept. it supports the concept in four ways, as a visual metaphor for the offering, by helping way finding, by encouraging social interaction among customers, and by focusing employee behavior.

• a website can be this!!!

how the ENVIRONMENT affects the customer’s experience

ambient conditions

background of the environment that touches all five senses.

examples include temperature, lighting, noise, music and scent

spatial layout and funcitionality

arrangement of furnishings and equipment and how they relate

examples include menu above the register, drink machines between counter and tables

signs, symbols, and artifacts

explicit or implicit signals of acceptable behavior

• no smoking signs, recycle bins, floor covering quality, artwork

self-service

the customer performs the service themselves, usually with little or no employee help.

elaborate: golf course, water slide park

lean: post office kiosk, e commerce

interpersonal

direct interaction between the customer and employee

elaborate: luxury hotel, airline terminal

lean: budget hotel, bus station

facility design

deciding how a business’s physical space should be set up. things to consider include

• nature and purpose of the organization

• land and space

• flexibility

• security

• aesthetics

HOW the space is built and arranged

retail layout

the main goal of this is to make as much profit as possible from each square foot of space.

• plan how customers will move through the store

• group related products together so they’re easy to find.

common layouts include

• rectangular layout—> straight isles

• angular layout —> aisles are arranged at angles

• force-flow layout —> guides customers through the store in a planned path, less chaotic