Service Design –Session Plan

• Qualitative
– Applying Behavioral Science to Service Encounters
– Three Contrasting Service Designs
– Service Blueprinting and Fail-Safing (poka-yoke)
• Quantitative
– Waiting Line Management (Queuing Analysis)
Psychology of Waiting

Sound of cash
Psychology of Waiting or Waiting Lines

Disneyland,
Amusement Park
 Applying Behavioral Science to Service Encounters

1. The front-end and back-end of the encounter are not created

equal
2. Segment the pleasure, combine the pain
3. Let the customer control the process
4. Pay attention to norms and rituals
5. People are easier to blame than systems
6. Let the punishment fit the crime in service recovery

9-4
 Service Guarantees as Design Drivers
1. Any guarantee is better than no guarantee
2. Involve the customer as well as employees in the design
3. Avoid complexity or legalistic language
4. Do not quibble or wriggle when a customer invokes a
guarantee
5. Make it clear that you are happy for customers to invoke the
guarantee

9-5
Three Contrasting Service Designs

The production line approach – assembly line aproach

• McDonald’s
• Service delivery is treated much like manufacturing

The self-service approach

• ATM machines
• Customer takes a greater role in the production of the service

The personal attention approach

• Ritz-Carlton Hotel Company

9-6
 Service Blueprinting and Fail-Safing
• The standard tool for service process design is the flowchart
– May be called a service blueprint
• A unique feature is the distinction between high customer
contact aspects of the service and those activities the
customer does not see
– Made by a “line of visibility”

9-7
Service Fail-Safing Poka-Yokes (A Proactive Approach)
• Poka-yokes: procedures that block a mistake from becoming a service defect
– Common in factories
• Many applications in services
– Warning methods
– Physical or visual contact methods
– Three T’s
1. Task to be done
2. Treatment accorded to the customer
3. Tangible features of the service
• Must often fail-safe actions of the customer as well as the service workers

9-8
 Poka-yoke for an automobile service station

F: Customer arrival unnoticed

F: Incorrect diagnosis of problem F: Failure
PY: Bell ring or display to signal
arrivals PK: High tech checklists, experts systems, PY: Poka-Yoke
diagnostic information
 Introduction
• Queues (waiting lines) very common
• Goal is typically to obtain the best level of service
• Simple systems – analytical modeling
• Complex systems – computer simulation
 Queuing System Costs

Cost of Operating Service Facility Total Expected Cost

Cost of Providing Service

(Service Cost)

Cost of Waiting Time

(Waiting Cost)

* Service Level
Optimal
Service
Level
 Arrival Characteristics
• Size of the arrival population
• Infinite or finite
• Arrival distribution
• Arrival rate
• Average arrival time
• Poisson distribution
• Behavior
• Patient, balking or reneging
 Poisson Distribution

where

X = number of arrivals per unit of time (e.g.,

hour)
P(X) = probability exactly X arrivals
l = average arrival rate (i.e., average number of
arrival per unit of time)
e = 2.7183 (known as the exponential constant)
 Poisson Distribution

0.25
Probability

0.20

0.15

0.10

0.05

0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 10 11
X X
l = 2 Distribution l = 4 Distribution
 Queue Characteristics
• Length
– Finite (limited) or infinite (unlimited)
• Discipline
– FIFO common
– Other ways to prioritize arrivals
 Service Characteristics
• Configuration
• Servers (channels) and phases (service stops)
• Single-server, multiple-server
• Single phase, multiphase system
• Service Distribution
• Constant or random
• Exponential distribution
• Service rate, service time
 Configurations
Queue
Service Departures
Arrivals Facility After Service

Single-Server, Single-Phase System

Queue
Phase 1 Phase 2 Departures
Arrivals Service Service
after Service
Facility Facility

Single-Server, Multiphase System

 Configurations

Service
Facility Departures
Queue 1

Service
Arrivals Facility after
2

Service
Facility Service
3

Multi-Server, Single-Phase System

 Configurations

Type 1 Type 2
Service Service
Queue Facility Facility
1 1
Departures
Arrivals after service
Type 1 Type 2
Service Service
Facility Facility
2 2

Multi-Server, Multiphase System

 Exponential Distribution

where

t = service time
P(t) = probability that service time will be greater
than t
m = average service rate (i.e., average number of
customers served per unit of time)
e = 2.7183 (known as the exponential constant)
 Exponential Distribution
1.0 –
Probability That Service Time ≥ t = e–mt for t ≥ 0
0.9 –
Probability That Service Time ≥ t 0.8 –
Average service Rate = 3 Customers per Hour
0.7 –  Average Service Time = 20 Minutes (or 1/3 Hours)
per Customer
0.6 –
0.5 – m = Average Service Rate
0.4 –
0.3 – Average Service Rate =
1 customer per hour
0.2 –
0.1 –
0.0 |– | | | | | | | | | | | |
0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 3.00
Time t in Hours
 Measuring Queue Performance
• r = utilization factor of the system
(i.e., probability all servers are busy)
• Lq = average length (i.e., the number of
customers) of the queue
• L = average number of customers in the
system (i.e., the number in the queue
plus the number being served)
• Wq = average time that each customer
spends in the queue
 Measuring Queue Performance
• W = average time that each customer
spends in the system (i.e., the time
spent waiting plus the time spent being
served)
• P0 = probability that there are no customers
in the system (i.e., the probability that
the service facility will be idle)
• Pn = probability that there are exactly n
customers in the system
 Kendall’s Notation
M/M/s
where
M = the arrival probability distribution. Typically
choices are M (Markovian) for a Poisson distribution,
D for a constant or deterministic distribution, or G for
a general distribution with a known mean variance.
M = the service time probability distribution. Typical
choices are M for an exponential distribution, D for a
constant or deterministic distribution, or G for a
general distribution with a known mean and variance.
s = number of servers.
 Queuing Models Studied
NAME
(KENDALL # OF TIME POPLN.
NOTATION) EXAMPLE SERVERS PATTERN SIZE
Simple system Information Single Exponential Unlimited
(M/M/1) counter at
department store
Multiple-server Airline Multiple Exponential Unlimited
(M/M/s) ticket
counter
Constant service Automated Single Constant Unlimited
(M/D/1) car wash
General service Auto repair Single General Unlimited
(M/G/1 shop
Limited Shop with Multiple Exponential Limited
population exactly ten
(M/M/s/∞/N) machines that
might break

All models are single phase with a Poisson arrival pattern and a FIFO queue discipline
 Queuing Models Studied
1. Arrivals follow the Poisson probability
distribution
2. FIFO queue discipline
3. A single-phase service facility
4. Infinite, or unlimited, queue length. That is,
the fourth symbol in Kendall’s notation is ∞
5. Service systems that operate under steady,
ongoing conditions. This means that both
arrival rates and service rates remain
stable during the analysis.
 M/M/1 Model
• Assumptions
1. Arrivals are served on a FIFO basis.
2. Every arrival waits to be served, regardless of the length
of the line; no balking or reneging.
3. Arrivals are independent, the average number of arrivals
(the arrival rate) is constant.
4. Arrivals are described by a Poisson probability
distribution, infinite or very large population.
5. Service times vary from one customer to the next, are
independent of each other, with a known average rate.
6. Service times occur according to the exponential
probability distribution.
7. The average service rate is greater than the average
arrival rate; that is, m > l.
 Little’s Law
• The long-term average number L of customers in a stationary
system is equal to the long-term average effective arrival rate λ
multiplied by the average time W that a customer spends in
the system.
• Expressed algebraically the law is
• L= λW
 Operating Characteristics
l = average number of arrivals per time period (e.g., per hour )
m = average number of people or items served per time period

1. Average server utilization in the system:

2. Average number of customers or units waiting in line for service:

3. Average number of customers or units in the system:

 Operating Characteristics
4. Average time a customer or unit spends waiting in line for service:

5. Average time a customer or unit spends in the system:

6. Probability that there are zero customers or units in the system:

7. Probability that there are n customers or units in the system:

 Problem 1.1
• Western National Bank is considering opening a drive through window
for customer service. Management estimates that customers will arrive at
the rate of 15 per hour. The teller who will staff the window can service
customers at the rate of one every three minutes.
Find
– Utilization of the teller
– Average number in line
– Average number in system
– Average waiting time in line
– Average waiting time in system, including service

31
  15
   0.75  75 percent
 20

Lq 

2

 15
2
 2.25 customers
      20 20  15
 15
Ls    3 customers
   20  15
Lq 2.25
Wq    0.15 hours or 9 minutes
 15
Ls 3
Ws    0.2 hour or 12 minutes
 15 32