Applied Sciences

Supporting Facility and Process Flows
Chapter 7
McGraw-Hill/Irwin

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

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Course Overview

Define, describe and classify services (Ch 1,2)

Strategic view of service design & development (Ch 3,4)

Process view of quality improvement

(Ch 6,7,8)

Encounter view of customers & employees (Ch 9)

VIEWS

SPECIAL TOPICS

TOOLS

Capacity planning & queuing models

(Ch 11,12,16)

Project management (Ch 15)

Information technology (Ch 5)

Supply Chains & Outsourcing (Ch 13)

Globalization (Ch 14)

Facility location

(Ch 10)

Inventory control

(Ch 18)

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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.
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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
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Facility Design Considerations

Nature and Objectives of Service Organization
Land Availability and Space Requirements
Flexibility
Security
Aesthetic Factors
The Community and Environment
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Types of Services Processes

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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
Process Flow Diagrams

Visualize and document a process
Identify bottlenecks
Determine system capacity
Make improvements
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Process Flow Diagram of Mortgage Service

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

Finish

Processing

Accept

Mortgages

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Mortgage Service Process Gantt Chart

1

2

Every 90 min a new mortgage is completed

3

Rush Order Flow Time = 90 + 15 = 105 min

Process Cycle Time

Fig. 7.5, pg 163

Slide contributed by David Hoyte

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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.
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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.
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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

Work Allocation – Boat Show

1

120

30

2

240

15

3

240

15

In

Out

Collect Payment

Hand Stamp + program

Apply wrist band

What is the Process Capacity?

Where is the Bottleneck?

What if 1 more person is added?

Slide contributed by David Hoyte

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Work Allocation – Boat Show

1

120

30

2

240

15

3

240

15

In

Out

Collect Payment

Hand Stamp + program

Apply wrist band

What is the Process Capacity now?

1

120

30

In

Slide contributed by David Hoyte

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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.

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Automobile Driver’s License Office

Review Payment Violations Eye Test Photograph Issue

1

240

15

2

120

30

3

60

60

4

90

40

5

180

20

6

120

30

Activity

Number(s)

Capacity

per hour

Cycle Time

in seconds

In

Out

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Automobile Driver’s License Office (Improved Layout)

1,4

65

55

3

60

60

3

60

60

1,4

65

55

6

120

30

5

180

20

2

120

30

In

In

Out

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Health Maintenance Organization (B)

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* Must be performed by Pharmacist

Activity Time (sec.)
Receive prescriptions 24
Type labels 120
Fill prescriptions * 60
Check prescriptions * 40
Dispense prescriptions * 30
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?

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HMO (B) Process Flow

1

2

3

4

5

24

Activity

Cycle time

Capacity per hour

150

30

120

60

60

90

40

30

120

What is the bottleneck operation? What is the capacity of the system? Why? How can capacity be increased?

Current staffing: 2 Techs & 3 Pharmacists, each doing one task

Slide contributed by David Hoyte

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HMO (B) Process Flow (old vs. new)

2 Techs

2 Techs 2 Pharma

2 Techs 3 Pharma

Capacity 30 / hr

Capacity 50 / hr

What other benefit do the two symmetrical “cells” provide?

Slide contributed by David Hoyte

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The Role of the Servicescape

Concept: a modern farmer’s market for the discerning customer

Aesthetics
Force Flow
Queuing
Results
The Servicescape

“We want to change the way people eat…” Brian Cronin, General Manager

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Aesthetics

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Force Flow

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Normal Grocery Store

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Deli/Meat

Checkout

Express Lanes

1

3

6

2

5

4

Queuing Systems

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Central Market

Average Grocery Store

60k ft2

100k ft2

Size

Sales / Customer

$40

$20

Transactions / Week

25,000

50,000

Product Mix

Wine

Groceries

Comparison

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“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?

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