SUPPORTING FACILITY AND PROCESS FLOWS Chapter 5 Creating

SUPPORTING FACILITY AND PROCESS FLOWS Chapter 5 Creating the Right Environment Mc. Graw-Hill/Irwin Copyright © 2014 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

Learning Objectives • Describe the impact of “servicescapes” on behavior of customers • • • and employees. Identify and discuss environmental dimensions of servicescapes. Identify critical design features of a service supporting facility. Draw a swim lane flowchart, process flow diagram, and a Gantt chart of a service process. Calculate performance metrics such as throughput time and direct labor utilization. Identify bottleneck operation in a product layout and regroup activities to create new jobs that will increase the overall service capacity. Use operations sequence analysis to determine relative locations of departments in a process layout that minimize total flowdistance. 5 -2

Environmental Orientation Considerations • Spatial cues are needed 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. 5 -3

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 5 -4

Servicescape Elements 5 -5

Typology of Servicescapes 5 -6

Facility Design Considerations • Nature and Objectives of Service Organization • Land Availability and Space requirements • Flexibility • Security • Aesthetic Factors • The Community and Environment 5 -7

Types of Services 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 5 -8

Swim Lane Flowchart of Graduate School Admissions 5 -9

Gantt Chart for Mortgage Service 5 -10

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. 5 -11

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. 5 -12

Process Flow Diagram of Mortgage Services 5 -13

Product Layout: Work Allocation Problem 5 -14

Automobile Driver’s License Office (Improved Layout) 5 -15

DMV Office (Flexible Layout) 5 -16

Process Layout: Ocean World Theme Park 5 -17

Process Layout: Relative Location Problem Ocean World Theme Park Daily Flows A A B C D E F B 7 8 C D E F 20 0 5 6 6 10 0 2 15 7 8 10 3 10 6 0 30 5 10 10 1 20 0 6 0 3 Flow matrix A Net flow B C D E 15 30 0 15 6 12 40 10 8 20 8 8 30 6 6 F 10 4 Triangularized matrix Description of attractions: A=killer whale, B=sea lions, C=dolphins, D=water skiing, E=aquarium, F=water rides. 5 -18

Ocean World Theme Park (Proposed Layout) (a) A D Initial layout B E C F (b) Move C close to A C Pair Flow distances AC 30 x 2 = 60 AF 6 x 2 = 12 DC 20 x 2 = 40 DF 6 x 2 = 12 Total 124 (c ) Exchange A and C Pair Flow distances A AE 15 x 2 = 30 C B CF 8 x 2 = 16 AF 6 x 2 = 12 D E F AD 0 x 2= 0 DF 6 x 2 = 12 Total 70 Pair Flow distances CD 20 x 2 =40 D E F CF 8 x 2 =16 DF 6 x 2 = 12 AF 6 x 2 = 12 CE 8 x 2 = 16 Total 96 (d) Exchange B and E and move F Pair Flow distances A F AB 15 x 2 = 30 AD 0 x 2= 0 C E FB 8 x 2 = 16 FD 6 x 2 = 12 D B Total 58 A B 5 -19

Health Maintenance Organization (A) A B C D E F Reception A - 30 0 5 0 0 Waiting room B 10 - 40 10 0 0 Examination C 15 20 1 15 5 5 Laboratory D 5 18 8 - 6 3 X-ray E 0 4 1 2 - 4 Minor surgery F 2 0 0 0 1 5 -20

HMO (A) Questions 1. 2. Beginning with a good initial layout, use operations sequence analysis to determine a better layout that would minimize the walking distance between different areas of the clinic. Defend your final layout based on features other than minimizing walking distance. 5 -21

Health Maintenance Organization (B) Activity Receive prescriptions Type labels Time (sec. ) 24 120 Fill prescriptions 60 Check prescriptions 40 Dispense prescriptions 30 5 -22

HMO (B) Questions 1. 2. Identify the bottleneck activity, and show 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? 5 -23

Esquire Department Store Use CRAFT logic to develop a layout that will maximize customer time in the store. 2. What percentage increase in customer time spent in the store is achieved by the proposed layout? 3. What other consumer behavior concepts should be considered in the relative location of departments? 1. 5 -24

The Role of the Servicescape 5 -25

The Servicescape Concept: a modern farmer’s market for the discerning customer • Aesthetics • Force Flow • Queuing • Results “We want to change the way people eat…” Brian Cronin, General Manager 5 -26

Aesthetics 5 -27

Force Flow 5 -28

Normal Grocery Store Dairy Meat Frozen Produce Grocery & Staples Cashiers Deli 5 -29

Comparison Central Market 60 k ft 2 25, 000 $40 Wine Average Grocery Store Size Transactions / Week Sales / Customer Product Mix 100 k ft 2 50, 000 $20 Groceries 5 -30

“There’s cheese at the end of the maze…” Questions 1. How do the environmental dimensions of the servicescape (ambient conditions, space/function, signs, symbols & artifacts) explain the success of Central Market? 2. Comment on how the servicescape shapes the behaviors of both customers and employees. 5 -31

Topics for Discussion • Compare the attention to aesthetics in waiting rooms that you have • • visited. How did the different environments affect your mood? Give an example of a servicescape that supports the service concept and another that detracts. Explain the success or failure in terms of the servicescape dimensions Select a service and discuss how the design and layout of the facility meets the five factors of nature and objectives of the organization. For Example 5. 3, the Ocean World theme park, make an argument for not locating popular attractions next to each other. The CRAFT program is an example of a heuristic programming approach to problem solving. Why might CRAFT not find the optimal solution to a layout problem? 5 -32

Interactive Exercise The class divides into small groups • One-half of the groups produce examples based on work experience with supportive servicescapes in terms of job satisfaction and productivity. • The other one-half of the groups provide examples of poor servicescapes in terms of job satisfaction and productivity. 5 -33