DESIGNING AND MANAGING

SERVICE DELIVERY PROCESSES

CHAPTER 3
CONTENTS

1. Contents and requirements of designing service delivery

processes

2. Outlining the service delivery process

3. Analyzing the service delivery process

4. The influence of technology on designing and managing

service delivery processes
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Contents of designing service delivery processes

1. Determine service concept 2. Service flow vs. customer

with two categories of system flow
elements: 3. Front-office area vs. back-
 Structural (delivery system, office area
facility design, location,
capacity planning)
 Managerial (information,
quality, service encounter,
capacity and demand
management)
3
Requirements of designing service delivery
processes

▪ Ensure the specialization of the service delivery

process

▪ Ensure the balance of the service delivery process

▪ Ensure facilitating customer participation
▪ Ensure the smooth and continuous delivery process
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OUTLINING THE SERVICE
DELIVERY PROCESS
OUTLINING THE SERVICE DELIVERY PROCESS

Definition
Outlining a service production process is to
determine key elements involved in the process,
expected outcome, functional and technical
characteristics, as well as spatial division of
customer flows and service flows.
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OUTLINING THE SERVICE DELIVERY PROCESS

Benefits

 Guide service staff through the process in order to

deliver the service consistently

 Help the firm proactively prepare resources for the

service delivery process

 Be an effective management tool 7

OUTLINING THE SERVICE DELIVERY PROCESS

General outline
Start Produce & deliver Finish

Take the customer’s Take place before or Proceed with

order, check after the customer visits payment, give the
the service system, customer a send-off,
availability, reply to
simultaneously with the
the customer handle other
consumption process
necessary tasks

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OUTLINING CUSTOMER FLOWS

SERVICE
Back-office area
SYSTEM
Front-office area

Order
Take
order
 Produce &
deliver
Finish 
Evaluation
9

MEASURES TO CONTROL CUSTOMER FLOWS

Control:
- the size of the flows
- the moving speed of the flows
- the moving direction of the flows
By
- Controlling the number of customers coming at a specific time (delivering
queue number tickets, allowing reservation, using some marketing
measures,…)
- Organizing waiting line
- Designing appropriate (usually customer-oriented) service management
(facilities layout, symbols, direction signs,…)
OUTLINING SERVICE FLOWS

SERVICE SYSTEM


Back-office area Front-office area

Prepare Take order


 Order

Support Produce & deliver


Clean Proceed
with
payment
Say
goodbye  11
Evaluation
GROUP TASK

Each group is assigned one of

the following services at DUE to
draw its service flow:

a. Motorbike parking service

b. Cafeteria

c. Borrow/return books
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GROUP TASK

Each group draws the service flow

on an A0 paper in advance and bring
it, together with a red pen, to the
class.

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GROUP WORK

What can you do to improve the

effectiveness of the service
process you performed in the
class, in terms of staffing,
equipment management,
customer participation and
space layout
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GROUP WORK

Groups receive pieces of paper to write down your solutions,

each piece of paper has one solution

▪ Green paper for staffing

▪ Orange paper for equipment and facilities

▪ Yellow paper for customer participation

▪ Pink paper for space layout

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GROUP WORK

Customer Space
Staffing Equipment
participation layout

CHECK

STUDENTS
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TYPES OF PROCESSES

Process
Service Example Characteristic Management Challenge
Type
One-of-a-kind
Project Consulting Staffing and scheduling
engagement

Many specialized Balancing utilization and

Job shop Hospital
departments scheduling patients

Group of customers Pricing perishable asset

Batch Airline
treated simultaneously (seat inventory)

Fixed sequence of Adjust staffing to demand

Flow Cafeteria
operations fluctuations
Maintenance and capacity
Continuous Electric Utility Uninterrupted delivery
planning
FLOWCHARTING

The ability to diagram a process, identify the bottleneck

operation, and determine the system capacity are
fundamental skills in managing service operations and making
improvements.
“If you can’t draw it, then you don’t understand it. ”
-Albert Einstein-
FLOWCHARTING

Application Take Request

Wait
Applicant form GRE references

Create Send letter

Admissions Folder No Contact
folder Close folder
clerk complete? applicant
Yes
Graduate Denial letter Acceptance
Batch files letter
Secretary
Graduate Telephone
Review files
Advisor interviews

Faculty Panel Make selection

No

Graduate Dean Yes

Review Financial aid
Swim lane flowchart of graduate school admissions
FLOWCHARTING

Symbols used in flowcharting:

Terminator: An ellipse represents a start or stop in a

process.
Operation: A rectangle represents a process or action
step.
Decision: A diamond represents a question or branch.

Wait: A triangle represents a delay (time in queue) or

inventory of goods.
Flow: An arrow shows movement of customers, goods, or
information.
FLOWCHARTING

Accept
mortgages Property survey
CT = 90 min. Approved
Yes mortgages
Mortgage
applications Completed
applications Final approval
CT = 15 min.

Title search
Credit report
CT = 30 min.
CT = 45 min.
No

Unapproved
mortgages
Finish
processing

Process flow diagram of mortgage service

Blueprint for luxury hotel. Source: Fitzsimmons et al. (2014)
FLOWCHARTING

Accept
mortgages Property survey
CT = 90 min. Approved
Yes mortgages
Mortgage
applications Completed
applications Final approval
CT = 15 min.

Title search
Credit report
CT = 30 min.
CT = 45 min.
No

Unapproved
mortgages
Finish
processing

Process flow diagram of mortgage service

PROCESS TERMINOLOGY

Cycle time (CT)

• Cycle time is the average time between completions of
successive units. For an operation, CT is the average service
time to perform the activity.
• Cycle time could also apply to a work area in which several
servers are performing the same operation.
• Cycle time of the entire system is defined as the time between
successive customers exiting during a busy period.
GANTT CHART

Activity Schedule

Property survey
1 2 3

Credit report
1 2 3

Title search
1 2 3

Final approval
1 2 3

Time in minutes 30 60 90 120 150 180 210 240 270

Gantt chart of mortgage service

PROCESS TERMINOLOGY

Bottleneck
▪ A bottleneck is the operation
that limits production. Usually
the bottleneck is the slowest
operation (or longest CT).
▪ CT for the entire system = CT
for bottleneck operation(s) 26
BOTTLENECK – REASONS?

The slowest operation(s)

The rate of customer arrivals

Labor availability

Information
27
PROCESS TERMINOLOGY

Capacity
• Is a measure of output per unit of time when fully busy (e.g.,
activity is never idle).
• The unconstrained capacity of any operation is measured as
1/CT.
• The capacity of the entire system is determined by the
bottleneck capacity.
PROCESS TERMINOLOGY

Capacity utilization
• Is a measure of how much actual output is achieved relative
to the process capacity when fully busy.
• Due to the variability in customer arrivals and service times, it
is impossible to achieve 100 percent capacity utilization for
service firms.
PROCESS TERMINOLOGY

Direct labor utilization

• Is a measure of the percentage of time that workers actually
contribute to a fully busy service organization.
• Direct labor utilization for the mortgage service process is
calculated as:

Total direct labor content

Direct labor utilization =
(Process cycle time) x (Number of workers)
PROCESS TERMINOLOGY

Total direct labor content

Direct labor utilization =
(Process cycle time) x (Number of workers/areas)

Activity 1 > Activity 2 > Activity 3

The denominator = Total direct labor content + Total idle time of the staff
(during average time needed to create one unit of output, aka CTsystem)

Total direct labor content = CT1 + CT2 + CT3

Total idle time of the staff = ∑(CTsystem– CTi)

Direct labor utilization = (CT1 + CT2 + CT3)/[(CT1 + CT2 + CT3) + (CT –

CT1) + (CT – CT2) + (CT – CT3)]
= (CT1 + CT2 + CT3)/(CT*3)
THE WORK ALLOCATION PROBLEM IN THE
FLOW PROCESS

• Flow process: fixed sequence of operations

• Staffing requires allocating tasks among servers to create jobs
that require nearly equal time.
• The job requiring the most average time per customer creates
a bottleneck and defines the capacity of the service line.
• Any change in the capacity of the service line requires that
attention be given to the bottleneck activity
THE WORK ALLOCATION PROBLEM IN THE
FLOW PROCESS
Cycle time,
Activity Description
sec.
1 Review application for correctness 15
2 Process and record payment 30
3 Check for violations and restrictions 60
4 Conduct eye test 40
5 Photograph applicant 20
6 Issue temporary license (state trooper) 30
License renewal process times
THE WORK ALLOCATION PROBLEM IN THE
FLOW PROCESS
*
In 1 2 3 4 5 6 Out
240 120 60 90 180 120
15 30 60 40 20 30

* (a)
In 1, 4 3 * *
65 60
55 60 2 5 6 Out
120 180 120
30 20 30
In 1, 4 3
65 60
55 60 (b) Activity
number Capacity
CT = 27.5 CT = 30 * Bottleneck per hour
CT in
seconds
(a) Present and (b) Proposed process flow diagrams
THE WORK ALLOCATION PROBLEM IN THE
FLOW PROCESS
In 1-5
22
165

In 1-5
22
165

In 1-5
22
Reengineered driver’s license office 165 6 Out
120
30
In 1-5
22
165

In 1-5
22
165

In 1-5
22
165
 THE WORK ALLOCATION PROBLEM IN THE
FLOW PROCESS

Activity 3

Activity 4

Activity 5

Activity 6

Gantt chart of license renewal process

 THE WORK ALLOCATION PROBLEM IN THE
FLOW PROCESS

Activity 2

Activity 5

Activity 6

Gantt chart of proposed license renewal process

THANKS!
Any questions?
You can find me at:
▪ viennk@due.udn.vn

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