Title: Class 6
1Operations Management Performance Modeling
- 1 Operations Strategy
- 2 Process Analysis
- 3 Lean Operations
- 4 Supply Chain Management
- 5 Capacity Management in Services
- Class 6b Capacity Analysis and Queuing
- Class 7a Applications
- Specialization vs. Flexibility
- Analysis of service systems Sof-Optics
- 6 Total Quality Management
- 7 Business Process Reengineering
2Example 2 MBPF Calling Center limited buffer
size
- In reality only a limited number of people can be
put on hold (this depends on the phone system in
place) after which a caller receives busy signal.
Assume that at most 5 people can be put on hold.
Any caller receiving a busy signal simply calls
a competitor resulting in a loss of 100 in
revenue. - of servers c
- buffer size K
- What is the hourly loss because of callers not
being able to get through?
3Example 3 MBPF Calling Center Resource Pooling
- 2 phone numbers
- MBPF hires a second CSR who is assigned a new
telephone number. Customers are now free to call
either of the two numbers. Once they are put on
hold customers tend to stay on line since the
other may be worse.. - 1 phone number pooling
- both CSRs share the same telephone number and the
customers on hold are in a single queue
4Example 4 MBPF Calling Center Staffing
- Assume that the MBPF call center has a total of 6
lines. With all other data as in Example 2, what
is the optimal number of CSRs that MBPF should
staff the call center with?
5Process Structure Resource Capabilities Specia
lization Vs. Flexibility
- Aggregation
- single server averaging 10 minutes for service.
Poisson arrivals with a mean of 5/hr. - Specialization
- Service divided into two segments (one server at
each segment), each averaging 5 minutes - Flexibility
- Second server added, with each server performing
entire service
6Sof-Optics, Inc. Managing the operations of a
customer service department
7Capacity Management at Sof-Optics
8Call Centers
- In U.S. 10B, gt 70,000 centers, gt 3M people (gt3
of workforce) - Most cost-effective channel to serve customers
- Strategic Alignment
- accounting 90 are cost centers, 10 are revenue
centers - role 60 are viewed as cost, 40 as revenue
generators - staffing 60 are generalists, 40 specialists
- Trend more towards profit centers revenue
generators - Trade-off low cost (service) vs. high revenue
(sales)
Source O. Zeynep Aksin 1997
9Levers for Reducing Flow Time
- is to decrease the work content of (only ?)
critical activities, - and/or move it to non critical activities.
- Reduce waiting time
- reduce variability
- arrivals service requests
- synchronize flows within the process
- increase safety capacity
- lower utilization
- Pooling
- Match resource availability with flows in and out
of process
10E.g. Analysis of Service Systems
- Divide day into blocks based on arrival rates
- For each block evaluate performance measures
given current staffing - Quantify financial impact of each action
- Workforce training reduces mean and variability
of service time - Work flexibility from workforce pools available
capacity - Time flexibility from workforce better
synchronization - Retain experienced employees increased safety
capacity - Additional workforce Increases safety capacity
- Improved Scheduling better synchronization
- Incentives to affect arrival patterns better
synchronization - Decrease product variety reduces variability of
service time - Increase maximum queue capacity
- Consignment program, fax, e-mail etc.
S
D
11Framework for Process Flow Management
Flow Chart Process
Identify Bottlenecks Maximal Flow Rate
Identify Critical Path Minimal Flow Time
mean
Macro Average Performance
Process Re-Design
No
Competitive?
Demand Pattern
Yes
Micro Variability Performance
Demand Supply Mgt
No
Competitive?
variability
Continuous Improvement
Yes
12Class 7a Learning objectives
- Capacity Management under Uncertainty
(variability) - the merits of safety capacity
- Demand and Supply Management.
13Automatic Call Distributors
- A telephone call to a hospital in Southern
California triggered this recorded message
Thank you for calling. All our lines are busy
at the moment, your call will be answered in the
order in which it was received. Please have your
hospital membership card ready. If you wish to
schedule an eye appointment, call .... If you
wish to schedule a physical examination, call
.... If you wish to make an appointment with
the family practice department, call .... If
this is a life-threatening situation, call ...
Source Service America by Albretch and Zemke.