Category Archives: Waiting Line Management

How Technology Can Provide Faster Service

How Technology Can Provide Faster Service

As shown in the beginning of this chapter, the appropriate use of technology can reduce and. in many cases, totally eliminate customer waiting time. Automated teller machines (A'I'Ms)  now provide bank customers with 7 x 24-hour service. eliminating th need for customers to wait until the bank opens in the morning. Customers with personal computers can access their accounts via the Internet at any time, day or night. and request certain transactions to take place. (See OM in  Practice box on ATMs.)Bar-code scanners at checkout counters in department store and supermarkets reduce  service processing times and also customer waiting times. Similar types of scanners are now being used on toll roads where commuters can obtain a "bar code" for their cars that is then electronically scanned each time the car passes a toll booth. On the i\1assachusetts Turnpike. for example. a toll booth in the Fast Lane. which uses bar-coded technology, has more than twice the capacity as a regular toll booth  with a person collecting the money. (The Fast Lane toll bo th processes more than 1.000 cars an hour versus .f50 cars an hour for the regular: II booth.) (Currently under Dev elopement for use in -supermarkets are scanners that ill be able to scan an entire shopping C:.lI  ing to unload it.) Bar-code scanners are similarly used at many airports to -can tickets as passengers  board airplanes. This permits passengers to board more quickly and with less waiting time.At the same time, it provides the airline with a list of those passengers-,  ho art! onboard. In. providing faster service, however, managers should not lose sight of the fact that it is the customer's perception of the wait that is critical. rather than the actual wait itself. There  are many factors that can affect customer perceptions of waits, and the service manager needs to know what these factors are and which of them can be effectively managed by the firm. Sun  an approach will provide a proper framework for the allocation of a firm's scarce resources to ensure both faster and more efficient service.

KeyTerms actual waiting time p. 446 back-of-the-house p. 456 '. customer satisfaction p.450 customer's expectationsp.450 disconfirmation p. 451 front-of-the-house p. 456 perceived waiting time p.446

Review and  DiscussionQuestions
1. Explain the analogy between having inventory in a manufacturing company and having customers waiting in line in a service operation.
2. What are some of the factors that you think might affect your degree of satisfaction with waiting in line in a supermarket checkout line late at night? ... in a bank during. your lunch hour? ... at a fast-food restaurant with young children (not necessarily your ownl)?
3. Calculate the opportunity cost associated with a dissatisfied customer who stops frequenting a fast-food restaurant for a year. What are your assumptions?
4. Why is it important for a service manager to be able to distinguish between the different types of factors that can affect a customer's level of satisfaction with his or her wait? •
5. From your own personal experiences, cite some actual examples of both good and bad waiting line management practices.
6. For each of the different types of service operations listed below, provide specific recommendations for improving both the efficiency of the operation and the customer'level of satisfaction with the waiting time.• Airline check-in counter
• Hospital emergency room• Department of Motor Vehicles
• Mail-order 800 number
• Emergency hotline
• Upscale restaurant

Bibliograph Bearden, W.O., and J. E. Teele. "Selected Determinants of Consumer Satisfaction and Complaint Reports,"
Journal of Marketing Research 20 (February 1983).
Chase, Richard B. "The Ten Commandments of Service System Management." interface 15, no. 3 (May-June 1985).
Churchill. G. A. Jr .. and C. Surprenant. "Investigation into the  of Marketing Research 19 (November 1982). Davis, Mark M., and Janelle Heineke. "How Disconfirmation. Perception and Actual Waiting Times Impact Customer Satisfaction." International Journal of Service Industry Management 9, no. I. 1998, pp. 64-73"Understanding the Roles of the Customer and the Operation for Better Queue Management." International Journal of Operations and Production J!a!l(I~emen! 14. no. 5 19(4), pp. 21-34.

MBNA IS TRULY A SPEED FREAK

MBNA IS TRULY A SPEED FREAK

MBNA, the Wilmington, Delaware, credit card company, has developed a very loyal customer base due, in large part, to its ability to provide outstanding service. To accomplish  this, MBNA has developed 15 different measures of performance, many of which pertain directly to speed. Fo  example, customer address changes must be processed
within one day; telephones must be answered' within two rings; switchboard calls must be transferred to the appropriate  individual within 21' seconds. State-of-the-art technology allows MBNA to monitor performance on a continuous basis. At any given moment it is possible to.:Ob  train a performance measurement that shows, for example, that employees are achieving "two-ring pick-up" 99.7 per nt of the time, as shown in the picture. Tile current standard for the minimum level of service that is acceptable for each of the 15 performance measures IS 98.5 percent, which was increased r.ecently from 98.0 percent and is significant  lyup from 10 years ago when it was ~O percent. Source: J. Martin and J. E. Davis, "Are You as Good as You Think?" Fortune, September 30, 1996. © 1996 Time, Inc. All rights reserved.

The key to successfully adopting these concepts is that there are sufficient.nontimedependent functions available to be accomplished during the idle periods. This can be arranged. to a large extent. by carefully designing the service delivery system from the beginning.

Cross- Training of Employees An integral part of providing a fat and efficient service operation is the flexibility of the service workers, in terms of their ability to perform a variety of tasks. With broader job skit.heavy workers can perform additional. Nontomer-related tasks during idle periods as they occur throughout the workday. Consequently. service managers should invest resources III cross-train workers so they can perform. several tasks. What is essentially being accomplished through cross-training is that the firm is inventorying worker skills, instead of inventorying customers in the form of waiting line; in the long run, this is more profitable LO the term.

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Towards Faster and More Efficient Services

As the standard of living improves, time becomes more important to individuals. As a consequence, the cost of having customers wait for service increases significantly. This is shown in Exhibit 11.4 as the cost-of-waiting line shifts from WI to W2. At the same time. service managers who properly design their delivery systems and train their employees can dramatically  reduce the cost of providing service without making customers wait longer. This  is shownin Exhibit 11.4 in the shift of the cost-of-service line from 51 to 5c' The result of these t o trends is that there is now a new "optimal" waiting time, T;. that minimizes total cost and, at the same time, is lower than the initial To' As these trends continue in the future. the "optimal" waiting time will become shorter and shorter.

A Focus on Providing Fast Service

A Focus on Providing Fast Service

As the OM in Practice box about MBNA clearly illustrates, leading-edge companies now focus on providing ever-better and ever-faster service to their customers. From an operations perspective. this can be accomplished in several ways, all of which center around good system design concepts.

Service System Design Concepts

Early service system design theory advocated the splitting of the delivery system into two cores. with the goal of reducing customer contact time, thereby increasing the speed of delivery and the efficiency of the operation, With this approach, the first core, or front-of the- house, interacts directly with the customer and consequently adopts a chase strategy, The second core. or back-of-the-house, includes all of those functions that can be accomplished without the presence of the customer. and therefore can be performed more efficiently  with a level-type strategy, (Both chase and level strategies are explained in detail in Chapter 15 on "Aggregate Planning," Simply stated, a chase strategy is one in which the production in a given time period, be it a week or a month, exactly matches or "cases" the demand, This is the case with services where the delivery of the service must coincide with the customer's demand for that· service. A level strategy, on the other hand. averages the demand over a spec fixed number of periods. say four weeks or six months, This average is then the amount that is produced in each time period, thereby "leveling production," regardless of what the actual demand is in any given period.) McDonald's provides an excellent example of this split core strategy. with packaged hamburgers in the bins acting as a buffer inventory between the two stages,  However, by adopting a properly designed concept that combines the back-of-the-house operations with those in the front-of-the-house. service workers can be kept productively occupied during idle periods when there are no customers to wait on. With a well-designed facility. service workers can answer telephones or perform nontime-Dependent tasks during these idle periods.

Reduced Setup Times When the back-of-the-house and the front-of-the-house are integrated. benefits also can be accrued by reducing the setup times required when a worker has to switch from one job function to another. This switching can occur frequently in" service operation whenever a customer requires service. Such reduction", in setup times permit t e service manager to reassign workers from time-dependent tasks. such as waiting on customers. to nontime-dependent tasks. such as cleaning and paperwork, or restocking inventories. and vice versa. without incurring any additional costs.

Factors Affecting Customer Satisfaction with Waiting

Factors Affecting Customer Satisfaction with Waiting

satisfaction with waiting rather than the actual waiting time itself. Maister" presented an  iitial framework for focusing on customer satisfaction with waiting, identifying many of  the factors that can affect satisfaction. To further assist the service manager. these factors can be classified into three categories: (a) firm-related factors, (b) customer-related factors, and (c) both firm- and customer-related factors. Service managers, in order to effectively manage the customer's waiting time, must distinguish between those factors over which they have total or at least partial control from those over which they have no control at all.

Firm-Related Factors

Factors that fall primarily within the firm's control can be grouped into four types of waits: unfair versus fair waits, uncomfortable versus comfortable waits, unexplained versus explained waits, and initial versus subsequent waits.

Unfair versus Fair Waits The successful management of the customer's perception of fairness with respect to waiting is dependent on queue design. service system design, and contact hours. A popular approach, to ensure fairness, is to group all customers in o a single queue or line. When more than one server is available, the first person in line moves to the next server that is free. This method has been adopted by many bank and airline check-in counters. Not only is the combined queue perceived as fairer, but the average wait also has been shown toe considerably shorter, even though the line itself is longer. However. managers also need to take into consideration the physical elements of the operating system. For example, the physical space required by customers and their shopping carts has precluded most supermarkets from adopting the combined queue approach. More subtle elements of service system design, beyond the physical waiting. also can affect customer perceptions of fairness. Interruptions by telephone calls during busy periods.

Defining .Customer Satisfaction

Defining .Customer Satisfaction

The customers direct" involvement in the service delivery system suggests a need to integrate both marketing and operations perspectives into the service system's design and evaluation. A marketing-related measure of customer reaction to waiting time would more clearly indicate the true customer waiting costs instead of just the actual waiting time itself, Customer satisfaction appears to be the marketing measure that fulfills this need.

Definition of Customer Satisfaction

Drawing on work done in marketing; we define customer satisfaction as being directly related to the comparison between a customer's expectations of a service's performance and that customer's perception of that performance. In other words. if the perceived performance meets expectations. then the customer is satisfied: if it exceeds  expectations by a large amount, then the customer is highly satisfied or delighted: if the performance falls significantly short of expectations, then the customer is dissatisfied. In marketing terminology,  satisfaction is said to be directly related to the disconfirmation (i.e .. difference) between the customer's expected and perceived performance of the service. Customer satisfaction is a good measure of how effective the delivery system is. because
it appears to provide the ne   ssary linkage between the level of service that the company currently providing to a customer, the customer's perception of that service. and the customer's future behavior toward the firm. Oliver suggests that customer satisfaction is part of an overall model of customer behavior that develops over time. as

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Customer Expectations

Customer expectations are defined as the customers' preconceived notions of what level of  service they should receive from a particular service business or organization. Expectations can be derived from several sources. One source of expectations is advertising. Many restaurants. for example  promise in their advertising that your lunch will be served in 10 minutes or less. Thus. if you have to wait longer than 10 minutes. you will be dissatisfied; if your wait is much less than 10 minutes, you will be very satisfied. Expectations also can be predicated on the customer's prior  experience with the company. Additional-sources of expectations include word-of-mouth and previous experiences with similar types of operations. The. overall service delivery package also influences a customer's expectations with waiting time. People tend to associate little or no waiting with upscale or higher-priced services. These types of operations, therefore, often require appointments or reservations to ensure minimal, if any, waiting. The degree of customization provided to each customer is another factor that can influence expectations. The more a service is customized, the longer a customer might expect to wait.

Perceived Waiting Time

receiving service. While this is directly related to the actual time a customer waits. there  re often significant differences between the two. In fact, studies have shown that perceived waiting time has a greater impact in determining customer satisfaction than does actual waiting time.' As we will discuss later in this chapter, management can have an influence on a customer's perceived waiting time if it has an understanding of the factors that affect it. To illustrate the difference between per eve waiting time and actual waiting time, we look at the example of a newly designed hotel that was built with insufficient elevator .