Category Archives: Waiting Line Management

Operation Management In Practice

TIME IS MONEY AT DISNEY'S THEME PARKS

Everyone goes 0 Disney theme parks, p-everyone has to wait in lines. (Vlei. almost everyone.) And most people hate to wait in these lines.  Now some people have ways to avoid these lines.Disney's policy is that everyone is a VIP, but the reality is  that some are more VIP than others.For an additional cost of $50-$60 per ticket, you can buy a theme park VIP tour. This will get you sp social privileges such as viewing shows from preferred seating to a personal escort on and off certain attractions. This service  isn't very widely known, and you almost have "to jump through hoops to obtain it. Another way to avoid waiting lines is to be a celebrity or top business executive. Disney reasons that the top executive or celebrity is an attraction in and of itself, and ,.tries to let that celebrity enjoy his or her stay at the park as well as retaining a modicum of anonymity. Another way to get this so-called star treatment is to work for a company that sponsors the ride. It just takes a little savvy, like having a business card from your organization, knowing how to ask the right people with the right words, and you're there! Other rides (that your company may not be affiliated with) are available simply by networking. Ye~another way of avoiding these waiting lines is to spend big bucks at the hotel. Just put down an extra $300 a night for a stay on one of the special concierqe floors and your concierge may even jump through hoops to accommodate your wishes a,nd give you special passes. The best way to endpre a theme park, unless you're exceptionally rich or a very special person? Grin and bear it, and wait in line. Who knows? You might even meet anew friend.In providing fast service. however, the real goal of service managers should not be to  ensure that customer are served within a specified time (e.g., a stated number of minutes),hut rather to ensure that customers are sufficiently satisfied with the level of service provided so that they will want to return in the future.

Customer Waiting Time versus Process Efficiency: The Trade-Off in Waiting Line Management

The classical operations management model relating service and cost. illustrated in Exhibit 11.2. shows the trade-off between the cost of providing fast service and the cost of having the customer wait. This trade-off between providing high levels of customer service (i.e .service) and obtaining high worker productivity results from the direct interaction of the customer with the service-producing process. Although easily understood in theory,  this model is not easily applied to real-world situations, due primarily to the difficulty associated with measuring the cost of having a customer wait, particularly when we are dealing with external customers (that is, customers who buy the goods and services offered hy the firm). With internal customers (that is, workers within the company that require a particular service). such a. a truck driver waiting for an order to deliver or a worker waiting in line to use a copy machine. the cost of waiting is much easier to measure. In these cases, the cost of waiting i. the time lost by the worker while waiting in line multiplied by that worker's hourly  age. (Several examples of waiting-rime COSh relative to internal customer" are presented in the supplement to this chapter.) In compare ng a service operation with a manufacturing firm. customers waIling for service are often  ed as being analogous to inventory in a manufacturing process. Thus. a service firm that increases it prices efficiency by having - for service parallels a manufacturing firm that increases its process off-inch by maintaining a work-in-process

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inventory. In both instances. management faces a trade-off between improving process efficiency and increasing waiting time or inventory. The difference between the two. however. is that in the manufacturing facility, the parts that are waiting are inanimate objects. whereas in the service operation they are actual people in the form of customers. An inherent assumption in the model presented in Exhibit 11.2 is that the contact workers or available service capacity remain idle when there are no customers to serve. The basis for this assumption lies in queuing theory (which is discussed in detail in the supplement to this chapter). which establish the mathematical relationship between the number of servers or station" assigned and the average customer waiting time for a given level  of demand. With this traditional approach to waiting line management, there exists an "optimal"waiting time. T.,. that minimizes the sum of the two cost components: the cost of having a customer wait and the cost of providing service. However, as presented later in this chapter, there are a variety of ways that service managers can reduce customer waiting times without increasing costs.

The Importance of Good Service

The Importance of Good Service

As stated previously in Chapter 2, those companies in both manufacturing and service operations that provide outstanding service-to their customers can achieve a competitive advantage in the marketplace in todays highly competitive environment. And good service begins when the customer first comes in contact with an organization and waits in some  type of line or queue prior to being served. There are many factors that contribute to good  service, such as the friendliness and knowledge of workers, but customers' experiences with waiting lines, which are often their initial encounter with a firm, can significantly affect their overall level of satisfaction with the   organization. Providing ever-faster service, with the ultimate goal of having zero customer waiting me, has race toy received managerial attention for several reasons. First. in the more highly developed countries, where standards of living-are rising, time becomes more valuable  as a commodity and, consequently. customers are less willing to wait for service. As a result, customers in many cases are willing to py a premium price to those firms that mini- . maze their waiti  g time. (See OM in Practice box on Disney's Theme Parks.)Another reason for this increased emphasis on providing fast and efficient service is the realization by organizations that how they treat their customers today significantly impacts on whether or not they will remain loyal customers tomorrow. This differs from the past, when the treatment of customers in the present was viewed to be independent of any potential future sales. This antiquated perspective has persisted because the impact of future customer behavior does not appear anywhere on the firm's financial statements. Finally, advances in technology. especially i~ information technology, have provided   firms with the ability to provide faster service than was previously possible. Fax machines,computers,  air. and satellite communications provide firms with this new capability to respond faster to the customer.

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Managerial Issue

Managerial Issue

Customer waiting lines are a fact of life that every service manager must address. Even with manufacturing companies, as technoloqy in the form of the Internet brings customer  closer to the factory, customer waiting issues take on increasing importance with respect t'( product .delivery  and subsequent customer service support. Dell computer provides a good example of this. Waiting lines occur whencustomer  interact directly with a process. Waiting linescan take various forms: from waiting in line to be seated at" a restaurant, to waiting in the checkout line at the supermarket, to waiting on the telephone to request service for a product that you purchased. Waiting also can take place on the Internet, whether it is to conduct a stock transaction, or to get your checking account balance from your . bank, or to buy a book at Amazon.com.

Virtually every day we spend much of our time waiting in lines of one form or another. On our way to work in the morning, we wait in line to pay the toll on the turnpike and wait in line to park our car. If we take public transportation, we wait  for the bus or the train. We wait for our coffee at our favorite morning eatery, we wait forthe elevator to take us up to our office-and all of this happens before we even start work! As seen in Exhibit 11.1, we spend a good deal of our time II airing in lines. Managers. need to properly manage these waiting times to ensure not only that their  operations are efficient, but also that their customers are not so negatively affected by thewait that they take their future business elsewhere. To accomplish this. managers need to recognize that good waiting line management consists of two major components: the actual waiting time itself and the customer's perceived waiting time, The determination of actual waiting times is presented in the supplement to thi-, chapter. which focuses on queuing theory and mathematical waiting line models for a of service deliver) system configurations. Improving the level of customer satisfaction by managing the customer's perceix ed  aiting time is the primary focus of this chapter. Understanding how customer sati-faction can be increased for a given waiting time provides service managers with an opportunity for managing their operations more effectively.

Waiting Line Management

Waiting Line Management

You drive your car into the Hertz rental lot at the West Palm Beach, Florida, airport. As you begin to remove your luggage from the car, a service attendant greets you and asks for a copy of your rental car contract. The attendant quickly enters the contract number into a -and-held terminal,.which prints a receipt before you have removed all of your luggage. Without fur.h.er ado, you board the Hertz bus that takes you to your airline terminal. At the Marriott Hote  in Newton, Massachusetts,  guests who have preregistered can go directly to a self-service key rack to pick up their room keys and then can proceed directly to their rooms without the aggravation of waiting in line at the check-in desk. Guests who want to avoid the hassle of waiting in line to check out at Bally's Hotel in Las Vegas can take advan age of  the express check-out feature available on the television in each room. A guest simply follows menu-driven options on the television screen. The final bills then totaled and charged to the proper credit card. The guest simply deposits the room key in a box on the way out. These examples illustrate a growing trend among companies in general, and service firms in particular, to provide continually faster service, and in some cases, as noted above, even totally eliminating customer waiting time.

Waiting Line Management

Waiting Line Management

Chapter Objectives

• Emphasize the importance of providing fast service as a competitive advantage to companies.
• Show the relationship between customer expectations, customer perceptions, and customer satisfaction as they       pertain to waiting time.
• Identify the various factors that can affect customer satisfaction with waiting time and provide a framework for showing managers  which of these factors are under their control.
• Demonstrate how service managers can design their operations and train their employees to provide faster service without incurring any additional costs.
• Illustrate how technology can assist companies in providing fas er service to their customers