Facilities with No Customer Contact
Services that have no direct interaction with the customer are often referred to as back-of-the-house operations. Because the customer is absent from the process, these services, in many respects, tend to resemble a manufacturing operation. Services with these characteristics can be further divided into two broad categories: (a) the processing (sometimes) and distribution of physical goods (as illustrated by a central commissary for a restaurant chain) and (b) the processing and distribution of information (as illustrated by a credit card billing operation). As in selecting a manufacturing site, the location of a physical distribution center needs to consider not only the facility's operating costs but also the distribution or delivery costs, with the goal of minimizing the combined costs of both. Wal-Mart's regional distribution centers provide a good example of this type of facility .
For example, the cost of long-distance telephone calls is the same throughout the United States, as is the cost of mail delivery. Thus, the site selection criteria for a check processing operation of a bank, or a customer billing operation for a retail chain or credit card company will focus primarily on minimizing facility operating expenses As with manufacturing operations, managers need to consider both qualitative and quantitative factors in evaluating potential sites. These factors will vary in both type and relative importance, depending on the type of service facility for which the location is being evaluated. From an operational perspective, these factors are the same as those factors used in evaluating a manufacturing site. This is especially true for of the house operations In addition, front-of-the-house operations'need to consider customer-related factors that can impact sales at a location. Depending on the service. some of these factors include (0) average family income, (b) average family size. (c) population density. and (d) pedestrian and or automobile traffic.