UNIT III STUDY GUIDE

Service

Course Learning Outcomes for Unit III

Upon completion of this unit, students should be able to:

1. Demonstrate how production processes are organized.

2. Explain the trade-offs that need to be considered when designing a production processes.
3. Describe the product-process matrix.
4. Recognize how break-even analysis is just as important in operations and supply chain management
as it is in other functional areas.
5. Recognize typical retail and office layout designs.
6. Construct a service blueprint.
7. Demonstrate how services are classified.
8. Explain the involvement of the customer in services.
9. Describe waiting line (queuing) analysis.
10. Explain how to estimate service utilization, the length of a waiting line, and average customer wait
time.

Reading Assignment
Chapter 6: Production Processes

Chapter 6A: Facility Layout

Chapter 7: Service Processes

Chapter 7A: Waiting Line Analysis

Unit Lesson
Chapter 6 introduces how processes need to be designed to match the volume and variety of characteristics
of the products that a company must produce. The product-process matrix is the major concept used in this
explanation. Break-even analysis is also covered in the chapter. In addition, a number of introductory
manufacturing process examples are explained.

A problem faced by every company is designing an effective layout. This is discussed in Chapter 6A. As
business requirements change, layouts are subsequently changed. This is true for manufacturing and
services alike. This chapter discusses layouts for new facilities and existing facilities for both service and
manufacturing companies. Product, process, group technology (GT), and fixed position layouts are common
manufacturing layouts. No particular type of layout is inherently good or bad, and layouts are often reflective
of the organizational makeup of individual firms. For services, the “servicescape” approach is explained. It is
good to reflect on the JIT tenet that unnecessary transportation is wasteful and should be avoided.

Chapter 7 stresses that the contemporary view of services is that the customer is the focal point of all actions
in a service organization. This means that all strategic and tactical decisions must be made with the customer
in mind. This view places the customer at the center of the services triangle including the service strategy, the
service systems, and the people providing the service. Service strategy begins by selecting an operations
focus, such as treatment of the customer, speed of delivery, price, variety, quality, or unique skills that
constitutes a services offering.

DBA 8475, Operations And Supply Chain Management 1

In the last chapter of this unit, Chapter 7A, the objectives are (1) to describe how to model waiting line
situations and (2) to demonstrate how the standard formulas for waiting line situations can be used to provide
information for staffing, location, and layout decisions. Since services are frequently waiting line situations,
waiting line discussion provides a good follow-up to design of service. Queuing structures, Poisson, and
exponential distributions are also covered. Simulation is presented as an alternative approach to studying
waiting line problems where the basic Poisson assumptions do not hold, or where problems involve multiple
phases.

DBA 8475, Operations And Supply Chain Management 2