WEEK 09

The Supporting Facility

Creating the Right

Environment

Copyright 2008 by The McGraw-Hill Companies, Inc. All

McGraw-Hill/Irwin
Rights Reserved.
Service Management: Operations,
 LEARNING OBJECTIVES
After completing this chapter, you should
be able to:
1. Describe the critical design features of a service supporting facility.
2. Identify the bottleneck operation in a product layout, and regroup
activities to create new jobs that will increase the overall service
capacity.
3. Use operations sequence analysis to determine the relative
locations of departments in a process layout that minimize total flow-
distance.
4. Prepare a process flowchart for a service operation.
5. Recommend facility design features to remove the anxiety of
disorientation.
6. Conduct a walk-through-audit.
 Servicescapes
Designing Physical Surroundings to Affect
Employee and Customer Behavior
Ambient Conditions: background characteristics
such as noise level, music, lighting, temperature,
and scent.
Spatial Layout and Functionality: reception area,
circulation paths of employees and customers, and
focal points.
Signs, Symbols, and Artifacts: selection,
orientation, location, and size of objects.

9-3
 Approach
Affiliation
SERVICESCAPE FRAMEWORK Exploration
Stay longer
Commitment

Avoid
Ambient conditions (opposites of approach)
Temperature
Air quality Cognitive
Cognitive Employee
Noise Beliefs responses
Beliefs
Music Categorization
Categorization
Symbolic Social interactions between
Odor Symbolic meaning
meaning
And among customers
Space/function Emotional And employees
Emotional
Layout Perceived Mood
Mood
Equipment servicescape Attitude
Attitude
Furnishings
Physiological
Physiological Approach
Signs, symbols & artifacts Pain
Pain Attraction
Comfort Customer Stay/explore
Signage Comfort
Movement responses Spend money
Personal artifacts Movement
Style of decor Physical
Physical fit
fit Return

Avoid
(opposite of approach)
Environment Holistic Psychological Internal
Dimensions Environment moderators Responses Behavior
 Facility Design
Considerations
Nature and Objectives of Service
Organization
Land Availability and Space
Requirements
Flexibility
Security
Aesthetic Factors
The Community and Environment
9-5
 Types of Services
Processes
Process Type Service Characteristic Management Challenge
Example

Project Consulting One-of-a-kind engagement Staffing and scheduling

Job Shop Hospital Many specialized departments Balancing utilization and

scheduling patients

Batch Airline Group of customers treated Pricing of perishable

simultaneously asset (seat inventory)

Flow Cafeteria Fixed sequence of operations Adjust staffing to demand

fluctuations

Continuous Electric Utility Uninterrupted delivery Maintenance and capacity

planning

9-6
Environmental Orientation
Considerations
Need for spatial cues to orient visitors
Formula facilities draw on previous
experience
Entrance atrium allows visitors to
gain a quick orientation and observe
others for behavioral cues
Orientation aids and signage such as
You Are Here maps reduce anxiety

9-7
 Service Facility
Location

Copyright 2008 by The McGraw-Hill Companies, Inc. All

McGraw-Hill/Irwin
Rights Reserved.
Service Management: Operations,
Service Facility Location
Planning

Competitive positioning: prime location

can be barrier to entry.
Demand management: diverse set of
market generators.
Flexibility: plan for future economic
changes and portfolio effect.
Expansion strategy: contiguous, regional
followed by fill-in, or concentrated.

10-9
Strategic Considerations

Competitive Clustering (Among Competitors)

(e.g. Auto Dealers, Motels)
Saturation Marketing (Same Firm)
(e.g. An Bon Pain, Ice Cream Vendors)
Marketing Intermediaries
(e.g. Credit Cards, HMO)
Substitute Communication for Travel
(e.g. telecommuting, e-Commerce)
Separation of Front from Back Office
(e.g. ATM, shoe repair)
Impact of the Internet on Service Location
(e.g. Amazon.com, eBay, FedEx)
10-10
 Strategic Location
Considerations

Front Office Back Office

Is travel out to customer or Is service performed on
External customer travel to site? person or property?
Customer Can electronic media Is co-location
substitute for physical necessary?
(consumer)
travel? How is communication
Is location a barrier to accomplished?
entry?
Availability of labor? Are economies of scale
Internal Are self-service kiosks an possible?
Customer alternative? Can employees work
(employee) from home?
Is offshoring an option?

10-11
 Site Selection
Considerations
1. Access: 4. Parking:
Convenient to freeway exit and Adequate off-street
parking
entrance ramps 5. Expansion:
Served by public transportation Room for expansion
2. Visibility: 6. Environment:
Set back from street Immediate surroundings
Surrounding clutter should complement the
Sign placement service
3. Traffic: 7. Competition:
Traffic volume on street that may Location of competitors
Indicate potential impulse buying 8. Government:
Traffic congestion that could be a Zoning restrictions
hindrance (e.g.., fire stations) Taxes
10-12
 Regression Model for Motel
Location
Competitive Factors: Room rate, hotels within
one mile, competitive room rate
Demand Generators: College, Hospital beds
within one mile, Annual tourists
Area Demographics: Family income, residential
population
Market Awareness: State population per inn,
Distance to nearest inn
Physical Attributes: Sign visibility, Distance to
downtown, Accessibility

10-13