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Process and Capacity Management

The document discusses processes and capacity management for service organizations. It identifies key components of creating a service blueprint, including defining frontstage and backstage activities, lines of interaction and visibility, and support processes. It also discusses setting service standards, analyzing demand patterns, managing capacity fluctuations, and using reservation systems to control demand and maximize yield. The goals are to identify failure points, set standards, optimize capacity utilization, and improve the customer experience of waiting.

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Ambuj Sinha
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43 views13 pages

Process and Capacity Management

The document discusses processes and capacity management for service organizations. It identifies key components of creating a service blueprint, including defining frontstage and backstage activities, lines of interaction and visibility, and support processes. It also discusses setting service standards, analyzing demand patterns, managing capacity fluctuations, and using reservation systems to control demand and maximize yield. The goals are to identify failure points, set standards, optimize capacity utilization, and improve the customer experience of waiting.

Uploaded by

Ambuj Sinha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Process and Capacity

Management
Flowcharts for People and
Possession Processing Services
Flowcharts for Mental Stimulus and
Information Processing Services
Key Components of a
Service Blueprint
Objectives:

Identify fail
points & risks
of excessive
waits

Set service
standards

Fail-proof
process
Define standards
for frontstage
activities
Specify physical
evidence
Identify principal
customer actions
Line of
interaction
Frontstage
actions by
frontline
personnel
Line of visibility
Backstage
actions by
customer contact
personnel
Support
processes
involving other
personnel
Support
processes
involving IT
Process elements
Setting service standards and targets
Service Process Redesign
Non value adding
Self service and direct service
Bundling and outsourcing
Customers as Co-producers
Level of participation
Service failures
Partial employees
Self service technologies (SST)

Capacity Management
Fluctuations in demand
Productive capacity
Managing capacity
Analyze patterns of demand
Managing demand
Inventory demand through queuing
Customer perception of waiting
Reservation systems
Variations in Demand
Relative to Capacity
VOLUME DEMANDED
TIME CYCLE 1 TIME CYCLE 2
Maximum Available
Capacity
Optimum Capacity
(Demand Supply)
Low Utilization
(may send bad signals)
Demand > Capacity
(business is lost)
Demand >
optimum capacity
(quality declines)
Excess capacity
(wasted resources)
CAPACITY
UTILIZED
Managing Capacity
Stretched or shrunk- longer periods,
personnel stretched, slack time
Chasing DD- schedule downtime,
cross training, PT, SST, share unit,
flexibility, rent extra


DD Analysis
Segment patterns
No action
Adjust using 4 Ps
Inventory using queuing and
reservation
Queue- Tele, virtual, physical
Wait list- party size, VIP, Call ahead
Urgency, Duration and nature,
Premium, Loyalty
Managing Waiting Lines
Ten Propositions on Psychology of
Waiting Lines
Sources: Maister; Davis & Heineke; Jones
& Peppiatt
Feels longer than
Unoccupied time Occupied time
Solo waits Group waits
Physically uncomfortable waits Comfortable waits
Pre- and post-process waits In-process waits
Unexplained waits Explained waits
Unfamiliar waits Known, finite waits
Unfair waits Fair waits
Anxious waits Calm waits
Monotonous waits Valued waits
Reservation Systems
Satisfaction
Control DD
Operational and Financial projections
% of capacity sold
Yield- average revenue received per unit
of capacity
Yield analysis as opportunity costs
Creative use of excess capacity-
differentiation, reward loyal, customer
and channel development, barter

Setting Hotel Room Sales Targets
by Segment and Time Period
Out of commission for renovation
Loyalty Program
Members
Transient guests
Weekend
package
Groups and conventions
Airline contracts
100%
50%
Week 7
(Low Season)


M Nights: Tu Time W Th F S Su
Loyalty Program Members
Transient guests
W/E
package
Groups (no conventions)
Airline contracts
Week 36
(High Season)
M Tu W Th F S Su
Capacity
(% rooms)

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