1. Type author names here © Oxford University Press, 2012. All rights reserved. Operations Management Chapter 8 Customer and Queuing Management Jones & Robinson

2. Jones & Robinson: Operations Management Explain the concept of the ‘service encounter’ and how it should be managed Explain the principles of queuing theory and the psychology of waiting lines Identify the reasons for service failure and explain alternative approaches to service recovery Explain the concept of ‘prosumption’ and the different roles that customer may play in service operations Learning Objectives

3. Jones & Robinson: Operations Management Service Encounter - the interaction between the customer and the service provider In CPOs this interaction can be challenging In most CPOs employees will routinely come into contact with many customers (unlike in MPOs where it is mainly sales-related staff). Service Encounter

4. Jones & Robinson: Operations Management According to Czepiel et al. (1985) there are seven key characteristics of a service encounter Specific roles for service employee and customer Both parties seeking something from the event Mostly task oriented – defined by the process itself Undertaken as part of work activities Primarily a ‘stranger’ relationship where customers and employees have not met before Narrow in scope - only surface topics of conversation Follow a predefined set of rules to facilitate the interaction (employees may even follow a script) Service Encounter

5. Jones & Robinson: Operations Management The success of the service encounter will be influenced by: Staff attitude Recruitment and selection of suitable employees Appropriate induction and training of employees Empowering front-line workers Systems for optimizing the service encounter Monitoring service encounter performance Communication effectiveness Control and efficiency of the service encounter Service Encounter

6. Jones & Robinson: Operations Management A queue is a situation in which the customer is passively engaged with the process, waiting for action to be taken in some way. A queuing system is the organization of customers for processing through the service encounter. Queuing

7. Jones & Robinson: Operations Management Key characteristics of a queuing system: Population of customers Arrival pattern Queue i.e. the number of customers waiting in line System capacity Queuing discipline – see next slide Service transaction Output i.e. how customers leave the system Queuing Systems

8. Jones & Robinson: Operations Management The Queuing discipline refers to how the queue is managed – a number of alternatives: FIFO (first in, first out) or FCFS (first come, first serve) LIFO (last in, first out) SPF (shortest processed first) SIRO (serve in random order) Queuing Discipline

9. Jones & Robinson: Operations Management Alternative queuing systems: Single line queue – e.g. banks, post offices. Customers perceive this system to be fair Multiple channels - e.g. fast food, supermarkets Diffuse queue - e.g. ‘take a ticket’ systems in a supermarket delicatessen counter Priority queue - e.g. airports may have ‘fast track’ channels for first class or business passengers Queuing Systems

10. Jones & Robinson: Operations Management Queuing Behaviours

11. Jones & Robinson: Operations Management Maister (1985) put forward eight ‘propositions’ for the psychology of waiting in lines: Unoccupied time feels longer than occupied time Pre-processed waits feel longer than in-process waits Anxiety makes waiting feel longer Uncertain waits feel longer than certain waits Unexplained waits seem longer than explained waits Unfair waits seem longer than equitable waits The more valuable the service, the longer people will wait Solo waiting feels longer than group waiting. Psychology of Waiting Lines

12. Jones & Robinson: Operations Management In addition Uncomfortable waits feel longer than comfortable waits According to Jones and Peppiatt (1996) New and infrequent users feel they wait longer than frequent users. Other variables may also affect customer perception Length of queue Type of queue Rate of movement of queue Psychology of Waiting Lines

13. Jones & Robinson: Operations Management Service Failure is any deviation in the service delivery from the specified service Due to the inherent variability of services, service failure is almost inevitable. Probability of service failure is increased by: –New employees –Technological breakdown –First time customers Service Failure and Recovery

14. Jones & Robinson: Operations Management Service Recovery is the action taken in response to a service failure with the aim of restoring customer confidence and satisfaction. Recovering a failed service can take several forms: –Provision of an apology –Rectifying the original service breakdown –Providing an explanation for the service failure –Providing compensation in some form Service Failure and Recovery

15. Jones & Robinson: Operations Management Prosumption is a term originally used by Toffler (1980) to describe a situation whereby the customer is part of the process and therefore involved in both co-creating and co- producing the service experience. Sampson and Froehle (2006) suggest three types of customer input Tangible belongings – e.g. motor car repair Customer-provided information – e.g. ordering a take away meal Customer-self - e.g. self-service at a supermarket checkout Prosumption