vrije Universiteit Amsterdam On the 2005 Markov lecture by Avi Mandelbaum: Building a theory for managing capacity in the service sector Ger Koole, VU Amsterdam

vrije Universiteit Amsterdam Services Characteristic: customer part of the process Examples: hospitals, finance, leisure industry Other activities such as manufacturing become service-oriented Examples: Customized car or computer, focus on after sales Focus on matching demand and supply, service level vs. costs

vrije Universiteit Amsterdam Management of services Generic study of services: service engineering Ex. common aspect of services: unpredictable arrival processes, customer abandonments Dominant role of managing service capacity and thus queueing: queueing science (term introduced by Avi) More than queueing theory: also statistics, behavioral sciences, etc.

vrije Universiteit Amsterdam Call centers Call centers are a typical product of modern service economies: –Personalized (by definition) –Efficient “Mass customization”

vrije Universiteit Amsterdam Service engineering Systematic study of call centers –Data analysis –Human behavior –Queueing models (“Erlang A”) Undertaken by Avi’s Technion group with many distinguished co-authors

vrije Universiteit Amsterdam Square root staffing Erlang C/A is a black box Square-root staffing quantifies economies of scale Halfin-Whitt for M/M/s Avi and co-authors applied this to many other systems

vrije Universiteit Amsterdam Current developments Shared service centers SLAs for internal services Outsourcing/offshoring Increasing use of “new” channels ( , etc) Increasing complexity through multiple skills

vrije Universiteit Amsterdam Research challenges Routing of calls of different types/channels Scheduling of agents in multi-skill/channel environment Dealing with uncertainties (for example, in arrival parameters) Very relevant to practice!