for BUAD3020Class#8
PrinciplesofManufacturingandService
Systems
presentedby:
JohnA.Zarb
BUAD3020Class#8
Agenda Today:
-WSJ
-Housekeeping
-Chapter 4
-Questions
- Class 8 Assignments
Presentations
March
Group 1 Citigroup (Jones, Pugh, Schumacher, Xu)
Group 2
Group 3 Apple (Hentosz, Davydoz, Oney)
Group 4 Ford (Lindeman, Manley, Pezzano)
Presentations
April
Group 5 Dell (Abasery, Abdelsalam, ElAskary, Becka)
Group 6 Facebook (Devenport, Tippy, Deng, Li)
Group 7 Android (McBride, Clark, McCann, Mitchell)
Group 8
Group 9
Group 10
Group 11
Presentations
April
Group 12
Group 13
Group 14
Group 15
Group 16
Group 17
Group 18
Wall Street Journal....
What do you see in todays journal which
can enlighten us regarding TODAYs
events in I/T Planning and
OUTSOURCING?
Remember this is the way to get
additional participation credit
Stan Kirkwood
Stan Kirkwood is the Founder of Innovative Performance Management, LLC, a management consulting group focusing on
helping executives to achieve sustained, profitable growth for their organizations. Stan also consulted for six years with
another management group that operated under the banner of Business Design Concepts, LLC.
Prior to consulting Stan spent 20 years with La-Z-Boy Incorporated (NYSE Amex: LZB). La-Z-Boy manufactures, markets,
imports, distributes and retails upholstery and casegoods (wood) furniture products. Its products are sold under nine
different brands primarily throughout the US and Canada. La-Z-Boy, www.la-z-boy.com, is a publicly traded company with
sales of $1.187 BB with 7,910 employees. At its peak in 2004, LZB had 14 brands, sales of $2.2 BB and more than 23,000
employees.
Stan joined LZB in 1985 as a Senior Systems Analyst and quickly became an internal consultant for the CFO where he
spent his time determining the root causes of performance issues and then recommending and implementing solutions.
Most of those solutions revolved around redesigning processes, writing new systems to support those processes and then
implementing the solution. Stan spent years designing, writing and implementing manufacturing systems that greatly
impacted the competitiveness of LZB.
Due to the successes he had throughout the company, in 1997 Stan was asked to assume the role of Vice President and
Chief Information Officer for the $1.1 BB La-Z-Boy division. Stans largest challenge was getting the division Y2K compliant
and at one point had 417 active projects. In 2001 Stan was promoted to the newly created VP and Corporate CIO position
where he provided Information Technology, Process Management and Project Management services to the entire
corporation, all fourteen divisions. Stan held that position until 2004 when he left LZB to resume his consulting career.
Stan is a 1971 graduate of California University of Pennsylvania and holds an MBA from the University of North Carolina
Chapel Hill. Certifications in Business Process Reengineering, APICS and Project Management have all contributed to
Stans professional career. Together with his wife, Thea, they have three grown children, one grandson and many beautiful
gardens.
Michael J Barczewski
Michael Mike J Barczewski is the Global Operations and Contract Manger for all mainframe processing for
General Motors Corporation. General Motors (NYSE:GM, TSX: GMM), one of the worlds largest automakers,
traces its roots back to 1908. With its global headquarters in Detroit, GM employs 208,000 people in every major
region of the world and does business in more than 120 countries. GM and its strategic partners produce cars
and trucks in 30 countries, and sell and service these vehicles through the following brands: Baojun, Buick,
Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang, Opel, Vauxhall, and Wuling. The global Chevrolet
brand celebrates its 100th anniversary in 2011. GMs largest national market is China, followed by the United
States, Brazil, the United Kingdom, Germany, Canada, and Italy. GMs OnStar subsidiary is the industry leader in
vehicle safety, security and information services.
Mike started his career in 1984 as a computer operator at Childrens Hospital of Michigan. His career has
spanned many years with various companies and roles in the operations and applications development areas.
He continued his career after Childrens Hospital by advancing into analyst, project/program management and
eventually management roles. Mike has worked in areas like retail and telecommunications but found a home in
the automotive industry which drives Detroit today. His company portfolio includes Kmart Corporation, MCI
Worldcom, PerotSystems, Honeywell, Chrysler Corporation and General Motors Corporation.
Mike has extensive knowledge in manufacturing, financial, ERP and scheduling systems. The majority of his
time has been spent managing large scale global shop floor and manufacturing projects with Honeywell,
Chrysler and General Motors. He has managed manufacturing, financial and operations projects with Autoliv in
Sweden and Italy and has deployed various systems and managed projects for General Motors in China,
Thailand, Europe and Brazil and the United States.
In addition to his many travels, projects, speaking and various project management seminars, Mike takes time to
be with his family and also works a full NCAA DIV II/III basketball schedule as an official.
Mike is a 1996 graduate of Walsh College of Accounting and Tax. He holds a MS in Computer Science from the
University of Detroit/Mercy and a Masters of Management from Walsh College. Mike also is PMP Certified and
Annette S. Phillips, President and CEO, Mercy Memorial Hospital System
Annette S. Phillips joined Mercy Memorial Hospital System as President and CEO in 2008, coming from Henry Ford
Wyandotte Hospital where she served as Senior Vice President and Chief Operating Officer. In her previous roles
at Wyandotte Hospital, Phillips served as Chief Financial Officer, Administrator of Business Development and
Managed Care, and Controller. Phillips gained extensive experience as a certified public account from public
accounting firm Deloitte and Touche. She received her bachelors and masters degrees from Central Michigan
University.
As a highly effective healthcare administrator with a wide range of experience in operations, quality, customer
service and finance, Phillips lead a significant financial turnaround during a time of state-wide economic decline
and transformed the independent health care system to provide high quality, comprehensive services to the
residents of Monroe and surrounding communities.
Pat Sheehan, President, DMC Consulting Company
Pat has been a friend for many years. While at Libbey, I used the services of DMC quite a bit and Pat, at that time
was their Sales Manager. He later purchased the company and has led it for over 10 years.
Pat is VERY service oriented. He takes each opportunity as what is in it for the CUSTOMER first this is what
makes DMC somewhat purposely unique.
He keeps the company small with about 30 I/T professionals who serve about 100 different companies in
Ohio and Michigan. Services range from application development to network support, to web development to
business consulting.
Pat is good at everything he does EXCEPT in getting a photo and a BIO to me for inclusion in this slide.
Chapter 4
Service Processes
McGraw-Hill/Irwin
Copyright 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
videos
DHL Anthem 1.58 minutes
Be first in fashion with DHL Supply Chain
6 minutes
Discussion after video
Group in 3s
What are the key points made in this
video?
How do SERVICE companies make their
money given that they do NOT produce
products?
What are the TOP game winners for
SERVICE companies
Learning Objectives
Describe the characteristics of service
processes and how they differ from
manufacturing processes.
Classify service processes.
Explain service blueprinting.
Understand waiting line (queuing) analysis.
Model some common waiting line situation and
estimate server utilization, the length of a waiting
line, and average customer wait time.
Examples of Service Industries
Advertising - Entertainment
Financial Services (Banking, Investing)
Healthcare - Hospitality
Insurance
- Marketing
Public Serv - Real Estate
Tourism
- Travel - Transportation
Retail
- Public Service
Academia
An Operational Classification of
Services
Service organizations are classified
according to who is the customer and the
service they provide
Customer contact: the physical presence
of the customer in the system
Service systems with a high degree of
customer contact are more difficult to control
Creation of the service: the work process
involved in providing the service itself
Designing Service
Organizations
We cannot inventory services
In services capacity becomes the
dominant issue
Too much capacity leads to excessive costs
Insufficient capacity leads to lost customers
Waiting line models provide a powerful
mathematical tool for analyzing many
common service situations
Structuring the Service
Encounter: Service-System
Design Matrix
Characteristics Relative to the
Degree of Customer Contact
Virtual Service: The New Role
of the Customer
Pure virtual customer contact: where
companies enable customers to interact with
one another in an open environment
eBay
Second Life
Mixed virtual and actual customer contact:
where customers interact with one another in a
server-moderated environment such as product
discussion groups
YouTube
WikiPedia
Service Blueprinting and FailSafing
The standard tool for service process
design is the flowchart
Called a service blueprint
A unique feature of the service blueprint is
the distinction made between the high
customer contact aspects of the service
and those activities that the customer
does not see
Made with a line of visibility on the flowchart
Poka-Yokes
Poka-yokes: procedures that block the
inevitable mistake from becoming a service
defect
Poka-yokes are common in factories
Many applications of poka-yokes to services
Warning methods
Physical or visual contact methods
The Three Ts
1. Task to be done
2. Treatment accorded to the customer
3. Tangible features of the service facility
Fail-Safing an Automotive
Service Operation
Economics of the Waiting Line
Problem
A central problem in many service settings
is the management of waiting time
Reducing waiting time costs money
When people waiting are employees, it is
easy to value their time
When people waiting are customers, it is
more difficult to value their time
Lost sales is one (low) value
The Practical View of Waiting
Lines
More on Waiting Lines
One important variable is the number of arrivals
over the hours that the service system is open
Customers demand varying amounts of service,
often exceeding normal capacity
We can control arrivals
Short lines
Specific hours for specific customers
Specials
We can affect service time by using faster or
slower servers
Suggestions for Managing
Queues
Segment the customer
Train your servers to be friendly
Inform your customers of what to expect
Try to divert the customers attention when
waiting
Encourage customers to come during
slack periods
The Queuing System
1. Source population and the way
customers arrive at the system
2. The servicing system
3. The condition of the customers exiting
the system
Do they go back to source population or not?
Components of the Queuing
System Visually
Customers
Customers
come in
come
Customers are
Customers
served
served
Customers
Customers
leave
leave
Customer Arrivals
Finite population: limited-size customer
pool that will use the service and, at times,
form a line
When a customer leaves its position as a
member for the population, the size of the
user group is reduced by one
Infinite population: population large
enough so that the population size caused
by subtractions or additions to the
population does not significantly affect the
system probabilities
Distribution of Arrivals
Arrival rate: the number of units arriving
per period
Constant arrival distribution: periodic, with
exactly the same time between successive
arrivals
Variable (random) arrival distributions:
arrival probabilities described statistically
Exponential distribution
Poisson distribution
Distributions
Exponential distribution: when arrivals at a
service facility occur in a purely random
fashion
The probability function is
f(t) = e-t
Poisson distribution: where one is
interested in the number of arrivals during
some time period T
The probability Tfunction is
( ) e
P ( n) =
n
T
n!
T
Customer Arrivals in Queues
Other Arrival Characteristics
Arrival patterns
Size of arrival units
Degree of patience
Balking
Reneging
The Queuing System
Length
Infinite potential length
Limited line capacity
Number of lines
Queue discipline: a
priority rule or set of rules
for determining the order
of service to customers in
a waiting line
Service Time Distribution
Constant
Service is provided by automation
Variable
Service provided by humans
Described using exponential distribution
Line Structure
Exiting the Queuing System
Properties of Some Specific
Waiting Line Models
Infinite Queuing Notation
Equations for Solving Three
Model Problems
Model 1
Model 2
Model 3
Computer Simulation of Waiting
Lines
Some waiting line problems are very complex
Have assumed waiting lines are independent
When a services is becomes the input to the
next, we can no longer use the simple formulas
Also true for any problem where conditions do
not meet the requirements of the equations
Here, must use computer simulation
Chapter 4 Take-aways..
Service industries provide a growing % of
the USA economy
There are different needs which the
service industry requires from employees
Not all service industries are mature
many wont succeed
Customer service is key! But isnt it in
manufacturing too?