Forecasting Demand - Supermarkets and the Weather

Services can predict demand for services based on typical weather patterns. For example, the winter will usher in flu season and hospitals routinely prepare for a seasonal influx of patients seasonally.

With the development of huge amounts of more accurate weather data, there is the potential for better forecasting of demand.  

Weather Commerce provides targeted forecasts for British businesses so they can plan for specific weather conditions. For instance, if a very hot period is forecast for a particular area, then supermarkets can order appropriate products like water, suntan lotion and so on. Educated decisions can be made with historical data supplied by Weather Commerce with sales figures from the same period to plan stock and staff levels.

Weather services use the expertise of meteorologists to provide 'bespoke' forecasting services for a range of businesses which may be impacted upon by the weather. 

Experience Economy - Hospitals

Pine and Gilmore (1998) have popularised a key idea in service management; that we are now in an experience economy. Pine and Gilmore (1998) set out how theatrical and entertainment experiences are moving beyond and out of their traditional home in theme parks into restaurants (eater-tainment), retail (retail-tainment) and into all sorts of services one wouldn't expect to see entertainment (e.g. hospitals).

In the following diagram from their article, we can see that Pine and Gilmore see the development of the experience economy as being a part of an evolution in economies so that the experience economy is more advanced than service, industrial and primary economy.

The Progression of Economic Value - Pine and Gilmore (1998)

In the next diagram, we can see how relationships differ in each of the stages. For example, the consumer has moved from being called 'market', to 'Guest'.

Economic Distinctions from Pine and Gilmore (1998)

In the next diagram, we can see that experiences can be divided into four types. An example of an escapist experience could be an online gaming one. An example of an entertainment experience could be going to the movies or a concert.

The Four Realms of an Experience, from Pine and Gilmore (1998)

The following video from Ted Talks shows speaker Ted Lee talking about the relevance of Pine and Gilmore's work for the health sector, demonstrating its spread into other industries beyond Disney.

Story-boarding

Story-boarding is a technique service managers can use to make intangible processes tangible.
A storyboard can look like a comic book and provides one way to show to staff, managers and customers correct processes. Storyboards are also used to show typical faults in processes. Emotions can be shown in storyboards which makes them useful devices for focusing the attention of organizational members on resolving pain points in a process.

A storyboard can tell the story of a typical customer encountering a service. A customer journey is told as if it is a story, with all the 'moments of truth' or interaction points pictured.

One advantage of a storyboard is that it is relatively easy to imagine the various main steps that are involved in a process visually and represent them in a sequence as a story. A story-board communicates more effectively to many people than a process map (which can look very complicated!) and can communicate aspects of a process that are most important in service interaction.

Reference
An article on story-boarding is here - 'Storyboards: A dynamic storytelling tool' by Ron Silva and Deborah Hinderer Sova.

Maister on Psychology of Waiting

Maister’s classic research on waiting and queuing - ‘Ten principles of waiting' explains principles of waiting.

1. Unoccupied time feels longer than occupied time

“Boredom results from being attentive to the passage of time itself”

Restaurant solutions: giving out menus before being seated (added bonus of decreasing wait time); turn waiting area into a bar (adds revenue also); posters, reading material, toys, memorabilia.

Telephone solutions: muzak (can have opposite effects if unrelated to service activity); menus and bars integrates service into waiting experience; an example of a sports team playing last week’s game!

Other solutions: Windy lines; different queuing systems and movement; medical waiting rooms (take the person's mind off the service - e.g. at the dentist.)

2. Pre-process waits feel longer than in-process waits

A person’s anxiety level is higher waiting to be served than while being served. People have a fear of being forgotten. Make first contact human and early in the process.

Example - triage waiting system. Assessment by a nurse while waiting to see a doctor.

3. Anxiety makes the waits seem longer

People have a fear of being forgotten

The other line always moves faster or, worry that there will not be enough room on a plane.

4. Uncertain waits are longer than known, finite waits

Example: if a patient told the doctor is delayed 30 minutes, they will wait, but once that time is met, becomes increasingly annoyed.

An important point to note: appointment defines an expectation that must be met.

5. Unexplained waits are longer than explained waits

Any explanation is better than none

eg. plane `technical difficulties’

eg. the sight of a serving person taking a break is a source of irritation

6. Unfair waits are longer than equitable waits

e.g. the situation where someone is felt to be `cutting in front’

FIFO rule - first in, first out - exceptions: emergency cases, table size (frequently resented), express checkout lanes (accepted).

Need to be aware of patrons sense of equity, feelings about status

7. The more valuable the service, the longer the customer will wait

The supermarket example moderated by this point (value of full cart higher than the value of lower and so people will wait longer)

Waiting for something of little value is intolerable. Post-process waits arethe most intolerable (eg. willingness to queue before the flight but impatience at baggage handling)

8. Solo waits feel longer than group waits

Promotion of group waiting experiences is beneficial - queuing for music tickets, the camaraderie that develops on plane delay, getting to know someone in a queue at Disneyworld.

9. Uncomfortable waits feel longer than comfortable waits

Uncomfortable waits sensitize people to time and poor service

10. New or infrequent users feel they wait longer than frequent users

The implication is to know who they are and provide reassurance

Reference

Maister, D. H. (1985). The psychology of waiting lines. In CZEPIEL, J. A., SOLOMON, M. & SURPRENANT, C. (eds.) The service encounter: Managing employee/customer interaction in service businesses London: Lexington Books.

DIY (Do-It-Yourself) - Ikea

Do-It-Yourself (DIY) can be seen as part of the co-production of service value. For instance, Ikea delivers flatpacks and the customer is expected to put the furniture together. This fits with Ikea's purpose of providing 'inexpensive design'; they can save costs on storage, transport, and assembly.

However, once the kit-set pack has left the facility, the satisfaction of the customer with the product is entirely down to the customer's ability to read and follow instructions (and the integrity of the pack). The customer may not have the skills to assemble the furniture, or the instructions may be unclear, or they may be too complex to follow. Negative experiences can then lead to dissatisfaction and complaints.

There is really no point in blaming the customer for incompetence. This just aggravates people and makes them angrier. The service provider should minimize the risk of mistakes in the self-assemblage process through good instructional practice. The service provider needs to understand their service extends outside the immediate environs of their own organization (premises, staff, and suppliers) and encompasses the consumer as a partial-employee, or a co-producer, of the firm.      

One solution is to offer instructions on how to build kit-set furniture online. Ikea has a Youtube channel in the USA 'How to build', which does just this. 

Unfortunately, there are no dedicated Ikea stores in NZ yet, although I have bought Ikea online.  I did have trouble putting it together. The following video is a parody of Ikea kit-set instructions. The quality of the video is deliberately bad, and it is quite good at demonstrating the service culture issues (i.e. top-down arrogant communication style) that lies beneath poor instructions.

Ikea Instructional Parody Video from Youtube

Queue Discipline Techniques

Queue discipline techniques are the rules placed over the behaviour of a group that tells the queue components how to behave. These components can be people, attributes of people (e.g. how loyal they are; how sick they are), material things, or information. The figure below illustrates discipline techniques by dividing them into two types; static (FCFS) and dynamic. 

Queue Discipline techniques 

On the left, we have a static rule FCFS. This is the 'First come, first served' rule. In this rule, which many service providers abide by, and can be seen in many other systems as well (like hiring and redundancy practices), the organisation simply serves whoever arrives first, and in order of arrival. This is a static queue because the organisation does not actively intercede in queue formation properties. 

On the right side is dynamic queue discipline. Queue discipline techniques are considered dynamic when managers actively intercede in the way that the queue is formed. So, two dynamic options are given for action in the above diagram: selection based on individual customer attributes; and selection based on the status of the queue.  In the 'Selection based on on individual customer attributes' we have three main queue discipline techniques; priority (the highest priority served first - e.g. cutting in line, or VIP - see below), preemptive (status is assigned based on how long a task takes and how long a component is queued), and  SPT (or standard processing time).

Priority Queue Signage at an Airport

Queue Management (NZ Post)

NZ Post has challenging queue management issues because they deal with a wide variety of customer tasks (e.g. registering a car; a complex banking transaction; buying some stamps, etc..) that take different amounts of time. Many post offices use the preemptive system - e.g. they may have a bank customer only queue. Cashiers may intercede in the line to help train customers in how to skip the queue by using self-help facilities (like express deposit boxes for simple transactions).

Queue Types

There are three major types of physical queue configurations: multiple queues, single queue, and take-a-number queue.  Queue configuration tells us what a queue looks like.

Some basic queue configurations

A single queue system is sometimes called a snake queue. You often see these at airports.

A multiple queue system is often used in supermarkets and retail outlets.

This queue at the rugby sevens is a multiple queue.

Rugby Sevens queue at Westpac stadium in Wellington New Zealand

A 'take-a-number' queue is often seen at restaurants/bars, fast food places like Fish and Chip shops, and sometimes also at banks. A take-a-number type queue operates at 'Just Cuts', a franchised hairdressing salon. No appointments are taken, but your name is put into a 'line' on their computer (using the FCFS First-Come-First-Served rule) and they can tell you the approximate wait time so you can go off and do other things while you wait. Types of take-a-number technologies are improving and becoming more common. E.g. at busy one-stop-shop customer service centers.

Often a combination of queuing configurations can be seen. The above queue at the Rugby Sevens, although a multiple queue, is also like a snake queue.

Poka-yoke Devices - McDonald's

Poka-yoke is a Japanese term that means 'fail-safe' or 'mistake-proofing'. Originally called baka-yoke which means fool-proofing or idiot-proofing, the name was changed to a milder form of admonishment!  The point of a poka-yoke device is to provide a check-point to ensure a service can take place without hiccups. 

Imagine you are driving down a road. Down the middle of the road there are cats' eyes, slightly raised bumps that will make a noise and cause the car to judder, to give you a sudden reminder you have drifted into the wrong lane. On the outside of the road is the curb, which if you touch or hit will also remind you that you have strayed from the path you should be traveling. This is a type of Poka-yoke. Poka-yokes are everywhere once you start noticing them!

McDonald's

A Drive through Poka-yoke - Don't drive through the drive-through if your vehicle is over 2.7m high!

McDonald's uses the self-service principle and so they need to manage the behaviour of customers in their premises to keep them clean. Rubbish bins are placed near doors and in alleyways so that customers are reminded to place their rubbish in the receptacle when they leave. In McDonald's you are expected to clean your own table and so placement of rubbish bins here is a designed-in Poka-yoke device.   

Some more examples people have collected are here and also here.

More information about poka-yoke and its relationship to lean thinking management can be found here.

Poka-Yoke Devices - Hotels

Poka-yoke is a Japanese term that means 'fail-safe' or 'mistake-proofing'. Originally called baka-yoke which means fool-proofing or idiot-proofing, the name was changed to a milder form of admonishment!  The point of a poka-yoke device is to provide a check-point to ensure a service can take place without hiccups. Simple check-lists are examples, but there are also numerous devices you see every day but you may not realize they are an integral part of ensuring a service process runs smoothly.

Poka-yoke devices are devices built into a service process to minimize customer error.

Hotels are designed with the same principle in mind; minimize the likelihood of a user mistake through good design.  A patron is undergoing a journey through a hotel process. The journey the hotel offers is the same for everyone - basically a room for the night. In order for this process to be carried out with greatest efficiency and effectiveness, and because hotels' capital investment is mainly in the facility, the facility is designed to minimize the likelihood of anyone straying outside of the process. Ways patrons might stray outside the process include; stealing stuff, damaging stuff, losing stuff (like their keys), getting lost, hurting themselves (falling over in their room), wasting power or water, misusing the room (sneaking people in, cooking etc..) and so on (use your imagination!).     

On a recent business trip to Wellington, I stayed in an Ibis Hotel, and I photographed some simple Poka-yoke devices in my room in order to show how hotel design minimizes the likelihood of process errors. 

Some of the poka-yoke points include:

1. The hotel lifts will only operate if I use my room key card to enable the lift. This is a security measure to ensure non-patrons cannot enter into room areas easily, helping to prevent theft. The lifts are within the sightline of the front-desk meaning it is difficult to sneak stuff into your room that shouldn't be there (like extra people).  
2. When inside the room, you must place your key card into the slot shown below in order to enable power to the room including lights. This also means that when you leave the room and take your key card the lights to the room are turned off, meaning power is not wasted. It also means you are unlikely to forget your card. Your room will not lock unless the card is removed. 

3. You will notice that almost all hotel rooms have clothes hangers that detach leaving the hook behind. This is designed to stop patrons stealing clothes hangers.

4. Electrical appliances like irons and hair dryers are often wired into the wall. Again this stops them being stolen but also helps stop misuse (i.e. putting electrical appliances in water which is really dangerous).

5. Another simple design feature is to make all furnishings out of hard-wearing durable fabrics and materials, that are also easy to keep clean, and if a mark is made, not easy to see. So, for instance, carpets are often dark colors, in patterns and textures that minimize the appearance of wear and tear. 

  

Core and Supplementary Services

A core service is simply the fundamental service that the service is providing. A supplementary service is anything that could be considered an extra on top of that basic service. 

So for example, for a hotel, the core service would be providing a bed. The supplementary services are the services that add to that core experience. 

Supplementary services could include laundry services, business services, conference facilities, dining room, gymnasium, pool, mini-golf, vending machines, bar and so on. 

Defining what is core and supplementary can be difficult for many services as what might be considered supplementary comes to be considered core (e.g. McDonald's cafes were supplementary and are now a core part of their service). 

Services can also innovate around this idea by providing extra services or even stripping down service to its bare essentials. E.g. the Japanese capsule hotels - see below.