10.1 Introduction
Imagine a scenario where business operations resemble a well-conducted symphony. In such service facilities, customers adhere to their appointments, receive satisfying services, and leave pleased. Here, the staff remains actively engaged, seemingly content in their customer interactions. On the other end of the spectrum, some establishments mimic a discordant tune. Prolonged customer wait times, dissatisfaction with services, and disengaged employees paint a starkly different picture. This contrast is not exclusive to service industries; manufacturing sectors exhibit similar variances.
The root cause of these divergent experiences often lies in the process design of the service or manufacturing facilities. Effective process design necessitates a thorough consideration of several factors: the volume of customers, their arrival patterns, the variety of products offered, and more. The reason for this careful planning is clear and significant. The way a process is designed can directly influence the revenue, costs, and overall viability of a business. A well-designed process optimizes resource utilization and customer satisfaction, directly impacting the bottom line, while a poorly designed process can lead to inefficiencies, increased costs, and lost customers.
Understanding Process Design Through a Call Center Example
Consider the simple process of a call center, where the initial task involves matching the number of employees with the number of incoming calls. If there are too few employees, customers may face excessive waiting times, leading to poor customer satisfaction and possibly a loss of future business. On the other hand, if there are too many employees, the cost of operating the call center would be too high, thus negatively impacting the profit of the firm. This shows that designing the call center processes is extremely important.
However, this presents a very simplified picture. Since call volume can vary significantly throughout the day or week, setting up the number of employees and their shift times becomes a complex task. Moreover, customers could call for a variety of reasons, necessitating the need to plan for employees with different skills and expertise levels. Here, this is mostly a one-step process where customers call a call center executive, have their query resolved, and leave. Yet, most business processes are multi-step, involving several stages before reaching completion.
For example, in a manufacturing setting, a product might go through stages such as raw material procurement, processing, assembly, quality checking, and finally packaging. Each of these steps is interconnected, and inefficiencies in one stage can ripple through the entire process, impacting overall performance and customer satisfaction. Similarly, in service industries, a customer’s experience might involve multiple touchpoints with different departments or personnel, each needing to be carefully designed and managed to ensure a seamless and satisfying end-to-end experience.
Through these examples, it’s clear that effective process design is crucial for achieving operational excellence, whether in a simple setup like a call center or in more complex multi-step processes. By understanding and optimizing each step and interaction within a process, businesses can enhance efficiency, reduce costs, and improve customer satisfaction, ultimately contributing to their success.
In this chapter, we aim to unravel the intricacies of process design in supply chain management. We will investigate how variations in product volume and diversity affect process design, scrutinize product delivery strategies, and introduce fundamental calculations for flow rate and capacity. Our objective is to provide students with a solid foundation in process design principles. Armed with this knowledge, they will be able to identify inefficiencies and areas for improvement in existing processes, thereby enhancing their effectiveness and contributing to the success of the business.
