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Chapter 6
Service Quality and Service Capacity Planning
Introduction
Learning Objectives
Service Quality and CRM
Concept of Service Capacity
Service Capacity Planning Process
Using Queuing Theory for Service Capacity Planning
Analysis of a Queue System
Recap
Chapter 6: Service Quality and Service Capacity Planning
After going through this chapter, the students will be able to:
Understand Relationship between Service Quality and Customer Relationship Management
Explain the method of Service Capacity Planning
Understand Queuing Theory
Apply Queuing Theory for practical purposes
Learning Objectives
The prime objective of implementing CRM is to provide best services to the customers.
It has been observed that there is generally a mismatch between the objectives and the capacity of the organization to provide the service.
The organizations need to review their capacity to provide the service vis-à-vis the service quality parameters and standards that are intended to be achieved.
This unit will explain the methods to plan the capacity to deliver the targeted level of customer service.
Introduction
Sales, Marketing and Service are the three basic functionalities that are integrated within a CRM system.
Every organisation strives to satisfy customers by providing improving their products and trying to deliver best possible service.
The customers derive the satisfaction from realisation of value of the product and associated service. The quality of the product or service is most important factor for determining the value as perceived by the customer.
Service Quality and CRM
In fact, quality of service comes from number of factors like top management commitment, product design, employee focus, feedback mechanism and improvement plan, service delivery system and so on.
No CRM system will succeed without putting in place the sufficient capacity to deliver the Service.
Service Quality and CRM (Contd.)
Service Capacity is the maximum load that a service delivery utility can bear without adversely affecting the quality standard.
‘Service Capacity planning is a process for determining the optimal ways to meet the service parameters with reference to present business quality parameters and forecasted parameters.’
The goal of service capacity planning is to provide satisfactory service levels to users in a cost-effective manner.
Concept of Service Capacity
Service Capacity Planning Process
The queuing theory can be applied to the situations where customers arrive at some service stations for getting some service.
Arrival of customers in a queue for service is of course random in nature.
Queuing theory is Mathematical Models used for Service Capacity Planning.
It is a mathematical analysis of waiting lines and queues to calculate average waiting time and queue lengths from the information pertaining to the rate of arrival and the rate of delivery of service.
Queuing Theory
Queuing theory can be applied in variety of situations such as :
Arrival of aero planes at Airports
Banking Services in a bank branch
Handling customers in a telecom service centre
Waiting of Customers in Restaurants, Saloons etc.
Servicing of automobiles in Service Stations
Attending Patients in Hospital
Printer queues
Passengers at railway reservation counters
Customers waiting at billing counters in Supermarkets
Uses of Queuing Theory
Queuing Model
In case of customers coming randomly in a queue with First-Come-First-Served discipline, the following mathematical equations can be used to analyze the situation:
If W : Average time for a person to wait in the system
(inclusive of waiting time in the queue & getting the service)
λ : Number of customers arriving per period
μ : Number of customers that can be served per period
Nq : Average number of persons waiting in the queue
Wq : Average time for a person to wait in the queue
Then
Wq = Nq/λ = ρ/(μ-λ)
Nq = ρ2/(1-ρ)
W = Wq + (1/μ) = 1/(μ-λ)
Where
ρ = Utilization factor = λ/k*μ, where k is the number of counters for a service
Analysis of a Queue System
Single Server Model
Use of technology like bar code readers etc , which can reduce manual entries by staff manning the counters.
Training of staff members to handle the customers quickly.
Pre-designed forms, formats and standardization of processes.
Giving check lists to the customers and Use of display screens to provide such information to the customers.
Use of IT systems, which can provide all information to the service counters accurately and quickly.
Increasing Service Delivery Rate
Service Capacity is the maximum load that a service delivery utility can take.
Service Capacity planning is a process for determining the optimal ways to meet the service parameters with reference to present business quality parameters and forecasted parameters.
Queuing Theory can be applied to analyze the Service Delivery.
Recap

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