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Reducing waiting time by pooling demand


By pooling demand, the inter-arrival times are shortened and thus the specific demand goes up (which is intuitive, since pooling demand basically means combining different demand streams). While the utilization rate is not effected by demand pooling, the waiting time is shortened because some inefficiencies (idle time at station A while station B is overwhelmed) are eradicated. However, pooling more and more resources together also decreases the overall efficiency once the demand is met. Therefore, companies need to find a viable balance between efficiency and responsiveness.

What main benefits and costs are connected with pooling in the context of waiting time?

  • Pooling assumes total flexibility (Spanish call center agents will not be able to answer to German customers, even if the call center company decided to pool all calls together).
  • Pooling increases the complexity of the workflow, since demands needs to be shifted between resources who might be locally apart (e.g. two hospitals or two plants).
  • Pooling interrupts the continuity of interaction between the flow unit (customer) and the resource (worker) and can thus hurt the customer experience because customers will not want to see a different physician or a different financial consultant on every separate visit.
These lecture notes were taken during 2013 installment of the MOOC “An Introduction to Operations Management” taught by Prof. Dr. Christian Terwiesch of the Wharton Business School of the University of Pennsylvania at Coursera.org.
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Advantages of standardization


One common mistake in process optimisation is to just look at average processing times as well as at idle times. Instead, it is also important to evaluate the time differences between employees in order to find examples for best practice approaches. Those approaches can then be looked at while composing standards. The goal here is to figure out how exactly the top-performing employees achieve their results – and to find a way in which other employees learn something from them.

These lecture notes were taken during 2013 installment of the MOOC “An Introduction to Operations Management” taught by Prof. Dr. Christian Terwiesch of the Wharton Business School of the University of Pennsylvania at Coursera.org.

Labor content, cycle time and idle time


Cycle time, labor content and idle time are indicators for assessing the productivity of a process.

Cycle time: The cycle time is defined as the time between the output of two successive flow units (e.g. the time between two served customers or two treated patients). It is always equivalent to the time of the longest process step.

Total labor content: The total labor content is defined as the time sum of all process steps. If, for example, a process consists of two steps each claiming 20 seconds, the total labor content is 40 seconds.

Idle time: The idle time is defined as cycle time minus processing time. The idle time thus tells us for how long a resource (e.g. a worker) is not able to do anything, because he has to wait for another resource. If, for example, one worker in a sandwich restaurant prepares sandwiches while another operates the register, the second worker has to wait for a sandwich to be finished in order to collect on the customer. If the demand is maxed out, the idle time at the bottleneck is always 0.

Total idle time: The total idle time is the time sum of all idle time within a process.

These lecture notes were taken during 2013 installment of the MOOC “An Introduction to Operations Management” taught by Prof. Dr. Christian Terwiesch of the Wharton Business School of the University of Pennsylvania at Coursera.org.
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