3.21 service operation management

Introduction

 2020 and 2021 has been a very difficult period for Nightclubs- “an estimated 70%

of Nightclubs will close” due to the pandemic (Bakare, 2020).

 With forced periods of closures- a perfect time to analyse current service and find

solutions for existing problems, ready for the potential re-openings in Summer

2021.

 The De Montfort Student Union (DSU) Nightclub is usually open on Wednesday

nights during term times for students to attend.

DSU Service Concept Template The Service concept is defined as the organisations business proposition, and how an “organisation

would like its services to be perceived by its customers, employees, shareholders and lenders”

(Heskett- Salzer, 1986).

 The aim of the presentation is to analyse the DSU Nightclub- focusing mainly on

the recommendations stated within Assignment 1- finding the best solution for

each problem

 Witnessed the problems first-hand and spoke to the manager and employees

to understand their opinions and current day to day runnings.

Pareto Analysis

 Analysis of 62 Customer

complaints

Two Main Areas:

 Queuing System

 Overcrowded Dancefloor

Research Objectives and Questions

Current Queue Distribution

Key:

Very Busy

Moderately Busy

Quiet

• 26% of all Customer Complaints- Long Queues

• The Queue next to the main bar is very busy- and is

backing onto the Dancefloors- so when busy and

people are drunk- a lot of collisions.

• A lot of under- utilised space within the room.

Queuing System

Data Source: Group discussion with Managers and employees

Root Causes:

• Undertrained staff

• Only two tills for bar staff to use

• Random order service- not first come first serve

Final Effects:

• Lasting psychological damage for victim

• People at risk in event of fire

• Fights and injuries occur

Long Queues- Cause and

Effect Tree Diagram

Data Source: Group discussion with Managers and employees

Research and Solutions for Problems

Root Causes:

• Undertrained staff

• Only two tills for bar

staff to use

• Random order service-

not first come first

serve

Solutions:

• Add additionall tills

• Pay for Staff Training

• More automated check

out systems

• Let less people in

• Move the tills

Research:

A main reason for Management Neglect

• A high level of service (short customer wait times),

require increased costs, thereby reducing productivity

and effecting profits negatively in the short run (Davis,

1991).

Customer Expectations

• As technology advances, people are wanting more

convenient and faster payment methods, as shown by

an increase of 14% of contactless payment in 2017

(Peachey, 2018).

High Risk of Leaving Queue- Loss of Sale

• Heizer (2017) states that uncertain wait times feel

longer than known wait times and, occupied wait times

feel longer than and unoccupied waits feel longer.

• The longer the perceived wait- “focus mentally on

forgone benefits of alternative activities, experience

boredom, or suffer from heightened feelings of anxiety

and stress” (Janakiraman, Meyer and Hoch, 2011).

The Service Aspiration Level Model

Service Aspiration Level Model (Davis, 1991)

Option Matrix- Queuing System

Best Solution:

Additional Till

Recommendation: New Till

After speaking with the manager to see his most important business factors.

The Option Matrix has found that adding a new till would be the most effective

way of reducing the queue length. When an additional till was added to a UK

retail shop, the amount of customers served increased by 7% in busy periods (Qiu

and Zhang, 2013).

This means that an additional 7% of customers decided to join the queue and pay,

or did not leave the queue- due to their being lower wait times.

This will help reduce the uncertainty of wait times, as less people waiting at the

bar will mean that bar staff are able to see more clearly who arrived first.

In the DSU- arguments would be much less likely, increasing customer

experience levels, and job satisfaction for employees as they are under less

pressure.

Cost/ Benefit Analysis

See Appendix A for Calculations

Before and After Additional Till

Visual representation of how the DSU queues will be reduced in result of the

investment of a new till.

Before: After:

New till

Area 2: Analysis of the Overcrowded Dancefloor

Having spoke to the DSU staff for Assignment 1- a big problem was the

overcrowded dancefloor.

This was a result of a number of factors including:

• The queue from the main bar overflowing onto the dancefloors

• Poor design layout

• Uneven spread of congestion within small area.

Current Design Layout

• A lot of free space in bottom right corner

• Dancefloor 1 & 2 close to Main Bar Queues

• Bouncers at Entrance and Exit- no clear sight and availability to reach

troubled customers

Overcrowded Dancefloors

Overcrowded Dancefloor- Cause

and Effect Tree Diagram

Root Causes:

• Popular events with lots of customers

• Managers need to reach sales targets

• Poor design layout of venue

Final Effects:

• Lasting psychological damage for victim

• People at risk in event of fire

• Fights and injuries occur

Research and Solution for Each Problem

Root Causes:

• Popular events with lots of

customers

• Managers need to reach

sales targets

• Poor design layout of venue

Solutions:

• Add additional bar in quiet

space- with most popular

drinks so that the traffic can

be diverted to a quieter

area of the club.

• Increase dancefloor size

• More security/bouncers

inside venue on busier

nights

• Let less people in

• Have limit per dancefloor

Research:

Macintyre and Homel (1997) state that an

overcrowded dancefloor can lead to increased

number of accidental bumps between people.

Over time this leads to arguments and assaults

(Macintyre and Homel,1992)

This is mixed with a high level of alcohol intake-

heavy episodic drinking are associated with

changes in violent behaviour (Norström, 2010).

With the dancefloors being so full, it is much harder

for security to get through, or see incidents, which

will potentially put students at risk.

Option Matrix

Best Solution:

Add Additional

Bar

Recommendations- Additional Bar

The Option Matrix found that the best solution for the DSU would be to build a

New ‘popular drinks’ Bar- Selling particularly Bottled drinks that are very quick

to prepare and are very popular amongst students.

VK a popular drink within the nightclub sell saw sales volumes grow by 12% in

2018- showing the rising demand for the bottled drink (Waterworth, 2018).

This would help to eliminate the overflowing queues away from the dancefloor.

The quick bar would also allow the firm to increase customer service levels as

buying drinks would be a lot easier, whilst enhancing safety for customers as the

security will be able to have a better watch to ensure people are staying safe.

The Cost/ Benefit Analysis will help understand whether the DSU can expect to

see a return financially- as well as just reducing overcrowding.

Cost/ Benefit Analysis

Important to undertake

a thorough Feasibility

study to ensure that

the recommendations

are financially viable.

Project feasibility

study and creation of

report will be used to

help the manager to

advance the

recommendations into

action (Triants, 2018,

pp. 4a).

See Appendix B for Calculations

Before and After Service Layout

Before: After:

Visual representation of how DSU will become more space efficient after the new

bar is added. The lack of queue at the main bar will give more space on the

dancefloors- as the queues will not be backing onto them anymore.

New Bottle bar-

removing

unnecessary

traffic from the

dancefloor &

making the

venue safer

Conclusion

Recommendation 1- Reduce Queuing Times:

• Buy a New Till

Lower initial investment- high ROI 1800%- best case

Recommendation 2- Irradicate Overcrowded Dancefloors:

• Add additional Small Bottle Bar

More expensive initial investment- but higher returns in monetary terms.

Recommendations will indirectly increase safety levels, increase customer

experience and staff member’s job satisfaction.

Very profitable for business in long and short term.

Prior to any works- it is important to fully understand the Covid-19 Government

guidelines & university’s plan for the nightclub.

Thank You for Listening

References Bakare, L., 2020. 'We lost the love': UK nightclubs using Covid crisis to reassess scene. [online] the Guardian. Available at:

<https://www.theguardian.com/music/2020/aug/21/we-lost-the-love-uk-nightclubs-using-covid-crisis-to-reassess-scene> [Accessed 12 April

2021].

Davis, M., 1991. How Long Should a Customer Wait for Service?. Decision Sciences, [online] 22(2), pp.421-434. Available at: <https://search-

proquest-com.proxy.library.dmu.ac.uk/docview/198053029?pq-origsite=summon> [Accessed 13 April 2021].

Heizer, J., Render, B., & Munson, C. (2017). Principles of Operations Management: Sustainability and Supply Chain Management (Global

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Heskett-Saltzer, S., 1986. Making decisions based on bioethics, research: Review of Medical Physiology. AORN Journal, 43(2), p.563.

Janakiraman, N., Meyer, R. and Hoch, S., 2011. The Psychology of Decisions to Abandon Waits for Service. Journal of Marketing Research,

[online] 48(6), pp.970-984. Available at: <http://web.b.ebscohost.com.proxy.library.dmu.ac.uk/ehost/pdfviewer/pdfviewer?vid=2&sid=d238c128-

9714-4d5c-89f8-e1d0ae0e3517%40pdc-v-sessmgr01> [Accessed 7 April 2021].

Macintyre, S. and R. Homel (1997). Danger on the Dancefloor: A Study of Interior Design, Crowding and Aggression in Nightclubs. Research

and Policy Paper Number 7. Brisbane, AUS: Centre for Crime Policy and Public Safety, Griffith University.

Norström, T. and Pape, H., 2010. Alcohol, suppressed anger and violence. Addiction, [online] 105(9), pp.1580-1586. Available at:

<https://onlinelibrary-wiley-com.proxy.library.dmu.ac.uk/doi/full/10.1111/j.1360-0443.2010.02997.x> [Accessed 8 April 2021].

Peachey, K., 2021. Debit card payments more popular than cash. [online] BBC News. Available at: <https://www.bbc.com/news/business-

44496513> [Accessed 12 April 2021].

Qiu, C. and Zhang, W., 2013. Managing Long Queues in Seasonal Sales Shopping. SSRN Electronic Journal, [online] 15(1), pp.52-65.

Available at: <https://search-proquest-com.proxy.library.dmu.ac.uk/docview/1764523084?pq-origsite=summon> [Accessed 11 April 2021].

Richards, K., 2016. The Urgency of Creating a Culture of Caring: Start with You!. Nursing Economics, [online] (3), pp.152-155. Available at:

<https://search-proquest-com.proxy.library.dmu.ac.uk/docview/1794903910?pq-origsite=summon> [Accessed 24 April 2021].

Waterworth, S., 2018. VK shows continued sales growth - Drinks International - The global choice for drinks buyers. [online] Drinksint.com.

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Appendix Appendix A: Queuing System: Additional Till

Costs:

Till: £996

Additional Staffing Costs: £0 (already employed)

Benefits:

FY19 Drinks Revenue: £183,500

Potential Revenue: £183,500 x 1.07 = £195,810 = Additional Revenue = £12,310

Training Cost: £300

Turnover Cost: £6,200 = 30-50% of Salary (Richards, 2016)

TOTAL: £18,810

Appendix B: Overcrowded Dancefloor: Additional Drinks Bar

Costs:

• Materials: £500 (approx. according to local builders)

• Labour: £500 (approx. according to local builders)

• New Till: £996

• Fridge: £650

• Total: £3,046

Benefits:

• 4% Less walk away Queuers- £7,034.29

• No Venue Closer- 4-6 week revenue: £15,000

• Less ‘Staff Turnover’ potential saving of 30-50% of Salary (Richards, 2016): £6,200

• TOTAL: £28,324.29