Guest Post: Self-Service and OM

Professor Howard Weiss, who developed the Excel OM and POM decision support software that we provide free with our text, provides his monthly Guest Post.

For decades, one of the Garden State’s most distinctive features is a law that prohibits motorists from pumping their own gas. Indeed, New Jersey is the only state with such a ban.

The New Jersey legislature, in a surprisingly bi-partisan effort, is considering enacting a law that would allow gas station owners to offer self-service at the gas pumps. The first self-serve gas pump opened in 1964 in Denver Colorado but nearly 60 years later New Jersey remains the only state without self-service as an option. From the standpoint of operations management, implementing self-service is something that the legislature should have passed years ago. Chapter 7 in your Heizer/Render/Munson textbook points out the advantages of flexibility in the production process– but flexibility in the service process can be just as important.

Consider the advantages of some self-serve operations:

ATMs installed at a bank increase the number of servers in the bank’s queueing model by the number installed, which means that customer waiting times are reduced. Self-service also allows for 24-hour service and service on weekends rather than just 9 to 5 weekday service. In addition, using ATMs increases the location options for banks. Labor costs are reduced because self-service means companies are using unpaid servers, the customers, rather than paid servers.

In the 1990s, retail self-service checkout systems were developed and now many supermarkets and big box stores such as Walmart or Costco have replaced traditional waiting lines with self-service waiting lines and have been able to fit more self-service lines in the same space as was used for traditional lines. Again, there are significant labor cost savings since instead of having multiple clerks, only one needs to be present to handle customer problems with the scanning devices. In the 2000s, airlines began using self-service kiosks that have the same advantages as retail check self-service.

The concept of self-service is not new beginning with the invention of the vending machine. In the 1930’s Horn and Hardart restaurants had self-service food dispensers. Laundromats have always been self-service. An irritating example of self-service is the automated telephone system directing callers to the next person/level.

More recent examples of self-service are the web sites where one transacts business by ordering from a web site or making reservations. The most  modern example of self-service are the Amazon supermarkets without any checkouts.

Classroom discussion questions:

1. What are some examples of self-service that you have used recently?
2. What are the disadvantages self-service?