Term Project – Call Center Operations

1. Term Project – Call Center Operations SOM 686, Fall 2006 Darren Mitchell Hayden Gilbert Serge Suprun

2. Agenda • Overview • Call Center Statistics (October), Definitions & Forecast • Process View of the Call Center • Call Center Competencies, Architecture, Three Key Measures & Little’s Law • Call Center Flow, Delays, Queues & Process Attributes • Flow Rate-related Measures of Call Center Capacity • Flow Time-related Measures of Customer Delay • Inventory-related Measures of Customer Queues • Performance Improvements & Managing Capacity

3. Overview • Time Warner Cable Los Angeles • Bought Adelphia • Exchanged properties with Comcast • Now provides cable, internet & telephone services to over 2 million customers. • Time Warner Advanced support is local • Teamed up with outsourced partner to provide basic support for all three products. • Basic support includes: billing, basic repair, changes to the accounts & general questions. • Outsourced partner provides basic support from 3 call center locations: USA, Canada & Argentina.

4. Overview • Call Center in Argentina supports English & Spanish-speaking customers. • There are 36 agents employed in the center • 12 are Spanish only • 24 are bilingual • On average, the call center handles 40,000 calls per month. • However, over last 2 months handled calls were 36.5% over forecast. • Service level suffered over past 2 months too • In October, only 32.4% of calls were answered within appropriate time limit.

5. Call Center Statistics (October) and Definitions • NCO – number of calls offered • ABA – number of calls abandoned; ABA% - percentage of calls abandoned • SVL – service level • ASA – average speed of answer • Hand – average handle time

6. Forecast • Past 2 months, Argentina used naïve forecast: • (Based on the last year historical data) • Forecast didn’t take into the account recent product changes & integration projects • As a result  October call volume was 32.4% over forecast. • We are suggesting to use Moving average forecast. Ex: • MA103 = (A10+ A9+ A8)/3, using last months data is (54,494+56,221+50,221)/3=53,636 • Therefore, F11=53,636. November forecast should be for 53,636 calls. This would allow Argentina to staff appropriately.

7. Process View of the Call Center Process Inputs Outputs • Inputs/Outputs – customers calling for service/customers completed the call • Flow Units – customers • Network of Activities and Buffers – answering customers’ calls • Resources – customer service agents (CSA), phone automated system (PAS), etc. • Information Structure – account management system, reference materials, etc.

8. Call Center Competencies and Architecture • 4 Dimensions for measuring the competence of the call center: • Process Cost • Process Flow Time • Process Flexibility • Process Quality. • Argentina call center focuses on the low cost. • Call center provides high-quality Spanish support. • Argentina call center process architecture is defined by the types of resources (CSA, PAS, etc). • Call center falls somewhere along the spectrum between two extremes (flow shop and job shop). • Flow shop fits better, as call center uses specialized resources that perform limited tasks & produce large volumes with high precision and speed.

9. Three Key Call Center Measures • Flow Time = Time Customer spends: • In automated phone system • Waiting in the queue for an agent • Talking to an agent. Ex: October Average PAS time is 46, Queue average waiting time is 32 & handle time is 462 seconds. T=540 seconds • Flow Rate = Number of customers that flow through a specific point in the call center process per unit of time. • Inventory = Total number of customers present within call center boundaries. Ex: Argentina call center is 24/7 & call patterns are very different. Therefore, to simplify calculations we will use I=27 customers

10. Little’s Law • Throughput = Average number of customers that flow through the call center per unit of time. • Little’s Law - Average inventory (=) Throughput (x) Average flow time. • I = R x T Ex: We identified: T = 540 seconds (9 min) I = 27 customers. Therefore, R = I/T R = 27/9 R = 3 customers/minute

11. Call Center Flow, Delays and Queues Capacity Rp = c/Tp Arrival Rate Throughput Customer Customer Ri R = Min (Ri, Rp) Number: Time: In: Ii + Ip = I Ti + Tp = T Queue + Service =Process

12. Call Center Process Attributes • Inflow Rate Ri = Average rate of customer arrivals per unit time. • In the Argentinean call center, Ri = 5 customers/minute Processing Time Tp = Average time required by agent to process the customer. • Tp = 462 (agent) + 46 (PAS) = 508 seconds • c = Number of agents in the resource pool • c = 36 agents in Argentina • Process capacity (Rp)= Total processing rate at which customers are processed by agents in the resource pool. • Rp = c/Tp orRp = 36/8.47 = 4.25 customers/minute • Buffer capacity (K) = Maximum number of customers that can wait in queue. • K = 120 (there are 10 lines that can hold 12 each at any given time)

13. Flow Rate-related Measures of Call Center Capacity • Throughput rate (R) = Average rate at which customers flow through the call center process • R = min (Ri, Rp) • In our case, Rp is smaller, so R = Rp = 4.25 • Capacity utilization (ρ) = Average fraction of the resource pool capacity that is occupied in processing customers • ρ = R/Rp • In our case, R = Rp and ρ = 1 • Our resource pool is constantly busy processing customers. • Safety capacity (Rs) = Excess processing capacity available to handle the customers inflows. • Rs = Rp – Ri • In our case, Rs = 4.25 – 5 = -0.75 • All the available capacity is busy processing arrivals.

14. Flow Time-related Measures of Customer Delay • Average waiting time (Ti) = Time that a customer spends in queue. • Ti =32 seconds. • Average theoretical time = Average processing time of a customer. • Tp =462 seconds + 46 seconds (automated system) = 508 seconds • Average flow time in the process (T) = Average time that a customer spends waiting in queue & being served • T = Ti + Tp or T • 508 + 32 = 540 seconds or 9 minutes • Flow time efficiency = Proportion of time that a customer spends being served rather than waiting in queue • Tp / T = .94

15. Inventory-related Measures of Customer Queues • Average queue length = Average number of customers waiting for service • Ii = R x Ti • Ii = 4.25 x 0.53 = 2.25 customers waiting for service • Average number of customers in service = Average in-process inventory • Ip = R x Tp • Ip = 4.25 x 8.47 = 35.99 customers in service • Average total number of customers in the process • I = Ii + Ip • I = 2.25 + 35.99 = 38.24 customers in the process

16. Call Center Flow, Delays and Queues Capacity Rp = c/Tp Arrival Rate Throughput Customer Customer 5 customers/min 4.25 customers/min Number: Time: In: 2.25 + 35.99 = 38.24 508 + 32 = 540 seconds Queue + Service = Process

17. Performance Improvements The following levers improved process performance: • Decrease variability in customer interarrival & processing times. • Decrease capacity utilization (or increase safety capacity) either by • Decreasing the arrival rate or increasing the unit processing rate • Increasing the number of servers • Synchronize the available capacity with demand.

18. Managing Capacity • Capacity utilization (ρ = Ri/Rp ) can be reduced by increasing average processing rate (Rp) • In order to increase processing rate (Rp = c/Tp) we recommended decreasing average processing time (Tp) • To achieve a decrease in processing time: • Identified that billing & escalated calls took longer to handle in this call center vs. similar centers. • Thus recommended & implemented 2 separate hour training segments • Billing prorates explanation • How to handle escalated calls

19. Call Center Statistics (November) • Processing time decreased to 410 seconds • Tp = 410+46 = 456 seconds or 7.6 minutes • Process capacity Rp = c/Tp or Rp = 36/456 = 4.74 customers/minute • Result: Capacity Utilization ρ = Ri/Rp or 5/4.74 = 1.06