Opportunity Loss of Project Wait Times

Project organisation simulation model demonstrating how the ‘experience‘ of waiting is more important than the actual ‘time‘ spent waiting. 7 min read.

Project Delivery Wait Time

Our previous blog, Long Project Cycle Times Increase Costs, identified a project service multiple-channel design outperforms a single-channel design. Resulting in significantly improved project cycle time, resource utilisation and project throughput.

Project Wait Time Simulation

The following simulation improves the MM2 model by incorporating the real-world scenario of client baulking (refusing to join the queue) and reneging (leaving the queue after entering). Most clients baulk or renege when a queue is longer than some critical value depending on their psychology of costs, perceptions of time and ability to switch.

For this simulation, it is assumed clients will not place an online order when the project queue length exceeds 8. For those that do book online clients will cancel their order if they are not serviced within 4 hours.

While market research is undoubtedly beneficial to understand how clients purchase and consume a service. It is sometimes insightful being empathetic to a customer’s experience and determining what good looks and feels like.

In all other aspects, the MM2 model remains the same with no change in inter-arrival or service times.

Delivered, Reneged and Balked Simulation Results

  • Delivered Projects: 861 (92%) projects.
  • Baulked Projects: 62 (7%) projects.
  • Reneged Projects: 15 (2%) projects.

The total number of arriving projects equals 938, which compares favourably with the previous MM2 model results. Model simulation shows resources have an average utilisation of 71%, i.e. 29% of the time a resource is idle and that clients experience an average wait of ~1.0 hour. These results show that even though clients are being serviced quickly and have a short wait time, that this organisation suffers a 9% opportunity loss. In effect, how clients ‘feel’ while joining and waiting in a queue matters more than the length of the queue and wait.

Project Services Queuing Summary

The simulation results show that to minimise client baulking and reneging opportunity loss, project organisations need to consider queuing psychology. Even though this organisation has taken steps to ensure 99% of clients are serviced within 8-hours, 9% of clients choose not to purchase a service due to their perceptions of queues and waiting.

The “experience” of waiting is more important than the actual “time” spent waiting.

This insight has important implications. While no-one enjoys waiting in a queue, a person’s attitude towards queuing is more influenced more strongly by other factors. For instance, clients may become infuriated if they experience a ‘social injustice’, defined as a violation of ‘first in, first out’. ‘Queuing environment’ and ‘feedback regarding the likely magnitude of the delay’ can also influence client attitudes and ultimately, in many instances, an organisation’s market share. By focusing purely on the wait overlooks the ability to influence a client’s experience by positively enhancing their experience.

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Learn More

If you would like to know more about leveraging data-driven actionable insights for your project portfolio, then feel free to contact me on itierney@pminsight.com.au.

www.pminsight.com.au

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