Aggregate Planning for Service Organizations

Service organizations can also use aggregate planning. The typical service operation, however, is make -to- order than make-to-stock. Consequently, finished goods are not available for responding to demand fluctuations. Instead, backlogs of customer requests can be increases or decreased to utilize capacity at desired levels.

The following example shows how a city’s parks and recreation department could use the alternative of full-time employees, part-time employees, and subcontracting to meet its commitment to provide a service to the city.

Tucson Parks and Recreation Department has an operation and maintenance budget of $9.760.000. The department is responsible for developing and maintaining open space, all public recreational programs, adult sports leagues, golf courses, tennis courts, pools, and so forth. There are 336 full-time-equivalent employees (FTEs). Of these, 216 are full-time permanent personnel who provide the administration and year round maintenance to ail area. The remaining 120 FTE positions) show up as approximately 800 part-time summer jobs:

Lifeguards, baseball umpires, and instructors in summer programs for children. Eight hundred part time jobs came from 90 FTEs because many last only for a month or two, while the FTEs are a year long.

Currently, the only parks and recreation work subcontracted amounts to less than $100,000. This is for the golf and tennis pros and for grounds maintenance at the libraries and veterans cemetery.

Because of the nature of city employment, the probable bad public image, and civil service rules, the option to hire and fire full time help daily or weekly to meet seasonal demand is out of the question. However, temporary part time help is authorized and traditional. Also, it is virtually impossible to have regular (full-time) staff for all the summer jobs. During the summer months, the approximately 800 part-time employees are staffing many programs that occur simultaneously, prohibiting level scheduling over a normal 40 hour week. A wider variety of skills are required (such as umpires, coaches, lifeguards, and teachers of ceramics, guitar, karate, belly dancing, and yoga) that can be expected from full-time employees.

Three options are open to the department in its aggregate planning:

• The present methods, which is to maintain a medium level full-time staff and schedule work during off-seasons (such as rebuilding baseball fields during the winter months) and to use part-time help during peak demands.
• Maintain a lower level of staff over the year and subcontract work, including part time help. (This would entail contracts to landscaping firms and pool maintenance companies as well as to newly create private firms to employ and supply part time help.)

The common unit of measure of work across all areas is full time equivalent jobs or employees. For example, assume in the same week that 30 lifeguards worked 20 hours each, 40 instructors worked 15 hours each, and 35 baseball umpires worked 10 hours each. This is equivalent to (30 x 20) + (40 x 15) + (35 x 10) = 1,550 ÷ 40 = 38.75 FTE positions for that week. Although a considerable amount of workload can be shifted to off-season, most of the work must be done when required.

Full time employees consist of three groups;

• The skeleton group of key department personnel coordinating with the city, setting policy, determining budgets, measuring performance, and so forth;
• The administrative group of supervisory and office personnel who are responsible for or whose jobs are directly linked to the direct labor workers; and
• The direct-labor workforce of 116 full time positions these workers physically maintain the department’s areas of responsibility, such as cleaning up, mowing golf greens and ball fields, trimming trees, and watering grass.