cinepolis assignment d13

8/3/2019 Cinepolis Assignment D13

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A report

On

Field Visit Assignment

submitted to

Prof. Chetan Soman

In partial fulfillment of the requirements of the course

Operations Management

On

09th December 2011

By

Anup Kumar Singh

Ashim Sarkar

Mohamad Shazin Thotathil

Vijaya Sundara Pandiyan G

Vishwanathan Hariharan

[ Group 13 Section D ]

INDIAN INSTITUTE OF MANAGEMENT

AHMEDABAD

Objectives of the field visit:


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To understand and analyse the operations of a service organization

Organization Chosen: Cinepolis Cinema Multiplex.

Branch Studied: Cinepolis, Alpha-One mall, Ahmedabad

About the industry:

The industry can be classified as Assemble to Stock, with standard services of theatrical

experience being bundled with ambience and caf lounge food products. The customerdecoupling point is flexible to a certain degree as visitors can choose an available movie froma pool of movies. In the case of food products there are standard products which one canchoose from.

Description of existing setup:

Cinepolis has been in this industry for 64 years and with 2000 screens across the world, theyare the fifth largest multiplex operator worldwide. They have grown at a vigorous rate ofaround 10% a year in the last five years. They entered India 2 years back and currentlyoperate 26 screens in the country with plans to expand to 500 screens by 2016. Cinepolis,Ahmedabad is located in the Alpha-One mall and consists of a 6 screen multiplex with over

1100 seats featuring Hollywood standard 2k Digital screens, 7.1 Dolby digital audio as well as3-D screens powered by Real-D. In addition it also hosts an in-house Coffee Shop with a widerange of freshly prepared Gourmet food and beverages.

Layout:The multiplex is spread over three floors with the entrance to the screens beinglocated on the third floor. The layout for the third floor is shown below:

A view of the Cinepolis

entrance


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There are two Ticketing Booths, one on the ground floor and the other located on the thirdfloor. The capacity of each of the screens comes to about 174 seats, which enjoy on averageabout 50 % occupancy. In addition there are small LCD TVs near the counters which displaycurrent movie titles and timings.

The various aspects of the Cinepolis experience are described below:

Show timing and composition:The typical number of shown for the Ahmedabad branch is6. The number of shows for different movies is differentially allocated based on current

trends. We observed during our visit that there was one new release which had the round theclock as well as simultaneous shows. The lean timing of days is broadcasted with movies oflesser demand. This again is the technique to attract customers with inelastic demand ofspecific movie on any timing. There are totally 28 shows for a day and allocation is dynamicfor a movie and the schedule is prepared at least 6-7 days in advance. There are total of 6screens averaging 4.66 shows/day/screen. There are also special shows for the 3D version ofmovies with extra charge for the glasses which generate repeat business with economies ofscale.

Security check and bag deposit before entering screens:The checking counter had twocounters, one for men and other for women. The checking booth took 1-3 seconds to check aperson and only on exceptions there was a delay. The baggage counter was almost closelycoupled with checking counter and both can be viewed as a single stage. Standard tokensystem was followed. However the capacity to hold the bags seems lesser than needed andservice person were finding it difficult to make space. The collection point is different from thedeposit point. It is located at the exit way and the baggage are moved while the show runs.

Waiting time:The waiting time utilisation in Cinepolis has been a revelation in industry. Itfollows a similar pattern to the Benihana restaurant whereby Customers wait in the loungearea which is a typical food court. Thus, it becomes a source of income and customers arealso kept entertained with posters and trailers of upcoming movies.

Ticket checking:Typically there is one main ticket checker and 2 or 3 helpers who direct thecustomers to the right places. The ticket holds the right coordinates to locate the seat andhence crowding and confusion is reduced. A typical customer spends half a minute to find the

Customers

waiting in the


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seat and settling time varies from customer to customer. On average 15-20 minutes is keptbetween the customer arrival and actual cinema broadcast. The model is such that thecustomer can walk in even after the show has started.

Movie experience: There is an existing business model of customers ordering food inadvance and the food and beverages arrive at the seat. There is provision in seats to hold thebeverage container. The premium seats have push back feature and sofa models. The pricingvaries between how distant a customer is to the movie screen, and the quality of the seats.Except for the premium seating not much of difference is felt in services offered for othercategories. However the consumer surplus is tapped by offering differential pricing to similarseats and services.

Interval during movies: The interval break is for 10-15 minutes. The customers again lookout for food and beverages. From the days of snacks the multiplex industry has evolved tostages of offering different cuisines. The traditional snack outlet serves several bundledoffering through the so called Combo offers. The pricing of this bundled offerings are 20%lesser than the cumulative of the individual items pricing. The queuing is typically high butthe bottleneck is reduced by highly time efficient servicing typical to a fast food take awayoutlet. The computer billing and debit card features save a fraction of time. The vendingmachines and well planned assembly line model for other food items delivery reduces time

over head. There around 3-4 employees in the main outlet while the other kiosks have 1-2employees. One important aspect of lounge area offering is that there are several franchisesof food chains which are there apart from the Cinepolis owned standard outlets. The restrooms of Cinepolis have been constructed with over capacity in mind. The show businessmind set is extended even in the interior designing and sanitary arrangements.

Exit: The exit doors are different from the entry doors and it leads the customer directly tothe end of the multiplex. It is done so that the crowding factor is avoided and it is obvious toassume that outgoing customers will not buy food and snacks.

The Website: Websites have become very important aspect of business operations. Fromthe initial days of knowledge management it has evolved to become a crucial part of service

industry. The website of Cinepolis serves as a knowledge sharing portal, status update ofavailability and as a ticket counter with a business transaction associated with it. Almost 30-40% of the booking is done online for ticket booking. The percentage is much higher forinformation gathering and status checking. The website has ticket availability, show detailsand advertisements apart from the provisions for feedback, query and corporate details. Theuser interface is helpful for showing the availability and recommending the next availabledate.

Operations:

The flow of various operations during a typical movie screening is as follows:

Step 1: Ticket booking or purchasing

Step 2: Waiting time

Step 3: Security Check and bag deposit

Step 4: Ticket checking and seating

Step 5: Movie

Step 6: Interval

Step 7: Exit

In our study we have mainly focussed on the Customer facing activities of Cinepolis, while thedistribution and scheduling aspect has not been investigated.

Skills and Attitudes needed by the service personnel:


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The major personnel in Cinepolis consist of the Ticketing staff and service persons such asticket checkers, cleaning staff, food and other stall operators. The minimum educationalrequirement for Ticketing staff and stall operators was Graduate level, with fluency in Englishand Hindi being a must. Also since majority of the customers are Gujaratis, fluency in the locallanguage was also encouraged. An essential quality was that the service personnel wereexpected to be very friendly, helpful and easily approachable in order to provide high levels ofcustomer satisfaction. Also Ticketing staff was expected to be knowledgeable regarding themovies being showcased in order to suggest alternatives to the customers.

Process flow:

The customer flow through the process was observed and a process flow diagram depictingthe customer experience and perspective is depicted:

Service Operations Framework:

The services provided by Cinepolis can be classified in the following manner:

Service Process Matrix:

Degree of Interaction and Customisation

People purchasing ticket

at the counter on ground

People arriving at the

3rd floor (multiplex)

Security check and

Bag check on 3rd

floor

People purchasing

ticket at counter

People going to the People going to

food counter

People wait

outside the

People queue up

and Person checks

and tears of the

People walk in to

their seats

Previous show gets

over and cleaning


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Degree of LabourIntensity

High Medium Low

High

Medium Cinepolis

Low

Strategic Service Classification (Method of Service Delivery):

Availability of Service Outlets

Nature of Service Delivery Single Site Multi Sites

Customer travels to serviceorganisation

Cinepolis

Service firm delivers

Transaction at arms length

Strategic Service Classification (Nature of Demand and Capacity):

Extent of Demand fluctuation over time

Extent to whichDemand exceedsCapacity

Wide Medium Narrow

Peak demand can bemet without majordelay

Demand peaks onweekends or majorholidays

Peak demandregularly exceedscapacity

Strategic Service Classification (Relationship with customers):

Type of relationship

Nature of service delivery Membership relationship No formal relationship

Continuous delivery of service

Discrete transactions Cinepolis

Thus we see how the services offered by Cinepolis can be evaluated based on differentparameters. The degree of customization and the nature of demand and capacity are two

important parameters. Customization is provided in the choice of seats for a particular showwhich is subject to availability constraints. However there is no provision for modifying showtimings. With regards to fulfilling excess demand, there are occasions on weekends andduring big movie releases when the shows are completely booked and customers are forcedto reschedule. Similarly there are also occasions on weekdays when shows are sparsely


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occupied. There is also a company policy whereby shows are cancelled if some minimumoccupancy criteria are not fulfilled.

Ticketing Counter Queuing model:

The Ticket booking can be done in 3 modes.

Online advance booking Ticket booked through the website. One issue is that theonline booked member has to arrive an hour earlier to the show. It can be assumed as

an added visitor time strategy.

Counter advance booking Counter advance booking is available. However it is a raritywith majority of booking rates being through online booking and over the counterpurchase.

Over the counter purchase Over the counter booking holds the major share. Onedrawback is that the customer spends more time at the counter, and additionalnarration by the service personal has to be given about the status and availability.

The process of buying a ticket in the case of a customer who has not pre booked it online, canbe classified into a series of operations:

1) Customer decides the movie and show time after seeing the options on the LCD TV

2) Customer then spells out the movie name and show time to the ticketing personnel atthe counter

3) The ticketing staff informs about the availability

4) If available, the customer specifies the number of tickets

5) The ticketing staff asks about the seat preference (middle row, corner seats etc.)

6) The customer gives the preference

7) The ticketing staff specifies the total amount

8) The customer pays, simultaneously the ticketing staff processes the order

9) If the exact change is given, then the ticketing staff just gives tickets to the person andannounces

10) If not, then time is taken in exchanging the change and handing over the ticket

The service delivery model is as follows:

Cinepolis, Ahmedabad currently has two Ticketing Booths, one on the ground floor andthe other on the third floor which houses the entry to the theatres

Each booth has 4 ticketing counters of which only 1 is operational on most periods.Customers proceed directly to the queue and often finalize their choices while waitingin the queue itself

Usually customers arrive in batches of 2, and demand peaks up during the afternoonsaround 3:30 4:30 pm. A sizable proportion of people arrive having already bookedtheir tickets online, and just need to take the actual ticket from the counter

A serious drawback which we noticed was that many of the customers did not knowabout the counter on the third floor and thus there was a severe mismatch of demandon the two counters, with the terminal on the ground floor experiencing much higherworkload

Ticketing Booth #1 (M/M/S/Infinite/Infinite/FCFS)


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The customer arrival rate is assumed to be Poisson with Exponentially distributed servicetimes. The queue capacity is not infinite in literal terms but for all practical purposes it can beconsidered so, since instances of Balking are rare. However in the event that the show iscompletely booked the counter is closed and no further orders are processed. Also in thepresent scenario S can be considered 1, since even though there are 4 counters only 1 isusually operational. The customers are serviced on FCFS (First come first served) basis andthere is no priority system. The customers who have pre booked the show get their ticketsfinalized much faster.

Relevant performance metrics:

1. Average time spent for processing an order

2. Average number of people waiting in the queue

Basic Data (observed over a period of 5 hours on average for 4 days):

We observed that on average during lean periods the customer arrival rate was 40 personsper hour usually in batches of 2, giving an effective lean arrival rate of 20 per hour. Similarlythe effective peak period arrival rate was found to be 50 persons per hour. Thus, an averagearrival rate of 35 persons per hour was obtained. In the case of the service time it took on

average 69 s to process ticketing order for a customer giving an average service rate of 52.17persons per counter per hour. The maximum service time was around 92 s while the minimumservice time was around 37 s, which occurred in the case of pre booked customers. Therelevant data is tabulated below:

Customer arrival rate perhour ()

Lean period Average Peak period

20 50 35

Service rate per counter perhour ()

52.17

Utilization () 0.3833 0.9584 0.6709

Average no. of customers inqueue (Nq) 0.24 22.08 1.37

Average waiting time inqueue (Tq) (in minutes) 0.71 26.50 2.34

Average no. of customers insystem (N) 0.62 23.04 2.04

Average waiting time inqueue (T) (in minutes) 1.86 27.65 3.49

Based on the calculated data we have plotted the probability of finding k no. of customers inqueue where k varies from 1 onwards. The plots for the three different situations are asfollows:


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From the plots we see that while during lean periods there is less than 20 % probability offinding 2 people waiting in queue, the number increases to 37 people in queue (20 %

probability) during peak periods. On average there is a 20% probability of finding 4 people inqueue. Thus, tackling demand fluctuation is an essential attribute which must be furtherinvestigated for this system.

Ticketing Booth #2 (M/M/S/Infinite/Infinite/FCFS)


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In case of Ticketing Booth #2 on the third floor, demand fluctuation is much less since manycustomers are not aware of the counter. In this case also, of the 4 available ticket counters,only 1 is usually operational. The arrival rate observed was found to be very steady with nodistinguishable peak or lean periods.

Basic Data (observed over a period of 5 hours on average for 4 days):

We observed that on average 17 people arrived at the booth per hour, which is lesser thanthe arrival rate during the lean period for the counter on the ground floor. Thus we can

conclude that there is a wide variability in the demand experienced by the two booths. Theaverage ticket processing time at the counter was 62 s, giving an average service rate of58.06 persons per hour. In addition to the time spent waiting at the ticket counters,customers also have to pass through a Security check before entering the floor. The usualchecking time for men is around 10 s, while for women it can come to around 30 60 s sincethey usually carry bags with them.

The relevant data is tabulated below:

Customer arrival rate per hour () 17

Service rate per counter per hour () 58.06

Utilization () 0.2928

Average no. of customers in queue (Nq) 0.12

Average waiting time in queue (Tq) (inminutes)

0.43

Average no. of customers in system (N) 0.41

Average waiting time in queue (T) (inminutes)

1.46

The empty Ticket

booth on the third

floor


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Thus there is only a 5 % probability of finding more than 2 people waiting in queue. Thereforethe occupancy of this counter must be increased.

Recommendations/improvements identified to reduce waiting time and over-crowding:

We came up with few findings and recommendations based on our initial field visit analysiswhich may improve the business operation of Cinepolis. The recommendations are as follows:

1) Ensure that people know about the 2nd counter on the 3rd floor near the multiplex

screen. Specify this direction near the ground floor counter itself. This would prevent

the mismatch of demand on the two counters and reduce the average number of

people waiting in queue during peak hours at the ground floor counter.

2) The small LCD TVs near the counters do not serve their purpose. Keep a running screenoutside the glass windows of the counter which specify all the details like the movie

name, show timings and the price for each show. Specifying these details would mean

that movie-goers will not waste time in the queue deciding their choice and shelling out

change.

3) When a particular movie is running in many screens and demand is high for it, more

number of people will be in the queue. If it exceeds a fixed number, then it is

important to have additional counters functioning.

4) Identify the peak hours properly.

5) Focus on internet booking early.

Quick Scan Audit for the Industry:

1. What are the major time consuming activities in operation

2. What are the operations issues that the multiplex usually faces3. What are the way they are currently handled4. What are the steps involved in setting up a new multiplex5. What are the systems in place to guide customers once they are in the multiplex

premises


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6. How the employee team functions are structured7. How maintenance activities are carried out8. How does the multiplex estimate the turn out before selecting which movie to screen9. How does it decide on the movie mix for a day10.How do you collect customer feedback11.How do you ascertain customer satisfaction12.What are the facilities for Employee training13.How can you classify the service offered on various dimensions

14.What are the different aspects of the service package15.What is the strategic service vision16.Which skills and attitudes are needed by the service personnel17.How can customer demand be altered18.Can the customer/provider interface be changed to include more technology19.What is the scope for more self-service20.How the service is evaluated internally and what are the bench marks and standards21.

cinepolis assignment d13

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