Application of Feedback Control Method to Workforce Management in a Service Supply Chain

Success of services businesses depend on how well the workforce is managed. Having the right size of workforce and the right skill set of the workforce at the right time under dynamic demand environments are challenges that many service businesses face. Demand disturbances in services businesses are typically managed by adjusting the resource levels such as acquiring additional resources from larger pool (borrowing resources from the corporate levels for departmental level needs), and releasing resources back to the larger pool for transferring and cross training of the workforce. However, the resource adjustments for changing the level of workforce are not as easy as acquiring or scraping materials as in manufacturing supply chain. The magnitudes of resource adjustment are often decided by estimating the discrepancy between the demand for services and the supply of workforce. However, naïve feedback control of the resource actions by policies that equate the discrepancy to the control action can produce undesirable effects such as oscillation between acquisition and release of workforce, and amplified oscillation through the stages of the service processes. Feedback control methods have been used very successfully in many years for controlling many engineering processes; however, they have not been applied in services supply chains. In this work, we attempt to apply control theoretic principles in managing resources to see how various feedback control schemes can improve costs, utilization and stability of workforce. Our study indicates that effective combination of multiple feedback control schemes can produce desirable policies of workforce resource management.