Supply Chain Exam 3

mobile queues

queues formed virtually with technology like placing name in real time and getting texted when table is ready creates flexibility and reduced stress level

5 dimensions of service quality

reliability responsiveness assurance empathy tangibles

blended delivery

restaurants

focus

serve a narrow niche better than other firms EX: grocery shopping for you, mechanic specializing in VOLVO or Porsche repair, custom stereo in your house or car

pure service

services offering very few or no tangible products to customers EX: consulting, storage facilities, training/education

facilitating goods

tangible elements that are used or consumed by the customer or the service provider along with the service provided (Deposit form, statement)

service delivery system

the delivery of services can be expressed as a continuum with mass produced, low-customer contact systems at one end, and highly customized, high customer contact systems at the other end

service capacity can be expressed as

the number of customers per day, shift, hour, month, or year that the company's service system is designed to serve

low customer contact systems

ticket kiosks vending machine automated teller machine (ATM)

T/F: Balking occurs when customers decide to leave the queue after some length of waiting time in the queue

False

T/F: The optimal capacity utilization for a service organization is 100%

False

T/F: Themed restaurants such as the ESPN zone (sports), Rainforest Cafe (jungle), and Chuck E Cheese (kids) are all examples of Entertailment facilities

False

CRM provides

a means and a method to enhance the experience of individual customers so that they will remain customers for life

assurance

ability to convey trust and confidence to customers

CRM involves

acquiring, retaining, and partnering with selective customers to create superior value for both the company and the customer

managing wait time involves

actual waiting time and perceived waiting time

Service Capacity examples

airline capacity= # of seats and # of planes restaurant capacity=number of tables hotel capacity= number of rooms

structured queues

are set in a fixed position such as super market checkout line, airport or bank EX: take a ticket number (sometimes)

implicit services

attitude of servers, atmosphere, waiting time status, privacy, security and convenience

explicit services

availability and access to the service, consistency of service performance, comprehensiveness of the service, and training of service performed (vault, safe deposit boxes, loans)

CRM is about

building and maintaining profitable long term customer relationships beyond the one off buy and sell transaction

bundling service effect

can deliver more than expected and enhance customer satisfaction

long-range

capacity can be used as a preemptive strike where the market is too small for two competitors to co-exist strategy for building ahead to avoid losing customers

balance

capacity decisions must be balanced against the costs of lost sales if capacity is inadequate...or against operating losses if demand does not reach expectations

level demand strategy

capacity remains constant regardless of demand -when demand exceeds capacity, queue management tactics deal with excess customers EX: One line instead of many lines, numbers in deli

multiple channel, single phase, single server example

customer, to one of multiple available service representatives

multiple channel, multiple phase, multiple servers acting in parallel example

customer, to one of multiple fast food order takers, to fast food cook

distribution channel methods

eatertainment entertailing edutainment

if capacity exceeds demand, instead of disposing of excess capacity

find other uses for the available capacity -do other jobs when not busy -training or cross training -demand management techniques

global services

increasing all over the world and managing them involves a number of issues

why is a successful CRM program simple

it involves training users within the company to make customers feel valued

recovering from poor service quality

keep customers loyal and coming back serves as good word of mouth advertising

service capacity utilization

capacity utilization= actual customers served per period/capacity

chase demand strategy

capacity varies with demand -handle fluctuations but must take appropriate actions prior EX: open up additional line, call in additional off-shift workers to meet increased demand

Edutainment

combines learning with entertainment to appeal to customers looking for substance along with play EX: liberty science center, epcot center

eatertainment

combines restaurant and entertainment elements EX: Dave and Busters, Medieval Times, Rainforest Cafe

Entertailing

combines retail with entertainment elements EX: Mall of America has ferris wheel, rock climbing wall, fashion shows, play area

reliability

consistently performing the service correctly and dependably

service strategies

cost leadership differentiation focus

single channel, single phase, single server example

customer to service representative

single channel, multiple phase, multiple servers acting in a series example

customer, to hostess, to wait staff, to chef

State utility

services which directly involve things owned by the customer EX: car repair, dry cleaning, haircut, healthcare

end products

services which offer tangible components along with the service component EX: restaurants, food along with dining service

A successful CRM program is both

simple and complex

loyal customers

source on most profits, and a relatively small percentage of those customers may generate most of the profits for the company

who should relationships be built with

strategically significant customers that are likely to provide the most value for the effort

queue types

structured queues unstructured queues mobile queues

bundle service includes

supporting facility, facilitating goods, explicit services, implicit services

customer relationship management (CRM)

transformation of the people, process, and technology required to become a customer-centric organization

service capacity planning challenges

-service providers are 100% reliant on the customer to create the flow of demand, which has a direct impact on their ability to fully utilize capacity -customer arrivals fluctuate and demand varies -customers are participants in service and level of congestion impacts on perceived quality -idle capacity is reality for services -inability to control demand results in capacity measured in terms of inputs

goods vs. services

-services cannot be inventoried -services often unique to customer -services have high customer interaction -services are decentralized

queuing system design

-single channel, single phase, single server -single channel, multiple phase, multiple servers acting in a series -multiple channel, single phase, single server -multiple channel, multiple phase, multiple servers acting in parallel

How does supply chain management in the service industry differ from manufacturing?

-tangibility -involvement of the customer in service process (more directly involved in service) -assessment of quality -labor content (higher ratio of labor to materials in the service industry) -facility location considerations

The number of customers per day an organization's service delivery system is designed to serve within a certain time frame, is referred to as? A. Service Capacity B. Capacity Utilization C. Productivity Potential D. Service Throughput

A. Service Capacity

Which of the following would NOT be considered an acceptable option in managing capacity when demand exceeds available service capacity? A. Utilizing fewer facilitating products B. Utilizing technological tools like computers and automated systems C. Sharing cross-trained employees D. Using customers to provide services

A. Utilizing fewer facilitating products

The three general service strategies are? A. profit-based, non profit, and free services B. cost leadership, differentiation, and focus C. manufacturing, service, retail D. mass-production, make-to-order, and services

B. Cost leadership, differentiation, and focus

Bundle of Service Example

Banking industry

All of the following are included in the five dimensions of service quality EXCEPT? A. Reliability B. Responsiveness C. Reasonability D. Assurance

C. Reasonability

service capacity decisions

long-range short-range balance

queuing system assumptions

-assume customers enter the queue, and stay in the queue until served -assume an infinite length of a queue

CRM is successful through processes including

-communicating with customers -understanding their behavior and their requirements -building a system to satisfy those requirements

managing service quality

-customer satisfaction depends on ability of firm to deliver AND customer's perception of the quality of the service received -depends on the firm's employees to satisfy expectations -key is to exceed the customer expectations so you also need to help form expectations

queuing system input

-customers are demand source for services and their arrival triggers the start of service experience -generally appear in predictable arrival patterns (dinner rush) -Poisson distribution to predict arrivals

service recovery systems require

-developing recovery procedures that are thought out prior to the bad event happening -training employees in these procedures prior to the even -empowering employees to remedy customer problems and recognizing them when they do

CRM is successful by

-focusing on customer requirements -delivering products and services in a manner resulting in high levels of customer satisfaction

improving service productivity is challenging due to

-higher labor content -individual customized services -difficulty of automating services -problem of assessing service quality

issues with managing global services

-identifying global customers -labor, facilities and infrastructure support vary by country -legal and political issues -domestic competitors and the economic climate

waiting time management techniques

-keep customers occupied -start the service quickly -relieve customer anxiety -keep customers informed -group customers together -design fair waiting system

layout strategy

-layouts designed to reduce distance traveled within the store -departmental layouts to maximize closeness desirability

location strategy

-make it easy for customers to find the facility/store -once they arrive, make it easy to find what they want, or to find what you want them to find

managing perceived waiting times

-mathematical formulas used to help predict wait times -techniques for reducing the time spent waiting and/or the perception of the time waiting, for the service to be delivered (disney and other theme parks with music and characters-distract customers)

queue system characteristics

-queue discipline describes the order in which customers are served -queuing can be comprised of single or multiple lines -queue lines can be serviced by either a single server or multiple servers multiple servers can also act in series or in parallel

2 Rules of Service

1. Satisfaction= customer perception >= customer expectation 2. hard to play catch up

Companies need CRM in order to

1. acquire new customers 2. retain their existing customers 3. help meet the changing expectations of customers

Goals and benefits of CRM

1. increased customer satisfaction 2. increased customer loyalty and retention/faster responses 3. increased revenue 4. growth of the customer base through referrals 5. a simplified and more cost effective marketing and sales process 6. increase sales effectiveness (Closing sales faster) 7. increased sales through cross-selling and/or upsetting 8. access to updated customer information and personalized interactions 9. automation of repetitive tasks

4 primary activities of Service Response Logistics

1. service capacity 2. waiting times 3. distribution channels 4. service quality

to minimize cost of hiring and laying off employees in high demand

1. share employees who have been cross trained 2. use part time employees 3. use customers (self checkout) 4. use technology 5. use employee scheduling policies

demand exceeds capacity and no capacity to serve extras: 3 alternatives

1. turn customers away 2. make customers wait 3. increase service capacity

Which of the following items would be considered a facilitating product? A. The automobiles washed by the car wash B. The suits being cleaned by the dry cleaner C. The tools used to fix your car at an auto shop

C. The tools used to fix your car at an auto shop

T/F: A service bundle includes the explicit service, the supporting facility, the facilitating goods, as well as the implicit services

True

T/F: When a customer take their automobile to a car wash, the car wash provides state utility to the vehicle

True

short range

lack of short term capacity planning can generate customers for the competition

managing service capacity

level demand strategy chase demand strategy

supporting facility

location, layout, architectural appropriateness, equipment, decoration (drive up tellers, ATMs)

cost leadership

lowest cost service provider -requires large capital investment in state-of-the art equipment and significant efforts to control and reduce costs EX: Auto diagnostics software, route planning to reduce windshield time, UPS optimization

Primary concern of service response logistics

management and coordination of the organization's service activities

why is a successful CRM program complex

means finding affordable ways to identify potentially thousands, if not millions, of customers and their needs, and then designing customer contact strategies geared toward creating customer satisfaction and loyalty among you segments of customers

service capacity

number of customers that the service provider can service at any one time -planned capacity for the service environment

high customer contact systems

personal shopper hair stylist financial manager

tangibles

physical characteristics of the service including facilities, servers, equipment, associated goods, and other customers

responsiveness

promptly and timely service

empathy

providing caring attention to customers

types of services

pure service end products state utility

internet distribution strategies

pure strategy: many retailers sell products exclusively online (Amazon) mixed strategy: use online as supplemental distribution channel (Walmart)

services and facilitating goods

services may require facilitating goods which are tangible elements that are used or consumed by the customer or the service provider along with the service provided -need to be purchased, transported, received, and warehoused in order to proceed the service activity -generally activities occur behind the scenes -customers have no idea how these facilitating goods actually get to the destination but they sure notice if they are not available as expected

differentiation

unique service created based on customer input and feedback EX: being different from another local dealer (Sunday service at hyundai or ford

queuing management system

used to help control the flow and prioritization of people expecting to receive a service EX: amusement parks, airports, retail stores

balking

when a customer refuses to join the queue

reneging

when customers decide to leave the queue

Unstructured Queues

when people form queues somewhat informally in various directions and locations like in retail stores, airport waiting for a taxi, waiting for an ATM