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
