Friday, 30 October 2015

What are the Types of Best Practices?

There are many different best practices. Some are built for all sorts of reasons. You will find them in place for processes, information, organisation, technology, people and policy.  The use of best practices is to create a framework for the design, implantation and operation at the highest level of performance.
  • Policy Best Practices – These logical and practical policies create the governing rules for the overall process of operation to ensure that the organization is compliant and consistent without limiting flexibility. 
  • Process Best Practices – These are the organisation’s building block and describe how the activity or task is accomplished. 
  • Information Best Practices – The information best practices laid out the details of what is needed to start to finish and track the process. It also helps managers to understand the value of the process.
  • Technology Best Practices – The technology best practice process is supported by the integration of mechanical, computers and communications technology. They may vary depending on roles. For planners, this may include management information systems, email and simulation models, while for chef, it may mean mixers, ovens and pans.
  • Organisational Best Practices – The organisation best practices refer to how key human factors such as motivation, incentives, skills, experience, education, training, loyalty and commitment should be deployed and managed.    The main ingredient in the organizational best practice is people best practices.  It is also the hardest to manage and get right since motivation , preparation and performance of the individual are addressed.

Thursday, 29 October 2015

What are the 7 Best Practices Criteria? Part Three

Today is our final look at the 7 best practices criteria. This week we’ve already focused on:
  • Effect of a Measurable Change in Performance
  • Exploration of  Proven Technologies
  • Proven in Practice
  • Application of a Broad Spectrum of Organisations
  • Acceptable Levels of Control and Risk Management
We’re now looking at the final two, Skills and capabilities match those of the organisation and the ability to operate efficiently in an ever changing world.

Skills and Capabilities Match those of the Organisation
A common mistake is failing to ensure there are skills in place in order to leverage the practice fully. There is no point in implementing a best practice if the capabilities aren’t available or if the plans have not been put in place to develop them.  When there are no capabilities or skills in place the whole thing becomes pointless and it can result in large expenses for the organisation and little change being made on the performance of the company.

Operating Efficiently During Uncertain Times

A best practice needs to be effective and functional in a wide variety of economic climates.  Organisations need to know that the best practices will see them through the good and the bad times and be able to adapt during turbulent times. Being able to respond to the changes in the environment is essential. 

Wednesday, 28 October 2015

What are the 7 Best Practices Criteria? Part Two

Today we’re continuing our look at the 7 best practices criteria.

Proven in Practice
The best practice has to work and therefore been proven in practice is considered to be the most important criterion of them all. If the best practice has been created it also needs to be put into practice to ensure what has been put onto paper will actually work.  Once proven it will have a reduced risk profile and deliver results. It will have been carefully and accurately evaluated in operation and the results measured, reducing the risks to the organisation.

Exploits Proven Technologies
There is a gap in technology between what the technology delivers and what it promises to deliver. New technologies that are used must deliver what they say and the users need to be confident in the technology that they are using.

Acceptable Levels of Control and Risk Management
Any practice that increases risks cannot be considered as a best practice. The best practices need to maintain control to at least the existing levels while reducing risks. 

Tuesday, 27 October 2015

What are the 7 Best Practices Criteria? Part One

Best practices are defined as criteria that need to be met. The best practices need to:
  • Effect a measurable change in performance
  • Apply to a broad spectrum of organisations
  • Proven in practice
  • Exploit technologies that have been proven
  • Have control and risk managements to an acceptable level
  • Skills and capabilities match those of the organisation
  • Be able to operate efficiently in an ever changing world
Over the next three blog posts we’ll be taking a quick look at each of these criteria.

Effect of a Measurable Change in Performance
Best practice lets the company achieve the highest potential level of performance and that performance is measured. This removes the problems that are caused by organisations that make changes without measuring the effect.

Apply to a Broad Spectrum of Organisations
A best practice that only has value with it can be applied to a wide range of organisations and this is what differentiates the best practice from a distinctive capability. Having said that, a best practice can’t always be adapted to every organisation but it should be applied to more than one company and more than one industry. The best practice should match a company’s culture, strategy, maturity, internal structure and execution capability. They can be:
  • Business model specific
  • Industry specific
  • Regulatory
  • Scale driven

Monday, 26 October 2015

What are the Common Sub-Processes Comprised in a Performance Part Two

Today we’re continuing our look at the most common sub-processes that are used in a performance.

Management Reporting
The management reporting gathers all of the activities that are required for reporting performance measures, the events, news and analysis along with additional information that is used to support decision making.  They often include the following:
  • Current and previous results
  • Forecasts
  • Plan comparisons
  • The calculations and reports of the financial and nonfinancial performance measurements
  • Variance analyses
  • Customer analysis concerning the product
  • Organisational performance
  • Fulfilment
  • Ad hoc reporting
  • Consolidation
  • Presentation of the business results
Forecasting involves updating the view of the future performance periodically, so that new information is taken into account. The forecasts need to be prepared and consolidation for different performance dimensions, including the external market size, share, sales, operating costs, capital spending and production. The changes that are made to previous forecasts need to be explained and discussed held regarding the changes that are required as a result of the altered forecasts.

Risk Management
Risk management is where risks are identified, managed, assessed and then management strategies are created in order to manage the risks. There are different strategies used that may involve transferring the risks to other parties, how to avoid the risks or reduce the negative effect of the risk or how to take advantage of the risks. Business risk management includes all sorts of risks, such as financial risks. Credit risks, exchange and interest rates along with reputation and product obsolescence.

Saturday, 24 October 2015

Chit Chat: Millennial Consumer

The millennial are consumers aged between 18 and 34. Marketers are facing changes as millennial no longer seem to respond to traditional forms of advertising. It’s a new horizon as consumers are no longer responding to name brands after switching in order to save money and get more for their tight budgets, so what can marketers do to cope with these changes?

Millennial don’t have the time or the patience to do their research into brands. That doesn’t mean they don’t love brands, it just means they often stick to the ones they already know about and they won’t spend time agonising over purchasing decisions. Brands that focus on saving their consumer’s time and providing reassurance and trust are the ones that are winning.

It is important for the brands to reach out directly to the Millennial, rather than reaching parents first. It needs to be personal and direct and a relationship has to be formed. Building affinity with Millennial is one of the ways brands are succeeding in becoming the next big thing.

Focus on being fresh in marketing is a must and capturing the hearts and the minds of this new generation is proving to be a hit. This can be more of a challenge for establishing brands than those new to the market, but there are plenty that has adapted well to new marketing techniques, including Cheerio’s and Dove.

One of the problems new brands face is breaking through the constant supply of brand messages that are sent through all forms of media. Therefore the new brands really have to provide answers that Millennial want to know, as quickly and efficiently as they can.

They need to show why they can be trusted and what benefits they bring to the lives of their consumers.
Social media is a huge part of marketing and brands must be willing to take on this new arena with confidence. Consumers will talk about brands and with brands on social channels. In return brands have access to huge markets, instant and direct feedback and the opportunity to provide excellent customer service. There is also an opportunity to entertain consumers, something that Millennial enjoy and respond to.

Brand messages also need to be enticing and educational. When Millennial respond, the brand can benefit from the brand loyalty that is found in this demographic.

Friday, 23 October 2015

How to Construct Aggregate Plans with Different Strategies for Meeting Demand

The aim of the aggregate operation plan is to set the production rates by broad categories, such as product group, for the intermediate term (between 3 to 18 months).  The purpose of the plan, that takes place before the master schedule, is so that an optimal combination of the workforce level, inventory and production rate is specified.

The production rate is the amount of units that need to be completed for the specified unit of time. The workforce level is the amount of the workers that are required for production and the inventory is the amount of unused inventory that has been carried over from another period.

The person responsible for constructing the aggregate plans will use all the information regarding inventory, production rate and workforce level to come up with a plan that will make the very best of the resources at hand. Another option is to add unitised required output and this is used as the base for the aggregate plan instead.

Thursday, 22 October 2015

What is Sales and Operations Planning and How it Coordinates Manufacturing, Logistics and Service Plans?

Firms can provide a higher level of customer service, stabilise the production rates, level inventory and short lead times by using sales and operations planning. The design process of sales and operations planning coordinates the field activities with the manufacturing and the service functions that are needed to meet demand over time. The field activities do alter depending on the situation, but they may include supplying the warehouse, retail stores, distribution centres or the direct sales channels.

The process is made to help the firm find a balance between demand and time and requires coordination and teamwork between different departments in the firm, including operations, sales, distribution and logistics and product development. 

The sales and operations planning requires a number of meetings that end with a high level meeting where all the important intermediate term decisions are made. The end goal is to have all the departments agree on a course of action that will ensure a balance between supply and demand. 

Wednesday, 21 October 2015

What are the Qualitative Techniques in Forecasting?

There are four types of qualitative techniques in forecasting.
  1. Market research
  2. Panel Consensus
  3. Historical analogy
  4. Delphi method
Market Research is often taken outside of the company. This type of forecasting may involve the use of market surveys. The market research is often used to learn more about product preferences to come up with new ideas, what consumers like and don’t like and to learn more about competitive products.

Panel consensus works on the idea that two heads are better than one. A panel of different people from different positions is used to come up with a reliable forecast. Open meetings are held where ideas are exchanged. Higher levels of management are involved when decisions in forecasting are at a higher level – such as new product design.

Historical analogy is when an existing product is used as a model. Analogies can be classified as substitutable products, competitive products, complementary products or products as a function of income. For example, if a firm makes kettles and they want to expand into toasters they can use the kettle history as a growth model.

The Delphi model hides the identity of the participants in a survey so everyone is treated the same. This avoids problems where the higher level people are taken more seriously than those at a lower level. The steps of the Delphi model are as follows:
  1. Choose the experts and include people with different areas of knowledgeability.
  2. Use questionnaires and obtain forecasts from all of the participants.
  3. Summarise the results and send them out to the participants with additional questions.
  4. Summarise the new results and refine the forecast and conditions and add new questions. This step might need to be repeated.
  5. Share the results with the participants.

Tuesday, 20 October 2015

What are the Differences between Independent Demand and Dependent Demand?

Products need to be delivered on time and the supply chain needs to run efficiently. For this to happen, it is necessary to coordinate and control the sources of demand. There are two sources of demand-independent demand and dependent demand.

Dependent demand is the demand for a product that is a result of the demand of other products. Independent demand is a product that has a demand that isn’t derived from other products. Firms have little control over dependent demand, but there are things a firm can do to control independent demand if they choose to. The options include:
  1. Actively influencing demand using incentives and putting pressure on their sales force.
  2. Choose to respond to demand passively and simply accept the level of demand.
Firms may have little power to alter the demand due to the cost of advertising and marketing or because the demand is simply out of their control. There are legal, environmental, competitive and ethical issues that may require the firm to passively accept the demand level.

Monday, 19 October 2015

What are the Issues with Facility Location – Part Two

Labour quality – The workers need to have an educational and skill level that matches the needs of the company. The labour pool must also be willing to be trained and to learn the new skills that may be required.

Suppliers – A suitable location will have plenty of high-quality suppliers to support the lean production methods.

Free trade zones – A free trade zone is a close facility where foreign goods can be bought without customs requirements, but the zone is under customs supervision.

Government barriers – Legislation can remove barriers in place to enter and located in lots of countries.

Other facilities – Having other plants and distribution centres with different product mixes and capacity can have an impact on the facility location.

Trading blocs – One of the new trading blocs is the CAFTA – Central America Free Trade Agreement.

These types of agreements do have an influence on location decisions. Companies will move inside or outside a trading bloc country in order to take advantage of new opportunities or lower costs.

Environmental regulation – Environmental regulations that have a direct impact on the industry will need to be considered when choosing the location. They have implications to consider and the regulations can affect the relationship the company has with the community and the cost implications.

Host Community – It is necessary to consider the interest the host community has in having the plant in their domain.

Saturday, 17 October 2015

Chit Chat: Talent Management Trends 2016

  • Be prepared to pay for the talents, giving more to those who are proving their worth.
  • Customising programs to suit the talent is proving to be attractive to the talent. Providing trainee programs are an excellent way of tailoring the talent to meet the needs of the market.
  • Defining talent is not an easy task and one of the reasons for this is that the definition of talent is narrow. Increasing the diversity of talent groups is a trend that is expected to increase during 2016.
  • Following gut feelings is not a method that is trusted when looking for a talent. Organisations want to find people that have proven talent, but they also look for talent that is intelligent and that is able to learn quickly.
  • Gamification can be used to test social capabilities and cognitive skills. Gamification is being used to allow candidates to experience life within the organisation via simulation.  It is expected to see and use gamification more often in training as it is proving to be highly effective.
  • HR analytics are so important and talent analytics are vital for 2016. Big data analysis is now achievable for all companies’ thanks to new technologies and cloud computing.
  • Increasing talent pools are a trend that is replacing 1:1 succession management. Understanding the talent that is available and being aware of where it can be found are essential, as the demands and the needs of the organisations will continue to change.
  • It is expected to see a move towards real time feedback, and it is achievable thanks to new technology. Organisations need to provide more objective feedback to the talent and help people to become more successful.
  • Specific skill training is preferred over general skill training. Providing training that is needed in the real setting rather than covering every topic possible.
  • Talent wants transparency but this is a difficult area. It’s one thing to let the high flyers know that they are valued and considered to have a high potential within the organisation but on the other side, it is easy to demotivate and disengage the people that aren’t regarded as talented. Despite this uncomfortable situation the trend is supporting transparency so the people within the organisation understand the expectations.

Friday, 16 October 2015

What are the Common Sub-Processes Comprised in a Performance - Part One

A performance management processes involve several sub processes. We’ll be taking a look at the most common sub processes over the next two days.

Strategic Planning
When strategic planning, the aim is to create approaches that will reach a clearly defined business objective.  The strategy needs to define the objective and include descriptions of the approaches that the company will need to perform in order to reach the objective. Strategic planning has a long term view and all of the activities are clearly described, making it different to tactical planning.

The strategic plan will define the purpose of the company and how it will set them apart from the competition.  It also comprises of details regarding the markets, it will be in and the position the company will take in the market. There also needs to be information relating to how the company will adapt to changes in the markets, how to mitigate threats and jump on opportunities that will benefit the company. Finally, there will also be defined targets, or milestones, as they progress towards the defined objectives.

Tactical Planning
Tactical planning defines the tactics and how resources will be allocated in order to meet targets, the objectives and the strategies described in the strategic planning. The tactics will be created in the tactical planning along with initiatives that will need to be sustained and also improve the operations.  The initiatives will be evaluated and prioritised so it will be clear to see how they will ensure the company is able to achieve the objectives and set out targets. During the evaluation, the activities will be defined, and changed, ceased or continue based on the evaluation results.

The tactical plan includes a road map in order to identify the destinations, checkpoints and a clear course of action. The resources required are also included along with alternative plans to deal with challenges or opportunities that might occur along the journey.

Financial Planning
Financial targets and plans are established during the financial planning. The targets are describing the financial results that are expected from the agreed upon tactics that are being used to meet performance targets and the business objectives.

Financial planning includes target schedules, economic and basic assumptions, the timings, guidelines, the creation of the operating expense budgets and capital and a consolidation of the plans for all the major activities, such as marketing and production. Final ly the plan also includes the review and analysis and the management and the board will need to approve of the plan. 

Thursday, 15 October 2015

What is Performance Management?

Performance management concerns how plans are executed and how the original plan can be enhanced. One problem businesses have is keeping up. They create the perfect plan that fits with their budgets; only to find that things have changed in the world by the time comes to execute the plan. A good example of this is when businesses needed to work to new budgets and come up with new plans as a result of the 2008 global recession.

Market boundaries change all the time. They are defined by the supply chain, the informed consumers, regulations, and reduced cycle times and so on. Therefore, managers need to be able to deal with challenges and change quickly.  Techniques that have been used in the past are no longer reliable, and the best practice companies are taking on these challenges and are prepared and ready to change the way of the plan and manage.

Companies have to be more responsive than ever before, be agile and prepared to accept best practice demands. Performance management processes are being rethought, with manager seeking tools to help them cope with the challenges. They need to adapt and be prepared to make very fast changes to the plans in order to keep up.

Wednesday, 14 October 2015

What are the Three Production Planning Strategies?

The three production planning strategies are as follows:
  1. Chase strategy
  2. Stable workforce
  3. Level strategy
The chase strategy is when the production rate is matched to the order rate by either hiring or employee’s redundancy according to order rate variability. For this strategy to be successful, it is necessary to have a pool of trained individuals that can be called upon and hired as and when the rate of orders increases. There are often problems with employee motivation as the staff’s fear of redundancy when the order rate reduces.

Stable workforce consists of variable work hours. The output is varied as the working hours are organised using the flexible work rotas or overtime.  This strategy allows the matching of the orders to the production quantities.  Many of the problems with costs and the workforce can be avoided using this method as there is no need to deal with the hiring and firing that is involved with the chase strategy.

The level strategy maintains a consistent workforce level work at a constant output rate. The fluctuating inventory level, lost sales and order backlog is used absorb any shortages and surpluses. The workforce benefits by having regular hours, but the payoff may be a reduced level of customer service or increased inventory costs or inventory becoming obsolete.

When one of these variables is used in order to cope with the fluctuation in demand, it is a pure strategy. When two or three are combined it is called a mixed strategy, which is more commonly used. 

Tuesday, 13 October 2015

Why is Yield Management Important for Levelling Demand?

Demand fluctuation may be caused by the seasons, other times by trends and so on. It may be difficult to forecast demand accurately in many industries as often time capacity doesn’t meet the forecast demand as expected. Yield management is a way of helping to level the demand, allowing businesses the opportunity to sell their service or products for the right price to the right customers at the time. 

Hotels provide a good example as to how yield management may become an effective strategy. There are times when hotel guests may decide to cut their visit short, or cancel at the last minute. They have decisions, rules in place that will provide opening and closing rate classes that correlate to the expected demand and the supply availability. This can be a complicated process by one common method which is to forecast the demand and create the rates to be charged if the demand forecast is above or below the control limits.

Yield management is most useful from an operational perspective when:
  1. Demand is able to be segmented by the customers
  2. Variable costs are low and the fixed costs are high
  3. Inventory stock is perishable
  4. It’s possible to sell the products in advance
  5. There is a high variability of demand

Monday, 12 October 2015

What is Yield Management?

Yield management has been existed around for a long time as a limited customer serving capacity does. However, it wasn’t introduced as a scientific application until the mid-1980s, when American Airlines started using a computerised reservation system. In the ‘real world’, yield management can be seen in a variety of examples such as when someone pays less for the exact same train journey as the person sitting next to them, or when a hotel costs less when booking last minute compared with booking well in advance. That’s because yield management is about getting the right type of capacity to the right customers at the right price so that the maximum yield or revenue can be achieved.

Yield management results in an intense competition for businesses. Customers are now able to use the systems, such as the computerised reservation system by American Airlines. The system allowed customers to get an hour-by-hour results of competing routes to find the cheapest fares. A victim of the system was Peoples’ Express, a cheaper airline that was unable to beat the prices that were being located using the yield management system. 

Saturday, 10 October 2015

Chit Chat: Global Consumer Trends in 2015

Consumers continue to make buying choices based on their heart, looking to help the local communities and caring about the impact their decisions have on the world. Millennials care about the global economy and they tend to have a ‘can-do’ attitude. Malls are changing to meet these changes in consumer attitudes, focusing on becoming community hubs, but what other trends have taken off in 2015?

  • Community mode malls. Malls and shopping centres that are focus on the community. There is a rise in smaller and more central located shopping centres. The shoppers in emerging markets are also being attracted to malls as they are inspirational and have an international appeal.
  • Consumers want convenience. They are pushed for time due to busy lifestyles. This is reflected in their behaviours, they like to be able to buy 24/7 across multiple channels and expect to receive excellent customer service over all channels. They are performing top up shops rather than single large shops and they want the best experience within their limited time frames.
  • Digital health. Mobile fitness is big business, consumers are enjoying monitoring their own fitness and using technology to boost and benefit their fitness and general health.
  • Influences have power. Consumers are using celebrities as their lifestyle mentors, but it’s not only A-listers that have this power. Vloggers and bloggers are being used as mentors and as sources of information and consumers themselves are also becoming influencers among their circles.
  • International shopping. Consumers love that the world can be brought to them; they enjoy buying from international retailers and use the overseas options as ways to find better products and better deals. Social media is powerful in finding and keeping consumers from overseas.
  • Sharing lifestyles. Consumers are sharing their buying tips and now they have more freedom concerning buying choices.
  • Millennial trends. Millennials care about their privacy and want to do things their way. They are socially conscious and are not as loyal to brands as other generations have been. They listen to vloggers and are shopping savvy.
  • My privacy. Privacy is expected and brands that are privacy friendly are proving to be popular.
  • Progressive green consumption. Consumers care about the environment and they want to go green, using green products and brands that are green i n their actions. Female empowerment is also being used as a consumer driver.
  • Virtual and Reality. Consumers like to combine virtual shopping with real life shopping, with seamless experiences. Online and offline worlds have become closely connected and consumers love having both.

Friday, 9 October 2015

What are the Issues with Facility Location? – Part One

New and existing businesses all have to deal with the problem of facility location as it has a big impact on the success of the supply chain and the business as a whole. When deciding on the facility location it is necessary to consider the following factors:

Proximity to the customers – If customers want the goods as quickly as possible, it is important to have the facilities close to the end customers to avoid slow delivery times.

Business climates – A good business climate includes one with other businesses of a similar size, companies in the same industry, other foreign companies being close by in the case of international locations. The governments must be willing to help businesses locating with subsidies, tax abatements and other methods of support.

Total costs – The aim is to choose a location with the lowest total costs and hidden costs. The costs include:
  • Inbound and outbound costs
  • Labour
  • Energy
  • Taxes
  • Land
  • Construction
Infrastructures – it is important that the business needs to have adequate transportation options including road, rail, air and sea. Additionally, it also needs good energy and telecommunication options.

Thursday, 8 October 2015

What are the Decisions Relating to Logistics

When designing a supply chain for manufactured goods it is necessary to determine how to move the goods to the customers. When the goods are consumer products the supply chain involved moving the product from the manufacturers to the warehouse and then from the warehouse to the retail store. This means a journey of thousands of miles and trips spanning almost half way around the world. The costs need to be controlled and therefore the supply chain has to be as efficient as possible to lower the costs. Logistics is the movement of goods through supply chains, and it can involve large distances and a multitude of transportation modes. There are additional activities too, everything from scheduling to managing the inventory levels.

There are multiple decisions that need to be made in logistics. Items need to be obtained, produced and distributed in the right quantities in the right time frame. Locations need to be decided along with routes and modes of transport.  There are trade-offs that relate to the cost of the transportation, the speed and the flexibility of the supply chain to react to changes in demand.  One of the decisions involved is the choice of transportation from the five most common methods:

  1. Highways – Highways are flexible and most products use the highway for at least some of the journey.
  2. Rail – A low cost option that can be variable. Some parts of the world may have limited rail infrastructures while others are highly developed.
  3. Air – A fast option but may be expensive.
  4. Water – Low cost and high capacity but water are a slow option making it more suited for bulk items.
  5. Pipelines – Pipelines are specialised options for gases, solid slurries and gasses. Initially expensive to build but once built the costs are low.

Wednesday, 7 October 2015

What are the 3 Major Components of a Queuing System in the Service Process? Part 3

3) The Condition of the Customer Exiting the System

When a customer has been served there are two possible outcomes:
  1. Customers can return to the source population and begin competing for the service again
  2. There is a minimal chance of the service being required by the customers
An example of the first outcome is seen in machine repairs. The machine has a routine service but then it returns to be serviced if it ever breaks down or when it requires another service.

The second example is when a machined has been modified or improved and therefore is not likely to need another service in the near future.

Tuesday, 6 October 2015

What are the 3 Major Components of a Queuing System in the Service Process? Part 2

2) The Servicing System

The flow of the items that need to be serviced can be a single line, multiple lines or a mixture of both. The choice of which format to choose depends on the volume of the customers served and any restrictions that are imposed by the order in the way the service is performed.

Single Channels with a single phase
The simplest waiting line structure is the single channel. Easy formulas can be used to solve problems for the standard distribution patterns of the arrival and the service. If there are no standard patterns the problems can be solved using computer simulation. 

Single Multiphase Channel
A good example of a service that has multiple actions is a car wash. There are different steps including the wetting and washing of the car, the rinsing and drying, vacuuming and the parking. There is a uniform sequence involved.  One of the major factors of the multiphase channel is the build-up of the items that are permitted in front of each service, and this requires different waiting lines.

Multichannel Single Phase
Banks have department stores use the multichannel single phase structure. There are multiple checkouts and windows and this format has problems caused by the uneven service provided, as each customer will have different speeds and flows along the lines. Customers can sometimes be served before ones that arrived earlier and other customers may shift across the lines. This structure calls for strict controls of the lines to maintain the order and also to ensure the customers are directed to servers that are available. Sometimes a number system is provided based on the arrival time in order to avoid problems.

Multichannel – Multiphase
This is a structure very similar to the multichannel single phase, but it has one or more services that are performed in sequence. An example of this is found in hospitals where the patients follow a sequence involving arrival, form filling, directing to a room and so on. Often more than one patient can be processed at a time.

Mixed Structures
There are two subcategories in the mixed structure:
  • Multiple single channel structures – Lines can merge into one for single phase services
  • Alternative path structures – Two structures with different direction flow requirements.

Monday, 5 October 2015

What are the 3 Major Components of a Queuing System in the Service Process? Part 1

1) The source Population and how customers arrive at the system

The queuing system is made up of three components:

  • The source Population and how customers arrive at the system
  • The servicing system
  • Condition of the exiting customers
We’ll be taking a look at each of these components over the next few days.

Customer arrivals at the system come from an infinite or finite population and it is important to recognise the two and how they are different as they have different premises that need different equations for the solution. The infinite population is one that is big enough so the addition or subtraction to the population. A finite population is a customer pool of limited size. The customers arrive, line up and use the service.

The waiting system is defined by the way the customers or units are arranged for the service. Formulas for the waiting line need to have an arrival rate, which is the number of units in the period. Constant arrival distribution is periodic and they have the same waiting time between each successive arrival. Variable arrival distributions are much more common. When the arrivals are observed at a service facility they need to be examined in the following ways:

  • Analysing the time between the successive arrivals – this is so we can see if the times of arrival follow any kind of statistical distribution
  • Setting a time length to see how many arrivals will arrive at the system within that length of time.

Saturday, 3 October 2015

Chit Chat: Telecom Trends 2015

Digitisation has had a massive impact in telecommunications and this has called for the wired and the wireless carriers to take big steps in digital technology and applications. The mass adoption of these continues to play a vital part in the strategic and operational decisions of the telecommunications operators. This is a trend that is determining how the companies work to monetise their investments, boost capabilities, improve customer experiences, rationalise their service and products and increase their assets and business model.

Telecommunications operations are seeing varying levels of success and the revenues of global operators are at a bit of a standstill at the moment as expenditures continue to increase. However, the OTT players such as Netflix and Spotify are becoming more popular while they piggyback for free on other telecom systems. This means that traditional operators have a difficult task in competing. The global operators have adopted aggressive digitization strategies in order to compete and these companies have generally performed better than those opting for a more conservative route.

Telecom companies need to carefully decide on which products and services to offer. The benefits of digitisation at the core of the business include:
  • Improved customer services
  • Cost savings
  • Happier customers
  • Improved revenue streams
All these benefits are gained by improving the digital experiences, automating services and ensuring the financial transactions which are more efficient and straight forward.  The telecom providers need to make sure they offer the highest quality communications services that remains on the top. The desktop and mobile platforms need to be fresh and include state of the art technology while remaining customer friendly. It is also necessary to make customers feel safe and to sell their knowledge in digital security and ID authentication while monetising the data that moves through their networks.

Investment in 4G and 5G systems is also important so that they are able to offer data heavy content to their customers. The funding for these investments can be achieved by optimising the cost of operations and becoming more efficient by using management technologies.

Friday, 2 October 2015

How to Classify Service Processes

Services cannot be stored in an inventory, unlike manufacturing. Services need to be able to meet demand as and when required.  Service providers need to understand and know their capacity. A capacity that is too high can be too costly to maintain, whereas a capacity that is too low can result in a loss of customers.

Structuring the service is achieved using the system design matrix. At the top of the matrix is the amount of customer contact with the server and the buffered core that is physically separate from the customer. There is also a permeable system; this is when the customer can penetrate the service via phone lines or in face to face operations. 

The reactive system is at the top of the matrix system too, which is permeable and reactive to the requirements of the customers.The left side of the matrix is where you’ll find the logical marketing proposition. This is where the greater amount of contact is found along with the greater amount of opportunities to sell. The right side of the matrix is where you see the impact on the production efficiency when a customer has more influence on the operations. The matrix includes entries that show how the service can be delivered. It could be with minimal customer contact using emails or with face to face contact and everything in between.

The efficiency is decreased with the customer has more contact but this is offset as the more contact provides greater sales opportunities to help companies sell more products to the customer. Low contact with the customers results in a more efficient system but fewer opportunities to sell any additional products.

Thursday, 1 October 2015

What are the Characteristics of Service Processes and Understand How They Differ from Manufacturing Processes?

Service providers are normally classified by the customers and the services that are provided, for example:
  • Health services
  • Transportation services
  • Financial services
The classification isn’t very useful when it comes to describing the processes. This is how manufacturing differs as the classification of the production activities do suggest what the processes are, for example the assembly lines or continuous processes. Services could be described in similar terms but they need to include a description of the customer who is also involved in the production system.

Customer contact is when the customer is physically present in the system and the service is the work process that is involved in giving the service to the customer. The amount of contact with the customer can be defined by the percentage of time that the customer is in the system relative to the amount of time it takes to perform the customer service.

The greater the percentage of the contact time with the customer within the service system, the greater amount of interaction between the two takes place in the production process. Therefore, service systems with a greater amount of customer contact are harder to control and more difficult to rationalise when compared with a low level of customer contact. The high level of customer contact has an effect on the time demands, the quality and nature of the service simply because the customer is involved.