Operation Management Assignment | Homework Help Websites

I have attached the question also beneath in the attachment tab along with a handout given by the professor to just read

MGMT 707 OPERATIONS MANAGEMENT

LESSON NOTES

TECHNOLOGY IN SERVICES

TECHNOLOGY IN OPERATIONS MANAGEMENT

Technology is such a hot topic.  Everyone is benchmarking everyone else, in any industry, to try and get ahead of the competition.  There isn’t a company in the world who feels that the use of technology will give them a competitive advantage.

So to do technology justice, I would like to take it in 3 parts:

#1 the choice of technology itself.  Technology is a tool, not an end in itself.  It is important to maintain compatibility between the technology employed and the rest of the organization.  Technology places a major need on an organization for continuous training.  So it is the performance of technology and not just the technology.  In pure business terms, it is the traditional Cost/Benefit Analysis.

A story;  when consulting at a major retail chain here in New England, I was asked to attend a presentation by Microsoft on a new operation system and, bundled with it, a whole new set of application software.  The company had over 4,000 pc’s in over 200 locations.  Plus they had a computer support center with multiple main frames with an IT staff of over 100 people.  Microsoft came in and made a wonderful, well paced, Power Point presentation.  They explained in glowing terms just how great this upgrade was going to be.  Why for just over $3 million dollars you would be on the cutting edge of technology in your industry.  The vice president told them thanks and don’t call us we will call you.  Microsoft couldn’t believe what he said.  They had already authorized the systems folks to come in and start the installation and training for next month.  The VP told them that for that amount of money, his staff was going to do a cost/benefit analysis.

After a month of meeting almost everyday with lots of input from all of the major user groups in the firm plus outside companies who had bought the upgrade, the answer was a resounding NO THANKS.  We could only come up with a payback of about $500,000 per year.  Microsoft tried many times to change his decision, even bringing in another consulting firm, at their expense, to review the cost/benefit analysis.  They came up with a slightly lower number.  Three years later Microsoft lowered the cost by over half and added new features to the upgrade.  The firm bought it but only after doing another Cost/Benefit analysis.

#2 benchmarking or what are the trends in Services.  Benchmarking is the study of other companies to see how they are performing particular processes.  And you don’t look at any company; you look at those companies who have the “Best Practices” for those processes you wanted to study.  When women started working outside of the home, there was a tremendous need to provide a way for these women to do their shopping.  They no longer had the time to go from store to store when the kids were in school.  The mail order catalogs came into being, by the thousands.  But having a whole bank of telephone order takers proved to be a difficult undertaking.  Why, many errors in the chain from the initial call to the final shipping of the goods.  The mail order houses went to the banking industry to learn how they could process so many transactions of many different types at very low error rates.  When was the last time you had a problem with your checking account due to a bank error?  It has been over 20 years for my family.  That is benchmarking best practices.

So let’s look at the trends in the service businesses.  The customer wants and desires to be a co-producer in the process.  How can we do this?  Well, there is the speed pass.  It is on toll roads, at gas stations.  Why right here at Lasell College, the students make their own waffles.  Have you heard of the Fire and Ice restaurants?  They let you put together your meal, sauces and all and then they cook it to order.  Walk in to one on Monday nights and you can’t get into the place because it is $10 with a college ID as opposed to $16.95 on a regular night.  Boston University, after hearing complaints about their food, now has their own mini Fire and Ice in a student dining hall.  Will Lasell and other colleges follow?  If you run a restaurant the best place for your wait staff is to have them on the dining room floor not back in the kitchen.  You can’t sell that second glass of wine if you are not on the floor.  So think of the breakthrough that touch screens brought to the restaurants.  How many touch screens to you now see?  The ATM at my bank is touch screen.  So is the digital photo copier at CVS.  The move is to let the customer be a true co-producer.

With the onset of the internet your business is non-location dependent and non-time dependent.  This is also true to some extent for the mail order business.  That means you can put our operations center almost anywhere.  Did you know that several of the drive-in windows at Dunkin Donuts, Wendy’s, etc are trying a new service in California?  Instead of having the staff inside the facility handle the order from the kiosk in the drive way, when you press the button, that call is going to Nashua, NH.  The operator takes your call and sends it to the screen in the facility.  No longer is the local staff walking around with walkie talkies strapped to their waist and an earplug and mouth piece.  They just process what is on the screen.  The error rate was over 5% dropped in less than a week to less than 1%.  The labor savings more than covered the cost.  So do you think that is going to spread?  Just watch it.

What can Brown do for you today?  That is an ad aimed at businesses for UPS.  In the not to distance pass, when you shipped by UPS, the driver would come in and have to process all of the information on each and every package, put a tracking label on each box and give you a copy so you can track it.  Now, UPS and their competition provide a complete shipping station for almost all of their customers (size is important for pay back purposes).  They integrate their system with your system.  So when your shipping clerk prepares your label, all of the UPS information is also on the label.  There is an electronic handshake at pickup.  The driver gets a download to his on-board devise; the UPS system sends an e-message to UPS telling that it has been picked up and goes into their tracking system.  At the same time, the same message goes to your system so you can track it.  UPS is in and out of your facility in minutes instead of hours.  Just guess at the number of pickups UPS can do with one drive.  The initial study shows more than a doubling.  It was a great competitive advantage until the others all caught up.

There are issues:          #1 ethics come into play.  As mentioned above, initially UPS only allowed certain size companies to participate in this “you are the shipper” self checking mode.  Their justification was the payback.  This left out many small companies.  So the big get bigger is one of the issues.

#2 Cost of entry into a lot of this move to technology becomes a barrier to entry.  If you don’t have touch screens, you can’t keep your wait staff on the floor getting that extra little sale.  Even with the speed pass, customers in a hurry just want to gas up and go.  Taking your credit card out of your wallet, swiping it through the card reader then gassing up and waiting for your receipt is too long for the hurry, hurry crowd who think they have better things to do.

#3 Training of your staff and training of your customer is expensive and not enjoyed by all.  I just hate it when Yahoo changes their screens, “to serve you better”.  I know where and what to click on, now I have to unlearn and relearn something.  Blackboard does it all the time.  I teach on-line at Northeastern.  Their discussion forum is very user friendly.  Blackboard upgraded(??), Northeastern didn’t because of all of the students who are familiar with the current system.  It may be user friendly after I learn it but it has slowed me down.

#4 Scalable.  Can your system grow as the number of users increases?  What is the cost to do that?  Lasell has one online systems support person who has other job duties.  What happens when lots of folks want to take this MSM program?  Lasell will have to add more support personnel.

#3 E-Services: (does webMD work?)

The Evolution of Self-Service

The table above shows what has happened in a relatively short time period.  I am willing to bet that if this class listed their experiences this list would be at least 3 times as long.

There is a whole bunch of questions we should focus on before we decide to look at technology.

• Is the customer requirement predictable?  Can we handle all of the possible combination of customer requirements solely with technology?  How many of you have been frustrated by being routed to the FAQ (frequently asked questions) screen?
• How can the quality of the encounter of the system be controlled?
• When the system turn it over to a person?  Think those wonderful automated call centers.  push 1 if you want to renew a prescription, push 2 if you have a question about your bill, push 3 if you want a referral, etc. etc. etc.
• What are the limits to self-service?  Will Fire and Ice let you actually cook the stuff?

Things for you to think about and bring up in the discussion forums:

• Have you ever had a memorable experience from a purely on-line experience?
• How does an organization “recover” when an e-transaction goes bad?