Leitax, a young digital camera manufacturer selling its cameras mainly through retailers, experienced poor matching of inventory availability with demand for new and existing products in 2002. Describes the implementation and details of a consensus forecasting approach, a crucial part of a demand and supply planning redesign that was introduced to address the problem. The forecasting approach is a cross-functional one involving the sales, operations, and finance functions. Describes the results of the introduction, including planning challenges the company continued to face.
The newly appointed director of the project dedicated to reducing product development time for AT&T's Transmission Systems Business Unit (TSBU) is trying to decide how best to sustain the momentum of its Achieving Process Excellence (APEX) teams. During the past three years, APEX teams helped reduce TSBU's product interval 50%--an accomplishment that contributed to TSBU's receiving the Malcolm Baldrige National Quality Award. Now motivation and expectations for continued improvement are high. The case describes the launching of APEX, its evolution, and the current challenges facing the product development organization. Details support a discussion of the elements required to launch and sustain an improvement program, including metrics, goal setting, management's role, and methodological approaches for problem solving.
Supernova is the name given to a new way to manage client relationships that originated in the Merrill Lynch Indianapolis offices. During a trial period, Supernova generated very good results among financial advisers and their customers, but challenged the traditional ways in which financial advisers were rewarded and the nature of the relationship with their clients. The case protagonist needs to decide whether to recommend a national rollout for Supernova.
In an attempt to reduce its ecological footprint, Interface Americas, a leading manufacturer of commercial carpet tile, has launched the Evergreen Services Agreement (ESA)--a lease agreement that provides would-be carpet purchasers with comprehensive floor-covering services (color, texture, warmth, beauty, acoustics, and safety). Under ESA, Interface retains ownership of all carpet material, thereby ensuring proper recycling. Despite active media attention and a lot of interested calls from potential buyers, Interface is having difficulty selling ESA. CEO Dan Hendrix is at a crossroad and must decide whether to continue support for ESA or to focus on other initiatives. This case, grounded in a failed negotiation with the University of Texas, Houston, details a discussion of the difficulties of structuring a long-term lease agreement, defining a new service value proposition for the customer, and developing a sustainable business model for product-related services.
The number of connecting passengers through Southwest Airlines' Baltimore station has grown 100% CAGR since 1997. Originally designed as a point-to-point network, this load of connecting passengers has been stressing Baltimore ground operations, resulting in an erosion of service quality and difficulties in achieving fast plane turnarounds--one of the key elements of Southwest's low-cost strategy. This case presents comparative data to illuminate the key elements of Southwest's operating strategy and provides detailed information about the activities and information flows required to turn around a plane, allowing for a meaningful analysis of the process--e.g., resource utilization, capacity, bottlenecks, and coordination mechanisms. A rewritten version of an earlier case.
Explores how service organizations respond to changes in work pressure, why they respond the way they do, and what managers can do about it. The system dynamics method captures the organizational and behavioral components of the social systems that produce and consume services, as well as the physical characteristics of the service delivery system. This method also supports the assessment of long-term consequences of complex interactions among responses to work pressure. The major recurring problems observed in the service industry--erosion of service quality, high turnover, and low profitability--can be explained by the organization's response to changes in work pressure. Also suggests ways to identify the structural characteristics that determine the preferred response to work pressure. By providing a specific link between characteristics of service settings and dysfunctional outcomes, the model assists managers in the design of high-leverage policies to eliminate undesired behaviors.