Instructor Resource

Wisner, Operations Management

SAGE Publishing, 2017

Case Notes

Chapter 10: Managing Customer and Work Flows

Naturally Yours

Case Summary

Naturally Yoursis a health store that supplied natural and organic ingredients which customers used as nutritional supplements, etc. As the national trend in healthy living grew, customers requested or inquired about alternatives in food and cosmetics.Currently, Naturally Yours has all of its operations in a large 30,000 sq. ft. building, after moving into a vacant department store five years earlier. Naturally Yours is projecting that the next competitive advantage opportunity for them will be on delivering excellent service throughout the shopping experience including product offerings, consultations, and convenience.However, currently customers often complain about long lines in general, the long lines as a result of customers asking questions at the checkout registers, and the overall waiting time in line.They also complain about not having access to knowledgeable staff for consultation before they enter the checkout line. Naturally Yours needs to address these customer concerns. What actions can they take?

Case Analysis

This case deals primarily with the concept of managing customer queues. However, this case also addresses demand variability and service capacity utilization, as well as service delivery system design.Students should start with the last concept, service delivery system design, and discuss the value of a service blueprint to identify customer contact points.This information can be utilized when discussing the other major chapter concepts.The major issue in the case is waiting lines or at least the customers’ perception of waiting lines.Students should discuss the various queueing methods or techniques such as using virtual queues, keeping customers occupied, keeping customers informed, grouping customers together, etc.As the students progress through their analysis of the queueing systems, they should discuss what must be done to avoid customers reneging, balking, or jockeying.To complement or supplement their analysis of queueing, students should examine aspects of the demand management techniques in services to determine if demand sorting, pricing policies and promotions, etc. can help alleviate the waiting time or the perception of long waiting lines.

Sample Answers to Case Questions

  1. Based on the information provided in the case, how would you describe the structure of the wait lines?

Arrival pattern demand is infinite and is non homogeneous (customers interested in food, cosmetics, nutrition, consulting) because the arrival of new customers does not affect the potential arrival of additional customers. The priority rule for customer service is first come first served (FCFS) at all facilities in the store. Although not specifically addressed in the case, students should assume that customers are impatient and balk at long lines (especially in cosmetics and nutrition departments) and probably renege if the lines are too long or if they experience customers seeking consultation in the transaction line. This structure puts significant pressure on Naturally Yours as a service provider.

  1. What wait line calculations should be completed to determine the wait line performance at Naturally Yours. How will these calculations help Naturally Yours’ improvement efforts?

Naturally Yoursshould first calculate the probability distributions including arrival and service time. Calculating these probabilities helps in planning for random arrivals of customers and variations in service. Calculating these distributions aids in evaluation of the trade off or balancing of costs of service and benefit of service to the customer. The arrival distribution calculation addresses the probability of a number of arrivals (n) in a designated time period (T). Service Time distribution address the probability that service time will be no more than T (time period designated by customer feedback, competitor marks, or industry standards). Wait line operation characteristics that measure wait line system performance include:

  • Line length – number of customers in line. Long lines general indicate poor customer service, inefficient service, or inadequate capacity.
  • Number of customers in the system includes the number of customers in line and being served.
  • Waiting time in line is the time waiting for service to start. Long waits are associated with poor service.
  • Total time in system includes time entering system and exiting and can indicate problems with customers (asking questions that stop the checkout process, inefficiencies, or capacity issues).
  • Service facility utilization is represented by the percentage of time servers are busy and is used to balance cost to serve and acceptable levels of service.

After completing the performance calculations for Naturally Yours’wait line systems the next step would be to conduct a service blueprint and work flow analysis that examines who is doing consulting work, product information sharing, providing directions to requested products, etc. An examination of employees’ activities and the value it adds to the shopping experience can be determined and then work on improvement ideas to improve value for the customers and productivity for Naturally Yours.

3.Describe Naturally Yours’ service system (lines and facilities) and then make recommendations for possible changes.

The cosmetic and nutrition departments have single line arrangements with a single channel and single phase. The grocery department checkouts are the main wait line facilities and use a multiple channel and single phase system as demand is large enough to have the same service provided at more than one facility. Because there are customers who seek up to four different purposes (product purchase, consultation, health shakes, and product support) Naturally Yours should consider a multiple channel and multiple phase for customers to be served at one facility (i.e. consulting) and then move to another facility to complete a different but required service (i.e. check out). Naturally Yoursmay also consider mixed arrangements like a consulting kiosk or floating consultant who can answer questions in the aisles before customers enter the checkout lines.

4.What other recommendations would you make to Naturally Yours to improve customer satisfaction?

  • Students can start the discussion by categorizing recommendations into the First and Second Law of Service.
  • Training / cross training – Naturally Yours has diverse services and building a more knowledgeable workforce in all the areas will meet expectations of being an expert in natural and organic food, cosmetic, nutrition, and wellness.
  • Self-service – providing information kiosks with a database (ingredient definitions, recipes, etc.) would allow customers to seek, find, and learn important and personal information for themselves.
  • Employee scheduling (peak times for general traffic, consultations, etc.) – this is a capacity and service area to improve.
  • Mobile apps – apps can be developed that allow customers to order and pay for food, cosmetics, and nutritional items and then pick them up at a special pick up station.
  • Establish a donation club or a “Go Green” card that would offer at a set amount spent to make a donation to a local farming organization or to food banks. Customers who value Naturally Yours will find value in a program that gives back to a worthy cause.
  • Research new product/service combinations including offering prepared meals. This would allow for the growth in sampling and creating even more options and products in the prepared meal category. If this is viable the shake station/area could add an actual place to eat in the store.
  • If service starts well it is easier and more cost efficient to keep customers satisfied
  1. Keep customers occupied – monitors with health and product information could be placed throughout the store and close to checkout facilities
  2. Keep customers informed – use e-mail, text messaging, and direct mail to notify customers of new products, product usage, and sales promotions
  3. Design a fair wait line system – changing structures could improve perceptions of fairness and improved time in line would improve satisfaction.