Chapter 8
Timeliness
Chapter Overview
Chapter 8 is devoted to the topic of timeliness. Response time, in any aspect of business, translates directly into money. Shorter times result in quicker financial returns, increasing ROA and profitability. In addition, many quality attributes associated with service are time-based. Reducing the time required for resources to process products or customers increases capacity and generates more revenue. Reduce time means reduced costs for the business and increased value for the B2B and B2C customer.
|
Chapter Resources |
|
Esources |
|
| Esource 8.1 | Response time for Internet-based businesses is just as important as a quick response time for any other business. When the competition is just a click away, many customers are not willing to wait more than a few seconds for a download. Unfortunately, download times can be affected by Internet traffic world wide. The Internet Traffic Report monitors Internet traffic worldwide and provides up-to-date data. Check out the 24-hour and 7-day graphs to view the patterns. |
| Esource 8.2 | Consumers often view response time as the most important aspect of customer service. An easy way to view how important this is is to view the customer evaluations of a large business on Ebay. Check out the feedback of an Ebay seller to find out how important the customer service, and particularly quick response, is to buyers. If you're unfamiliar, go to Ebay, select any category of interest, and then select an item of interest. Click on the number in parentheses next to the seller's name. That number is the quantity of buyer feedback messages that have been submitted. It links directly to the actual feedback messages submitted by sellers. For an alternative perspective, click on a seller feedback number to view the type of feedback submitted by buyers. Once again, response time is high on their list of priorities. |
| Esource 8.3 | When idled because of maintenance problems, expensive resources immediately stop generating a financial return. Their costs continue, however. The airlines provide an excellent example of companies with huge investments in equipment that needs to remain productive. In the past few years General Electric has invested much effort into the development of services to minimize these impacts. One branch, GE Aircraft Engines On Wing Support, provides aircraft engine service anywhere in the world. Check out the On Wing Support website and the description of their products and services. |
|
Reel Operations Video Clips |
|
| Reel Operations Video 8.1 | In United Airlines: Scheduling Complex Resources in a Service , we get a glimpse at not only how complex scheduling can be for resources that depend on each other, but also how important effective scheduling is for profitability. |
| Reel Operations Video 8.2 | Large projects are notoriously difficult to schedule. Those that depend on cooperation from weather conditions are even more likely to incur delays than most. In Complex Projects Almost Always Bring Surprises: The Alton Bridge Project, we get an overview of the successes and failures associated with a very complex project. |
|
Interactive Models |
|
| Interactive Model
8.1 |
Sequencing
Rules Interactive Model The Sequencing Rules Interactive Model provides four sequencing methods (FCFS, SPT, EDD, and Critical Ratio) for sequencing orders. The user selects the sequencing rule from the pull-down list and observes immediate feedback in the form of a Gantt Chart. |
| Interactive Model 8.2 | Waiting Line Interactive Model The Waiting Line Interactive Model provides a simulation of a waiting line environment. The waiting line system can be configured as a single or double phase system, with up to 4 servers in each phase. Varying the waiting line configuration, the arrival rate, and the service rate allows for experimentation with a variety of waiting line scenarios. |
|
Excel Tutors |
|
| Excel Tutor 8.1 | Excel Tutor 8.1 Using Excel Spreadsheets for Job Sequencing with EDD |
| Excel Tutor 8.2 | Excel Tutor 8.2 Using Excel Spreadsheets for Job Sequencing with SPT |
| Excel Tutor 8.3 | Excel Tutor 8.3 Using Excel Spreadsheets for Job Sequencing with Critical Ratio |
| Excel Tutor 8.4 | Excel Tutor 8.4 Using Excel Spreadsheets for Job Sequencing Using Slack per Remaining Operation |
| Excel Tutor 8.5 | Excel Tutor 8.5 Using Excel Spreadsheets for Determining Probabilities of Queue Arrivals per Time Period |
| Excel Tutor 8.6 | Excel Tutor 8.6 Using Excel Spreadsheets for CPM Calculations |
| Excel Tutor 8.7 | Excel Tutor 8.7 Using Excel Spreadsheets for CPM with Activity Time Uncertainty |
| Excel Tutor 8.8 | Excel Tutor 8.8 Using Excel Spreadsheets for Crashing Projects |
|
Supplementary Readings |
|
| Supplementary Reading 8.1 |
The ability to compress the "time to market" cycle has tremendous
impact on the return of financial investments. In
"Oxford Automotive: Go
Fast Strategy in Action", Automotive Design and Production,
the advantages of bringing a new automotive supplier's factory on line in a
short period of time is discussed.
|
| Supplementary Reading 8.2 |
No discussion of timeliness could fail to at least acknowledge the impact of just-in-time (JIT) management, which is covered extensively in Chapter 15. Read "Just-in-time Manufacturing is Working Overtime," Business Week, 11/8/99. Just-in-time (JIT) management is an approach used to eliminate waste, including inventory waste, process waste, wasted labor, and waste resulting from poor quality. It strives to reduce inventory levels to the leanest possible amounts and has seen great benefits, but there are risks as well. This article provides a view of the potential profitability downside of JIT which can result from time-related costs of implementing JIT. |
| Supplementary Reading 8.3 |
ROI: Using Technology to Buy Time (iSource, December 2001) describes how short delays in the development of new products in the semiconductor industry translate into millions of dollars in lost profit. |
|
OM Exploration |
|
Check it out: Internet Reference Sites |
|
| For businesses, time reduction virtually anywhere translates into profitability increases. The following web sites provide timeliness resources. | |
| Project Management Knowledge Base | The Project manager's Homepage |
| The Project Management Institute | Association for Project Management |
|
OM in Action |
|
| OM in Action 8.1 | KARLEE Company, Inc. was a Baldrige Award winner in
2000. Even though it is a manufacturer of telecommunications
equipment components, KARLEE has demonstrated outstanding customer service,
much of which is time related. Read the profile of KARLEE
Company. a. What aspects of KARLEE's quality is time related? b. Why would the time-related aspects of KARLEE's quality be important to its customers? |
| OM in Action 8.3 | Eagle Direct provides provides services that reduce the
amount of time required to obtain printed business materials. Examine the
offerings of Eagle
Direct Printing Solutions. a. How does Eagle Direct reduce the time required for obtaining printed materials? b. What role does technology play in Eagle Direct's time-reduction strategy? |
|
Online Business Tour |
|
| Online Business Tour 8.1 |
In many businesses, an important aspect of quality is speed. For services, the
faster the customer can get what they want, the better. Retailers must balance
speed and convenience with a desire to keep customers in the store so that they
may see and buy more products. Kohl's department stores
are organized in a unique way, in hopes of
adding value to the customer's experience.
a. Low price plays a major role in determining the value of Kohl's products, but the shopper's experience also contributes. Compare the organization of Kohl's to other department stores you have experienced. How does Kohl's differ? How does the difference affect timeliness? b. Do you think Kohl's design, which reduces the time a customer must spend in the store, reduces sales? Explain |
|
Letters from the Top |
|
| Letter from the Top 8.1 | Timeliness doesn't only mean speeding up the
response to customers. It also means that companies must be able to
quickly react to changing conditions in their markets and changing
environmental pressures. Read Nike CEO Philip H. Knight's 2001
letter to shareholders. a. What negative aspects of Nike's performance relate directly to its ability to respond quickly? b. Why, based on Knight's letter, has Nike had difficulty responding quickly to changing conditions? Does his plan to correct the situation make sense to you? What changes would you suggest? |
|
Putting It All Together: Virtual Case Study |
|
| Putting It all Together 8.1: |
FedEx, probably more than any other business, has come to mean delivery
speed. FedEx has gone beyond package delivery to B2B services as
well. Read about Fedex at About
Fedex and explore the variety of Fedex businesses at
The
Fedex Family. In Fedex
Keeps Delivering, Business Week, April 26, 2002, the increasingly
intense competition between FedEx and UPS is described. In The Man
Who's Repackaging UPS, Business Week, June 3, 2002, and in UPS
Is Constructively Dissatisfied a. How will the increasing importance of timeliness and convenience help FedEx in its endeavor to compete with UPS? How will the core competencies of each provide advantages in the B2C and B2B markets? b. Identify, in the typical business's cash-to-cash cycle, places where FedEx and UPS can make a contribution to the firm's profitability. Are there areas where UPS and FedEx differ in that regard? Which can contribute most? c. How does each CEO address the competition in the letters to shareholders? |
|
Additional Reading |
|
| Additional Reading 8.1 |
Quicker is better, usually. There are times however, particularly when changes are being made, that moving to quickly can be detrimental. In The Not So Quick Fix, Fast Company, July 2001, the process of changing Zerox after a CEO transition is described. |