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67 CASE American Vinyl Products To: From: Subject: Brad Hadley, President, American Vinyl Products (AVP) Bev Trudeau, Director of Purchasing American Performance Car, CA Customer Service at American Vinyl Products else. You have 90 days to provide us with an acceptable resolution to the current situation. As Tom Adamson, the vice president for operations at American Vinyl Products, put down the fax and looked at Brad, the president, Tom knew that things were not good. The phone system had been a persistent source of prob- Our two companies have basically had a good relationship this complaint was not an isolated event. He also knew that over the last two years. We have generally been pleased Brad had commissioned a local telecommunications com- lems for American Vinyl Products (AVP). Tom knew that with both the quality of the products as well as the price pany to do a study on AVP’s phone system. Their recom- offered. These features, while important, are not critical. mendation was that a new system be put in that offered What is critical to our future relations is customer service. more lines and more staff capacity. Brad thought that this This is one area where you have recently fallen down. Our might be the answer. Tom also knew that he would be staff has persistently experienced delays in getting through asked to come up with recommendations for impoving the to your staff by phone. When we do, we experience further current system. delays in getting answers. Our needs are few but simple.As Tom got up and left the office, he reviewed the We want to contact American Vinyl quickly. We want to information that he had recently gathered. AVP was a get through to a person quickly. We want to place orders, small manufacturer of vinyl and plastic products, includ- confirm status, and change requirements quickly. Three ing vinyl car products (e.g., decals and pin striping for days ago, Brad Allenby from our purchasing department cars), plastic after-market products (e.g., new brake spent 20 minutes waiting to get through. He had a cr problem that had to be resolved. He kept waiting. All the decals for the recreatic time, all he heard was how it was important that he remain to itical for cars designed to make the car look more sporty), and nal market (AVP sold name decals FourWinns in the boating marketing and to Bombardier on the line and that he would be answered in the order in in the ski-doo and sea-doo markets). Located in Charlotte, which he was received. He finally gave up and called Joan Michigan, this company had experienced a great deal of in your marketing department. Even then, it took 24 hours recent growth. Part of the reason for this growth could be before he got an answer. This is unacceptable. Unless you traced to the ecellent customer service that AVP gave its adequately resolve the problems with your phone system, customers we will take our business elsewhere. As you are aware, AVP sold primarily to three groups of customers. The your contract with American Performance Car is going first were the do-it-yourselfers (DIY). These typically to be up for review in six months. Your product is not so bought vinyl striping from a local retail or car accessory unique that we cannot quickly find an alternative supplier. store. As a rule, their purchases were very small yet they I am sorry for the angry tenor of this letter. However, this needed a great deal of information. Often, they would note reflects the frustration that we have experienced. It is call AVP asking for a catalog of products, information totally unacceptable that we cannot even get hold of anyone on how to use AVP’s products (or information on how to correct a problem with an AVP product), or information on where they could get AVP products. As a rule, DIYs 3 p.m. our time here in California. at American Vinyl after Your company must become more customer-oriented. Or Average Revenue per Call Average Time per Call (min.) ange in () 20 (min of 5, max of 35) 10 (min of 5, max of 20) 5 (min of 1, max of 10) Average Calls per Day Customer Type $5.00 per cal estimated) $40.00 200 DIYs Professional users 400 20 Large corporate accounts 89
Expert Answer
Executive Brief
- You have been asked to help Tom. What recommendations would you give him about how to improve the operation of the phone system?
The first recommendation that I would give Tom is to use process map and identify the activities involved in who is responsible each tasks, how much time it takes in each process to be completed, and what order does it needs to be done. The process map for American Vinyl Products customer service was a serial process. The process that American Vinyl Product customer service follows is when the call is received it will be received in the queue area, then it is picked up by a service representative, then the service representative tries to determine the type of customer and provide the information customer needed. Solving communication issues is the number one priority and it can be solved by many pursuing the Kaizen Events by improving the existing process. The first process that needs to be improved is identifying customers which by using automatic classifying system that identify the type of customer it would reduce the time the customer service needs to use to try to identify the type of customer that is calling them and as an example the DIYs customer would press 1, Professional users press 2, and Large corporate accounts press 3 to talk to the specialize representative for each type of customers.
The second process that could be improved is to change the shifts time of 1-2 representative to support the time differences that is one of the challenges in doing business with customer from different region, and in this case the American Performance Car who is located in California. The last process that could be improved is to break down the representatives needed for each type of customer and assigned them to be specifically responsible for those type of customer. DIYs average 4000 minutes of called per day, Professional users average 400 minutes of called per day, and Large corporate account average 100 minutes of called per day with 10 representatives each of them will receive 450 minutes’ worth of call each day assuming that they work 11 hours a day with 2 lunch hours making their total work time 9 hours.
I would assign two of the most experienced representatives to take calls from both Professional users and Large corporate accounts which will make their calls an average of 250 minutes, and 8 other representatives to take calls from DIYs users will be responsible for 500 minutes. I emphasize the importance of Professional users and Large corporate accounts because they’re the critical customer of American Vinyl Products and since their average revenue per call combined is 88 times more than DIY’s customer while using only ¼ of the representative required to answer their questions with timeliness.
The critical customer most important element is to receive excellent customer service which American Vinyl Products had not been up to standard. Customer service is also a core competency of the company since their growth could traced back to how American Vinyl Products have grown recently due to their excellent customer service.
- Tom has a recommendation for increasing the capacity of the phone system. Is this recommendation adequate to help address the problems facing AVP? Make sure that your answer is supported by the appropriate analysis.
The recommendation by Tom to increase the capacity of the phone system will also help the process since on average each representative have an average of 450 minutes of call time each day, and each day they have 9 hours of work time which amounts to 540 minutes. 450/540 = 83.33%, which shows that their process utilization rate is extremely high. I would recommend that the 2 most experienced representative are only assigned to answer questions and provide assistance to the Professional users and Large corporate accounts, and hire 2 more representative to increase their capacity to serve the DIY customer so that their average call time each day will be at 400 minutes and their process utilization rate stays at 74.07%
