South Shore Newsletters

 President's Message

Presentation Summary
This is a tough economy.  Everyone knows that we have to reduce costs.  Your credit lines have been reduced or are non-existent.  You have to free up cash, and everyone knows that the "Inventory" is the first place to look.
For example, companies are to be commended for reducing inventory and accounts receivable.  But this process is fraught with danger.  Lower inventory levels and stringent credit policies may trigger further sales declines.
You must organize your inventory reduction program, so that it will enhance the long-term economic health of your company.  Do what you would do anyway, but do it much faster.  Use this short-term economic crisis to develop robust long-term business processes.
This presentation is designed to provide participants with new practical tools and techniques for using Inventory reduction to force improvement. 
 
Attendees will learn the various definitions of Inventory drivers, and time-tested, workable methods for identifying new approaches to improving your business processes.
 
Presenter Robert A. Abair, CPIM, a 30-year industry veteran, consultant, and educator, will lead this presentation. 
 
"Yes, we are in a global crisis.  But, this is a mental recession as well as an economic one.  Solving it, means getting all of your people involved in the fundamental rebirth of your company."

                       Location:

Holiday Inn, Taunton, MA

 

Event Agenda

 

5:15-5:45    Registration

                      /Networking  

  5:45 -6:00   Chapter News

Sign up today on our web site
www.apics-southshore.org

Turning Around a Service :

The Art of Service Recovery

 A recent article in The Archives of Internal Medicine reminded me of the importance of service recovery and how little attention many service providers pay to it.  The article reports the results of a survey of 2,600 doctors in the U.S. and Canada that asked how they would handle serious medical errors in four hypothetical cases.  Only 42% of responding physicians would actually admit to making an "error"; another 56% would inform their patient of the detrimental incident but not admit to their mistake.  Even fewer physicians would directly apologize to patients for their blunder (only 33%).  These results indicate that few doctors engage in service recovery.
 
Doctors are not alone.  The average business hears complaints from only four percent of its customers.  Among this four percent, 60 percent would continue to purchase from the firm if their problem was resolved to their satisfaction and 95 percent would remain loyal if their problem was addressed quickly.  A customer who has had a service delivery error fixed will tell approximately five other people about their experience.   On the other hand, a dissatisfied customer will tell around 10 to 20 other people about their ordeal with a service provider.  In other words, quick resolution of a service failure can turn a potential source of negative word of mouth advertising (or even worse, litigation) into a loyal customer, especially if the service provider takes ownership of the mistake and apologizes for the error.
 
Service recovery is the activity of seeking out and dealing with failures in the service delivery process in order to improve delivery performance.  It does not involve simply pacifying and mollifying a complaining customer.  Service recovery differs from rework.  Reworking a good incurs costs in terms of labor hours, parts, and effort but once a good is sufficiently reworked, the customer never knows a defect occurred.  With services, rework often involves more than just bringing the product (customer) into specification; the service defect can be rectified by rerunning the service process but the customer is aware of the need for rework and remembers the defect even after it is repaired. So there is also a need to rework the customer's attitude, which is an uncertain specification.  Four questions that a service provider should ask him/herself with respect to service recovery are:
 
1)         Does the recovery process lead to increased customer satisfaction, at least for those customers the organization wishes to retain?
2)         Does the recovery process improve customer retention rates?
3)         Does the recovery process drive systemic process improvements?
4)         And, as a result of the above, does service recovery improve financial performance?
 
There are four basic approaches to service recovery: the case-by-case, the systematic-response, the early intervention, and the substitute service recovery approaches.  The case-by-case approach addresses each customer's complaint separately.  This approach is easy and inexpensive to implement but can potentially result in perceptions of unfairness among customers.  For instance, the most persistent or aggressive complainers may receive satisfactory resolutions to their problems while more passive customers may not.  The systematic-response approach uses planned replies to address customer complaints.  These service provider reactions are based on identification of critical failure points in a process and prior establishment of appropriate recovery responses.  If the guidelines are continuously updated as new information is learned, this approach can be very useful due to its consistent, timely application.  The early intervention approach builds on the systematic-response approach by attempting to intervene and address service process problems before the customer is affected by them.  The last approach capitalizes on the failure of a competitor in order to convert that customer's business from the competitor to one's own by providing a substitute service recovery.  For example, a customer with a hotel reservation who is denied a room due to overbooking may seek a room in another hotel.  If the desk clerk at the alternative hotel sympathizes with the customer's anguish and addresses the traveler's anxiety by providing an even nicer room than the one originally booked, that customer may become a "convert" to the new hotel and book future business there instead of returning to the hotel where the reservation was originally made.
 
As demonstrated by the hotel example, an important part of service recovery is the ability to effectively handle customer complaints.  Steps toward this goal include: acknowledging the customer's distress, showing empathy, owning the problem, apologizing to the customer, and potentially involving management for highly annoyed or abusive customers.  If a service provider has truly made a mistake, they should rectify the problem, provide the customer with some sort of compensation, examine internal processes in the organization that led to the service failure, fix the root cause(s), and inform customers what has been changed to prevent a repeat of the problem.  Service failures can be minor or major, simply annoying or potentially life threatening.  Mistakes may happen, especially when human labor is involved, but businesses should be prepared to prevent annoyed customers from becoming lost customers.


 by Laura B. Forker, Ph.D., C.P.M.
Professor, Operations Management
University of Massachusetts Dartmouth

CPIM / CSCP Certification

 

ARE YOU INTERESTED IN BECOMING
Certified in Production and Inventory Management (CPIM)?
To get certified CPIM, an individual needs to pass the following exams given by APICS.

 You will need to pass the CSCP exam (scheduled quarterly - next one due some time in March - must apply for eligibility 8 weeks prior and register  6 weeks prior to exam date) 

 

CPIM - BSCM - Wednesday Sept 16

CSCP -  Thursday, Sept 17

 

If you are interested, please contact dlpaton@verizon.net

 

Seminar

Wednesday October 21

Holiday Inn, Taunton

 

 

 

See website for further details www.apics-southshore.org

 

Vice President, Membership