A customer purchasing a Sears Roebuck appliance, such as a washing machine, can also purchase a three-year service contract for an additional fee. The contract provides free repair service and parts for the specified appliance using an authorized Sears service provider. When a person with a Sears service contract needs an appliance repaired, such as a washing machine, he or she calls the Sears Repairs & Parts department to schedule an appointment. The department makes the appointment and gives the caller the date and approximate time of the appointment. The repair technician arrives during the designated time frame and diagnoses the problem. If the problem is caused by a faulty part, the technician either replace the part if he is carrying the part with him or orders the replacement part from Sears. If the part is not in stock at Sears, Sears orders the part and gives the customer an approximate time when the part will arrive. The part is shipped directly to the customer. After the part has arrived, the customer must call Sears to schedule a second appointment for a repair technician to replace the ordered part. This process is very lengthy. It may take two weeks for the first repair visit to occur, another two weeks to receive the ordered part, and another week for the second repair visit to occur in which the ordered part is installed.
Diagram the existing process.
–> The process of Sears’ service repair contract:
What is the impact of the existing process on Sears’ operational efficiency and customer relationships?
–> The impact of the existing process on Sears’ operational efficiency and customer relationships are as follows:
- Operational Efficiency: Since they can’t optimize their store, it leads to the slowdown of work-in-progress.
- Customer Relationship: Since they schedule an appointment time on every call by a customer, it can decrease customer intimacy.
What changes could be made to make this process more efficient? How could information systems support these changes? Diagram the new improved process.
–> The changes that could be made to make the process more efficient are as follows:
- If they can’t optimize their stores, they can outsource parts for repair appliances.
- They must hire more employees if they can’t give time to every customer.
- They can return some money to a customer if the customer is not satisfied to wait until the appointment time.
- Also, the technician must carry all possible parts that may use in the repair process.
- Similarly, they can offer a one-year service contract instead of a three-year and without any additional fee.
Information systems could support these changes in the following ways:
- It can help to create a healthy relationship with the vendor.
- With the help of online customer relationships, they can know the repair contract more easily and in an efficient way.
- They also can post the time schedule and repair types on their web page. So, the customer can rely on that data in an efficient manner.
The new and improved process of Sears’ service repair contract:
Management at your agricultural chemicals corporation has been dissatisfied with production planning. Production plans are created using best guesses of demand for each product, which are based on how much of each product has been ordered in the past. If a customer places an unexpected order or requests a change to an existing order after it has been placed, there is no way to adjust production plans. The company may have to tell customers it can’t fill their orders, or it may run up extra costs maintaining additional inventory to prevent stock-outs. At the end of each month, orders are totaled and manually keyed into the company’s production planning system. Data from the past month’s production and inventory systems are manually entered into the firm’s order management system. Analysts from the sales department and from the production department analyze the data from their respective systems to determine what the sales targets and production targets should be for the next month. These estimates are usually different. The analysts then get together at a high-level planning meeting to revise the production and sales targets to take into account senior management’s goals for market share, revenues, and profits. The outcome of the meeting is a finalized production master schedule. The entire production planning process takes 17 business days to complete. Nine of these days are required to enter and validate the data. The remaining days are spent developing and reconciling the production and sales targets and finalizing the production master schedule.
Draw a diagram of the existing production planning process.
–> The process of production planning at agricultural chemicals corporation:
Analyze the problems this process creates for the company.
–> The problems that this process creates for the company are as follows:
- Recording the data of past trends, require a lot of time as they are recorded manually.
- If the demand got altered, they might have overstock or a stock.
- In the case of understock, they may lose customer faith in their company as well as to maintain the required demand they must invest in additional inventory.
- In the case of overstock, they must bear the unintentional overhead cost in the working capital process.
- Since, they require a long time process for analyzing, meeting, and finalizing the master schedule. It reduces their working efficiency.
How could an enterprise system solve these problems? In what ways could it lower costs? Diagram what the production planning process might look like if the company implemented enterprise software.
–> The ways of an enterprise system to solve these problems are as follows:
- The information on past trends must be communicated to all the departments of a company. So, it reduces the error of data.
- They can evaluate the proper demand of customers and must develop powerful strategies.
- They can use Knowledge Management Systems (KMS) that help to capture, develop, share, and effectively use organizational knowledge.
- Similarly, they can use the collaboration technique which can reduce unnecessary extra meetings in a company.
The ways to lower costs are as follows:
- They can use advanced and new technology.
- Using the optimal level of raw materials as per the unit production.
- They can have a global view of the chemicals that are used by consumers. And help to distribute the optimal level of products.
- They can use a chemical specialist to determine the appropriate chemical reaction to reduce unnecessary testing costs.
- Similarly, they can use the digital system to record data and can reduce labor costs.
The production planning process after the company implemented enterprise software:
Laudon, K. C., & Laudon, J. P. (2012). Management Information Systems: Managing the Digital Firm (12th ed.). Pearson Education.