Innovation in Service through Scheduling and Planning

Service Management has become an extremely complex function but at its heart is the ability to manage staff through effective scheduling and logistics. In this way it can create order within the various complex supply chains that have been woven together to form intricate networks. There is a recognisable challenge for the business to balance the demands of such a network while generating revenue, reducing costs and ensuring effective consistent fulfilment, in an ever-demanding customer environment.

The increasingly complex requirements necessary to deliver effective and efficient Service Management is presenting service organisations with significant challenges. Service Level Agreements (SLAs) are ever more demanding and based around sophisticated resource management of inventory and staff. There is a need for increased control and enhanced visibility of both inventory and engineers within the total operation, as companies strive to utilise their inventory assets in a more effective manner in order to attain the critical performance levels necessary to achieving SLAs. This situation is complicated even further by a need to provide effective reverse logistics and an interface into product logistics, while managing and supporting an increasingly complex array of suppliers, repairers and customers. These demands on service management need to be fully supported by scheduling systems and processes to produce an effective service operation for an efficient, profitable organisation to emerge.

A consequence in many cases, is that management teams are responding with actions designed to manage costs, but tend to remain reactive in their outlook, characterised by operations responding to fault calls and dealing with part shortages through expediters and selling off (or worse - writing off), excess and obsolete stocks. Many operations have become relatively adept at using and applying these techniques but they still represent a cure rather than prevention, and as such represent avoidable costs. This transformation of cost centre attitudes, to revenue stream generation has become a significant differentiator for those companies capable of seizing the opportunity.

Given this backdrop, it becomes a major challenge to the business to consider service management and its major support operation, scheduling, planning and forecasting, as strategic weapons that in many instances are currently grossly under-utilised by most businesses. Very few businesses think of their scheduling operation in terms of its ability to significantly impact shareholder value and yet quite often this part of a business manages the highest staffing levels and the largest capital investment, and thus potentially the biggest impact on shareholder value.

A world class cost-effective scheduling operation can be differentiated from the competition by some key attributes. One very effective differentiator (and barrier to entry for competitors) is the cost effectiveness of the various processes in place, enabling a business to offer their services at a low cost. The “High Tech” sector is continually trying to reduce the cost of service, however this can and does result in service companies losing money and finding their once healthy margins eroded.

Service enterprises who have either failed to recognise the need or haven’t invested the time to implement a properly structured strategic process, have consequently suffered from a lack of focus and cohesion across operations, resulting in divergent activities, which introduce inconsistency, inefficiency and increased costs into the service operation.

The traditional tools and skills are struggling in some businesses to meet the service level demands of clients; with the financial imperatives faced by all businesses, more must inevitably be done with less. One solution that appears to be finally coming of age is scheduling, as it begins to be better used to offer a cost-effective in some cases real-time service solution with the focus on customer needs.

Leading-edge practioners have long recognised that effective visible inventory deployment and stock control are very different from simple inventory reduction, which is often seen as a quick-fix mechanism for reducing employed capital. Many businesses have reviewed their inventory with the basic aim of reducing the capital employed, without realising those high levels of inventory result from a number of causes, and probably represent a legacy of inappropriate stocking as well as over stocking over a long period, resulting not only in excess material but also obsolete material.

As the true role and value of accurate and effective personnel and inventory deployment becomes apparent, the importance of a fully integrated scheduling operation will become apparent and provide the most valuable input for successful service delivery. There is continued pressure for service to produce the right part in the right place at the right time at the lowest cost, and with the right person to use the item. Effective and efficient inventory and staff deployment has become a fundamental issue in achieving the right level of customer service, cost effectively.

Increased scale, reduced densities and enlarged areas have all served to make the task of scheduling a major challenge, with many different types of trade-off. Businesses building different products in different locations across the world, or outsourcing all but their core components to various suppliers, require an increasingly more efficient management of lead-times, availability, quantities and price in a complex environment. Add to this the facets of product churn, and changes within weeks not months, and it is little wonder that mechanisms used to manage the operation of parts and people, and provide the necessary visibility and control, have had to become far more effective, resilient and real-time.

Many companies talk of a one-stop-shop achieved through partnering, mergers and/or acquisitions etc. These have proved very successful when created to accurately fit a customer’s needs; however problems may arise for these operations if the customer’s needs change or the business dynamics change. Costs may begin to rise and customers may look elsewhere for better, more cost-effective solutions. All kinds of mechanisms have been used to avoid issues coming to light, however customers have become more demanding and more aware of the real costs, and as a result a high level of dissatisfaction associated with these types of deals has been evident.

Fixed costs associated with the creation of stock, people or premises must be avoided.
The best scenario would be to set up an operation from the start with the bare minimum of fixed costs providing specific services through a one-stop-shop with the focus always on the customer’s requirements. The target is to deliver customer satisfaction but minimise the fixed cost element of the operation, keeping it variable at all times to ensure no overheads, little or no fixed costs, and high flexibility. The value of this solution is evident with the growing popularity of pay-per-service visits.

Many companies have combined this economy with an efficient provision of parts and staff. They have created a business with an infrastructure designed to accommodate continual refinement, and able to keep up with varying demands, at times even anticipating trends to allow positioning ahead of the competition. The business is designed to support the customer requirements and deliver the solution required. The solution works by understanding customer requirements, by providing support to the total service operation including the logistics operation, supplying parts, engineers, or remotely fixing for a perfect customer solution as required.

The solutions they offer come in all shapes and sizes and each situation requires specific tailoring to coordinate with the individual methods of the customer, providing a unique offering to each customer to provide them with a differentiated solution. The aim is to provide a service that is better than the customer’s existing operation in terms of price and service. Providing flexibility and reducing the exposure of their customers to the vagaries of the market place. This not just a cost-cutting exercise, instead it is one that delivers the service required for the long term, without downsides. Providing additional value and security while optimising the operation, maintaining the customer’s competitiveness by reducing costs, and improving service as the partnership grows and the awareness of the total requirement becomes clearer.

The attributes described above are critical given the rapid changes and costs of various technology options available for investment in service operations, but of major significance is that changes are required to take place within businesses in which the operation and personnel have been in place for many years. Quite often the structures and culture in place were not designed for the short leash control that is provided by modern field communication and scheduling solutions. In a company where the culture supports the decision to improve field communications and generate improved customer contact, there will be the opportunity to change the usual productivity measure of calls per day into a value measure, able to assess feedback from the field engineer and gauge reasons for any failure to deliver the required visits per day. The improved use of field communications should be seen by field engineers and customers, as a positive move to provide better information about customer needs and requirements to both businesses.

The most insightful companies have then gone on to implement effective measurements, through the business objectives and KPI’s, which in turn are cascaded down to each function (Call Centre, Diagnosis, Parts Logistics, Scheduling, Managed Services and Field Engineering), each structuring their objectives, KPI’s and action plans from overall company goals. In this way stretch goals/metrics can be set as a baseline across the business incorporating all the various departments which together with consistent reporting mechanisms that measure actual performance can be tracked enabling a very tight control on the performance of the business as a whole and delivering the customer a single consistent service. In this way customers operational strategies are fully supported by effective processes and infrastructure which allows the service organisation to deliver cost efficiently, while improving margins and increasing the resilience of the operation to face up to any potential market difficulties.

Offering optimum levels of service and providing competitively priced services will position the business to take advantage of upturns in the market. The business should be able to live up to the promises made on its behalf, and over-deliver on demand cost-effectively and thereby increase customer satisfaction, retention and margins. These customer relationships already evident in their customer base provides differentiation and the ability to out-do competitors and sell cost effective solutions to customers requiring differentiators, which are provided by an in-depth knowledge of customer requirements provided by top quality staff throughout the operation.