lattiased vans at its plant in Detroit. The labor productivity at this labor-hou
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lattiased vans at its plant in Detroit. The labor productivity at this labor-hour, atthis job shop during te first week ofMander Refer to MyoMub for this additional homework problem LIE. CASE STUDIES National Air Express National Air is a competitive air-express firm with offices around Budget Considerations the country. Frank the Chattanooga, Tennessee, station man Smith and Lewis have found that they have been unable to meet their ager, is preparing his quarterly budget report, which will be presented customers requests for a scheduled pickup on many occasions at the Southeast regional meeting next week. He is very concerned past quarter. Although, on average, drivers are not handling any more about adding capital expense to the operation when business has not business, they are unable on some days to arrive at each location on time. increased appreciably. This has been the worst first quarter he can Smith does not think he can justify increasing costs by si 200 per week remember: snowstorms. earthquakes, and bitter cold. He has asked for additional trucks and drivers while productivity (measured in ship Martha Lewis, field services supervisor. to help him review the avail- ments per truck day) has remained flat. The company has established able data and offer possible solutions. itself as the low-cost operator in the industry but has at the same time committed itself to offering quality service and value for its customers. Service Methods National Air offers door-to-door overnight air express delivery within the U.S. Smith and Lewis manage a fleet of 24 trucks to handle Discussion Questions freight in the Chattanooga area. Routes are assigned by area, usually 1. Is the productivity measure of shipments per day per truck still delineated by zip code boundaries, major streets, or key geographi- useful? Are there alternatives that might be effective? cal features, such as the Tennessee River. Pickups are generally han- 2. What, if anything, can be done to reduce the daily variability in dled between 3:00 P.M. and 6:00 P.M., Monday through Friday. Driver pickup call-ins? Can the driver be expected to be at several loca- routes are a combination of regularly scheduled daily stops and tions at once at 5:00 P.M.? pickups that the customer calls in as needed. These call-in pickups 3 How should package pickup performance be measured? Are are dispatched by radio to the driver. Most call-in customers want as standards useful in an environment that is affected by the weather late a pickup as possible. just before closing (usually at 5:00 PM) traffic, and other random variables? Are other companies having similar problems? When the driver amives at each pickup location, he or she provides supplies as necessary (an envelope or box if requested) and must receive a completed air waybill for each package. Because the industry is extremely source: Adapted from a case by Phil Pugliese under the supervision of competitive, a professional, courteous driver is essential to retaining cus- Professor Marilyn M. Helms. University of Tennessee at Chattanooga. tomers. Therefore, Smith has always been concemed that drivers not nush Reprinted by permission. a customer to complete his or her package and paperwork Video Case O & Frito-Lay: Operations Management in ManufacturingExplanation / Answer
1. As it is given in case that on many occasions they failed to meet customer’s schedules. So the productivity measure per day per truck is not useful anymore. They need to focus on number of orders picked up in a day to measure their productivity.
2. They can use hub and spoke model. As the packages are mostly envelopes so they need to form a bike team who can go and pick up the packages from the different location and gather at a destination where they can handle it to truck driver. This will save time and more number of parcels can be dispatched. By doing this we can easily reach the customers who are willing to hand over the package before the peak hours. This will bring down the burden of peak hours and more numbers of packages can be gathered in same resources.
3. Standard variables like weather, traffic cannot be ignored in such business. There is fair possibility that other companies are also facing the same problem. Package pickup performance can be measured on the basis of package pickup per day.
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