CASE STUDIES National Air Expres National Air is a competitive air-express firm

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CASE STUDIES National Air Expres National Air is a competitive air-express firm with offices around Budget Considerations the country. Frank Smith, 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 in the 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 $1,200 per week remember: snowstorms, carthquakes, 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 Service Methods National Air offers door-to-door overnight air-express delivery 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. Discussion Questions within the U.S. Smith and Lewis manage a fleet of 24 trucks to handle freight in the Chattanooga area. Routes are assigned by area, usually delineated by zip code boundaries, major streets, or key geographi- 1. Is the productivity measure of shipments per day per truck still 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 routes are a combination of regularly scheduled daily stops and pickup call-ins? Can the driver be expected to be at several loca- tions at once at 5:00 P.M.? pickups that the customer calls in as needed. These call-in pickups are dispatched by radio to the driver. Most call-in customers want as 3. How should package pickup performance be measured? Are standards useful in an environment that is affected by the weather traffic, and other random variables? Are other companies having late a pickup as possible, just before closing (usually at 5:00 P.M.) When the driver arrives at each pickup location, he or she provides similar problems? supplies as necessary (an envelope or box if requested) and must receive a competitive, a professional, courteous driver is essent tomers. Therefore, Smith has always been concemed that drivers not rush a customer to complete his or her package and paperwork air waybill for each package. Because the industry is extremelySource: Adapted from a case by Phil Pugliese under the supervision of ial to retaining cus- Professor Marilyn M. Helms, University of Tennessee at Chattanooga Reprinted by permission

Explanation / Answer

Answers:

Applying these measures must make the company more effective in its shipment operations.

2. To reduce the daily variability, the customers can be told a time that their goods will be delivered & the customers with the help of internet and track the status of their product & the time of delivery to their place.

The drivers can’t be expected to b at the same place & same time. They can be told to be at different place & different time that are close to each other.

3. Pick up performance can be measured by talking with the customer & the driver & how the goods are delivered to the customer. Feedback is necessary for the company to know the areas to be improved for ensuring customer satisfaction.

Standards re useful in the environment that is affected by weather, traffic & other random variables. This shows the customers that the company is ready to deliver the goods to their place irrespective of weather, raffic or any other issues. With these standards, it can help the company to build customer confidence & this company as an option for delivering ts goods.

Other companies engaged in similar kind of business will also have similar problems & also some additional problems. It depends on company’s efficiencies & effectiveness in its operations

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