2. “SAFELITE AUTO” GLASS AT A GLANCE
Established in 1947
Largest auto glass manufacturing company in US having market
share of 12% as compared to its competitor Harmon glass’s of 6%
500 stores, 3000 employees, 1000 installers
Offered services through their mobile services and its stores
Between 1987-1989 Safelite grew from 250 to 550 stores by
opening as many stores as possible
Due to expansion craze stores had been opened for the sake of
increasing there geographical reach, and were not located in
prime service areas.
3. OLD BUSINESS MODEL OF “SAFELITE”
Store Based Approach
Each store having a manager, some technicians and certain
number of trucks
Paid an hourly wage rate
Salary did not vary with number of windows installed
Bonus structure based on Profitability
Problems
Stores were competiting with each other
4. NEW BUSINESS MODEL OF “SAFELITE”
To group stores together that were called as “Market”
Central distribution of windshields from one location in the market
Each market to contain a warehouse that in turn contains a
dispatch command center (DCC)
Central telephone unit (CTU) where CSR’s answered calls and
scheduled appointments
Each DCC to operate within 50-miles service radius.
5. COLLABORATION WITH INSURANCE
INDUSTRIES
Insurance companies willing to outsource (High Volume, Low
cost)
Implemented Total Claim Solution(TCS) to utilize current
telephone and data transfer technology to make claims
processing more efficient
Customer CSR
Batch-Bills
•Preferred company storePreferred
Companies
•Preferred
•Safelite
Safelite
6. REASONS FOR LOW PRODUCTIVITY
Did not put 100%
effort
Spent time in
playing games
Unable to locate
customers in
reasonable time
Inability of
Technicians to
interpret direction
to reach customer
Wrong parts
provided by
warehouse staff
Technicians not
checking the parts
before leaving to
customer location
Cancellation of
Order by
customer without
notifying Safelite
Managers
inefficiency in
assigning jobs
7. NEW SYSTEM TO INCREASE PRODUCTIVITY
Performance Payment Plan
Piece rate plan for every windshield technician installed
Weekly pay based on the total number of windshield installed
Performance evaluation after 12-weeks, if it exceeds the hourly
wages/guarantee rate then PPP rate to be applied
Reduction of 30% in guarantee rate so as to encourage technicians to
work towards PPP rate
Managers specific PPP plan
PPP
For
Technicians
For
Managers
8. 3 OPTIONS TO IMPLEMENT THE PPP PLAN
Don’t implement the new plan, stay with the old plan.
Implement the new piece rate plan with no reduction
in the guarantee rate.
Implement the new piece rate with the reduction in
the guarantee rate.
Our Suggestion
Implement the new piece rate with the reduction in the
guarantee rate (10-15% instead of 30% )
9. BENEFITS OF IMPLEMENTING PPP
Increased productivity of worker
Labor cost will be decreased.
Reduction of turnover of productive staff.
Number of windows installed per week will be
increased.
Average compensation per worker might be
increased but productivity will be increased more
in comparison.
Changed behavior of staff.