Matching Supply & Demand & CRM


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Matching Supply & Demand & CRM

  2. 2. OBJECTIVE • Explain: • the underlying issue for capacity-constrained services • the implications of capacity constraints • the implications of different types of demand patterns on matching supply and demand • Lay out strategies for matching supply and demand through: • shifting demand to match capacity or • flexing capacity to meet demand • Demonstrate the benefits and risks of yield management strategies • Provide strategies for managing waiting lines
  3. 3. Fundamental Issue the underlying issue for capacity-constrained services Lack of inventory   perishability (cannot store up) simultaneous product and consumption (cannot be transported from one place to another)
  4. 4. Managing Demand and Capacity  No buffer for services from demand.  Demand volatile  Goal: supply and demand balanced at optimum capacity  Under utilizing when demand is below optimum capacity  If demand is above capacity then quality may suffer
  5. 5. What is the Nature of Demand Relative to Supply? Extent to which supply is constrained Peak demand can usually be met without a major delay Peak demand regularly exceeds capacity Wide Narrow 1 2 Electricity Natural gas Telephone Hospital maternity unit Police and fire emergencies Insurance Legal services Banking Laundry and dry cleaning 4 Accounting and tax preparation Passenger transportation Hotels and motels Restaurants 3 Services similar to those in 2 but which have insufficient capacity for their base level of business
  6. 6. Understanding Capacity Constraints and Demand Patterns Capacity Constraints Time, labor, equipment and facilities Optimal versus maximal use of capacity Demand Patterns • Charting demand patterns • Predictable cycles • Random demand fluctuations • Demand patterns by market segment
  7. 7. Managing Demand Shift demand from high to low demand periods. Decrease demand during peak demand periods. Stimulate demand during low demand periods.
  8. 8. Strategies for Shifting Demand to Match Capacity Demand Too High Demand Too Low Shift Demand • • • • • Use signage to communicate busy days and times Offer incentives to customers for usage during non-peak times Take care of loyal or regular customers first Advertise peak usage times and benefits of non-peak use Charge full price for the service-no discounts • • • • • Use sales and advertising to increase business from current market segments Modify the service offering to appeal to new market segments Offer discounts or price reductions Modify hours of operation Bring the service to the customer
  9. 9. Shifting Demand Advantages Disadvantages Business is not lost. Customers may not Service quality is not want to shift. Customers may not have control over when they use the service. adversely affected. Increased efficiency.
  10. 10. Reducing Demand Advantages Disadvantages Service quality is Lost revenue. normally improved. Increased efficiency. Not a good strategy for firms in the for-profit sector.
  11. 11. Stimulating Demand Advantages Disadvantages Increased May not be efficiency. Increased income. Increased utilization of facility. profitable. May cause some current customers to shift usage.
  12. 12. Tools for Managing Demand Reservation system. Differential pricing.
  13. 13. Strategies for Flexing Capacity to Match Demand Demand Too High • • • • • • • Flex Capacity Stretch time, labor, facilities and equipment Cross-train employees Hire part-time employees Request overtime work from employees Rent or share facilities Rent or share equipment Subcontract or outsource activities • • • • Demand Too Low Perform maintenance renovations Schedule vacations Schedule employee training Lay off employees
  14. 14. Who are the customers in a hospital? Patients Family members Referral Doctors Suppliers Employees Who is the key customer in the hospital?
  15. 15. What is patient satisfaction? Patient Satisfaction is “hospital services and its perception by the patient” minus ”patient expectations” 0 = Patient Satisfied - = Patient Dissatisfied + = Patient Delighted Patient satisfaction measures need to be developed from the patients perspective Patients are becoming better informed Involve patients for making improvements Patient satisfaction is not Static but Dynamic
  16. 16. Patient Expectations Good Medical Care Cleanliness Good Nursing Care Good Coordination Less Waiting Time Cooperation among Excellent Hospitality the Staff Discipline Communication & Information Transparency in charges and procedures Personal Attention Courteous Behavior Affordable Charges
  17. 17. Challenges in Service Marketing Giving a feel for the “product” Managing Demand Fluctuations Maintaining Quality Cost Containment Attitudinal block in using proven marketing principles in service marketing
  18. 18. Factors that promote Demand Perspective Services are available for longer or convenient hours Patients are provided information through Brochures, Publicity, etc on services available Services are reliable and offered promptly Required equipment are available Patient friendly Systems & Procedures
  19. 19. Factors that promote Demand - Accessibility Perspective Good public transportation Centrally located Outreach Programs to reach out to the Rural People
  20. 20. Factors that promote Demand - Affordability Perspective Standard pricing structure Charges affordable by most of the people in the Community Transparency in Patient Fees – no hidden charges Simple procedure for getting free/subsidized care
  21. 21. Factors that increase Demand - Promotion Avenues Structured approach with designated staff Good Rapport with Community Publicity through different media Promotion at Outreach activities Meetings/seminars for other doctors Developing a referral network Promotion through satisfied patients Industrial tie-up for routine examination of their employees
  22. 22. Factors that affect Demand - Attitude Perspective Reasons for Low Demand: Sophisticated technology will automatically trigger demand Belief that patients, if need eye care, will definitely come to us Providing Service as per Providers’ Convenience Systems & Procedures are not patient friendly Gap between Patients’ Expectations & Providers’ Perception Lack of patient orientation
  23. 23. Factors that demand attitude :- perspective Skilled Doctor & other staff Standard Clinical Protocol Good Administrative System & Procedures Courtesy & Politeness Proper Explanation Clean environment and comforts meeting or exceeding expectations Systems to monitor clinical outcomes & Patient satisfaction
  24. 24. Factors that promote Demand - to the Rural areas & the poor Reasons for Low Demand:  No one to Escort  Fear of Surgery  Ignorance  No desire for surgery  No time for Surgery  No money for surgery Promoting Demand:  Counseling to build confidence that Staff will take care  Health education  Explain benefits  Free Transport/Food  Free/subsidized Surgery
  26. 26. What is CRM? • The approach of identifying, establishing, maintaining, and enhancing lasting relationships with customers.” • CRM “is a business strategy that aims to understand, anticipate and manage the needs of an organisation’s current and potential customers”. (know,target,sell,service) • CRM is a shift from traditional marketing as it focuses on the retention of customers in addition to the acquisition of new customers
  27. 27. Customer CRM Relationship Management ICICI.pdf