Recommendations

                                                                


  1.  Quality 

    1. Repair services - In order to increase quality for the customer, there should be a greater focus on the customer satisfaction aspect of total quality management for the Crate & Barrel pop-up store. Customer satisfaction is derived from a customer’s assessment of perceived quality. Perceived quality refers to the level of a customer’s assessment in regard to a product or service based on the 5 dimensions of quality; conformance to specifications, value, fitness for use, support, and psychological impressions. The quality aspect that has a negative impact on Crate & Barrel is value. This pop-up store sells 2nd quality products that were overstock from other stores or slightly defective products from the manufacturer. The quality dimension, fitness for use does not have a grave impact since the slight imperfections of the products sold do not directly impact the reliability and durability of the product. On the other hand, value is a quality dimension that has a negative impact on a customer’s perception of product quality. Since the products sold at the pop-up store have imperfections the value of the products are decreased. To make up for the defect, the product is sold at a discounted price. However, the discount does not fully compensate for the value lost. One thing that the Crate & Barrel store could do in order to increase perceived quality in terms of value could be to offer repair services; not all products sold are eligible for repair, but some are. One option could be to implement repair services before the item enters the sales floor for the customers to see. By repairing the product before the customer sees it, it decreases the risk of lost value since the customer would not have seen the damage. Another option would be to place the defective product on the floor and offer a repair service at an additional cost to the customer. This method creates the impression that the customer is receiving a product on sale for a slight defect, but he/she is also able to fix the imperfection(s) for a minor cost. This second alternative would have the discounted product as well as the repair service option to help increase value for the defect. By offering a repair service after a product is sold, it increases customer satisfaction by increasing the level of support.

            

    2. Lean systems - One of the biggest customer complaints on google reviews for this Crate & Barrel location was associated with prices being too high; the customers did not see enough value for the discount when compared to the level of damage of the product. One potential reason that the prices of the defects still remain high could be that the store is incurring too many costs so they are only able to slightly lower the prices of the products in order to not lose a lot of profit. One way that the company could reduce costs could be to implement lean systems. Lean systems are a kind of operations system that maximizes value added for each of a company’s activities by removing wastes. There are 8 wastes associated with lean manufacturing; waiting, overproduction, inventory, defects, underutilization, transportation, inappropriate processing, and motion. There is a cost associated with each waste; the excess inventory being held in the store might incur too many ordering and holding costs for the company, thus forcing them to raise their product pricing. 

    3. 5S - In order to keep the environment of the store clean and organized to help increase the quality dimensions that are associated with customer satisfaction is to implement the 5S lean technique. The 5S stands for sort, straighten, shine, standardize, and sustain. Sorting involves separating the needed items and discarding the unneeded items. Straightening involves neatly organizing what is left in order to easily locate what is needed. Shining involves cleaning and washing the work area. Standardizing involves creating schedules for routine cleaning and sorting of the work area. Sustaining involves having discipline over the first four S practices in order to maintain a clean and organized work environment. If implemented, this technique will maintain the Crate & Barrel store in a clean and organized fashion since cleaning and sorting would be done routinely. Keeping a clean and organized work environment will not only help increase psychological impressions for customers but it will also help the employees easily locate any additional defects that may have been hidden because of dust or clutter. 


  2. Delays 

    1. Gantt chart - One way that Crate & Barrel store manager Paula Eastmond can reduce the amount of delays for her customers in order to increase customer satisfaction is to implement the use of a gantt chart on a routine basis. A gantt chart is a tool used by managers in order to write down tasks that need to be completed for a project along with the project schedule. A project schedule includes the start and finish times for each task. The store manager Paula, should assign a manager to the stock associates team. Before creating a gantt chart, Paula should create a work breakdown structure (WBS) in order for the stock associate manager to know what guidelines to follow when creating weekly gantt charts. A WBS is a statement of all the work that must be completed within a given time frame. In order to create a WBS, Paula needs to try to determine the store’s takt time; determining the cycle time needed in order to match the rate of sales. She also needs to determine the average daily supply of inventory being delivered to the store and how long it takes to build different types of products. For instance, it takes up to 5 minutes for a stock associate to assemble an easy night stand and up to 20 minutes to assemble a more complex piece like a bed frame. Once that information is determined, the WBS can be created. It should include how many pieces need to be assembled by the stock associates in a given time frame in order to produce a steady and constant supply to the sales associates throughout the operating hours of the store. Once the WBS is created, it would be the job of the stock manager to create gantt charts based on weekly projects. The stock manager would be in charge of planning, executing, monitoring, and controlling the work done by stock associate employees in order to meet the demand of the newly implemented WBS. The tasks within the gantt chart would include the amount of inventory that needs to be assembled and transported to the sales floor each day. In order for the stock manager to successfully delegate work to the stock associates, he/she should implement scheduling; the process of taking a resource plan and creating specific tasks in a detailed fashion. The manager could use the gantt chart to decide how many employees should be assembling which types of products in order to meet the requirements of the WBS. By implementing these techniques, products will be built in an efficient amount of time, thus reducing the delay of customers having to wait for new products. This can also help the store reduce inventory holding costs and steadily increase inventory turnover rates.

    2. Batch process - Another option that could be implemented in order to reduce customer delays when it comes to having stock associates assemble inventory and transfer them to the sales floor would be to implement a batch assembly process. Batch processes include multiple products, moderately repetitive work with low to moderate volume, and disconnected line flows. Since Crate & Barrel has several different types of products that need to be assembled, a small batch process would be most appropriate. This type of process would create a steady output of assembled products on a daily basis in order to keep up with customer demand and reduce delays. 

    3. Level strategy - One way to ensure that the Crate & Barrel team will never be understaffed is to implement a level workforce strategy. A level strategy is a kind of workforce strategy that aims to keep the workforce constant; hiring and layoffs are only done in the first period, so undertime and overtime is utilized in order to meet demand forecasts. By implementing a level strategy, it will be easy to determine when the store will need more or less workers and it’ll ensure the customers are always satisfied with the speed of the Crate & Barrel service. Currently, there are about 6 total employees during the week and 10 total during the weekends; there are several different kinds of employees taking on different roles, so 10 employees isn’t enough to meet daily demand. During an average period where demand is constant we recommend a total 12 employees; 4 stock associates, 4 sales associates, 1 manager, and 3 pricing associates. During periods with higher demand (like holidays) we recommend to keep the same staff and utilize overtime to match demand. During periods with lower demand we recommend to utilize undertime to match demand forecasts. We were unable to retrieve exact numbers (except for number of employees and hourly wage) in order  to conduct a more accurate cost for implementing a level strategy, therefore we used estimates based on homeworks and examples we did in class. Period 1 is based on an average demand forecast, period 2 is a high demand forecast, and period 3 is a low demand forecast. 

Additional information needed to complete the level strategy workforce includes:

  • Start off with 10 employees.

  • Overtime cannot exceed 20% of regular time capacity in any period. 

  • Regular time wage is $630.00 for 40 hours. (average pay is equal to $15.75 per employee since employees are paid between $15.00 - $16.50 per hour) 

  • Overtime wage is equal to 150% of regular time wage ($945.00 for 40 hours or $23.63 per hour).

  • Undertime wage is equal to $12.00 per hour or $480.00 for 40 hours. 

  • Hiring costs are equal to $1,000.00 per employee.

  • Layoff costs are equal to $500.00 per employee.

Using the level strategy, the forecast, workforce, undertime, overtime, utilized, hires, layoffs, and associated costs would be as follows:

Period

1

2

3

Forecast

12

16

10

Workforce 

14

14

14

Undertime

2

0

4

Overtime

0

2

0

Utilized 

12

14

10

Hires

4

-

-

Layoffs

0

-

-

Utilized Cost 

$7,560

$8,820

$6,300

Undertime Cost

$960

0

$1,920

Overtime Cost

0

$1,890

0

Hiring Cost

$4,000

-

-

Layoff Cost

0

-

-

Total Cost

$12,520

$10,710

$8,220

Grand Total Costs

$31,450


    1. Implement a software - One way that Crate & Barrel can reduce customer delay in order to increase customer satisfaction in terms of accurate product pick-up time is to implement a software like TablesReady. TablesReady is a waitlist application and paging system that is utilized by the restaurant industry; when the restaurant is full, the customer provides their name and number to the employee and this employee inputs this data into an information system which creates an online waitlist. When a table is open, the employee can click on the customer’s name on the waitlist and a generated message will be sent to the customer’s mobile device, alerting them that their table is ready. This same type of information system can be utilized by Crate & Barrel; when a customer places an order to pick up a product in store or buys a product and comes back in the afternoon for pick up, the customer can provide their name and number to be included in the system. The customer can schedule a pickup time and get a generated message saying a stock associate is confirmed to assist a few minutes prior to the appointment or the customer can inform the sales employee with a time range they are available and the employee can send the customer alerts when stock associates become available for assistance. Within the system, the stock associates can also let the sales associates know when they are or will be available. This software will create a schedule for certain employees to be available for customer assistance at a specific time and it also will be easier for sales associates to determine stock associate availability. An application like TablesReady or something similar can eliminate the guesswork of employee availability in order to ultimately reduce customer wait times and increase satisfaction. 

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