Theory of Constraints Handbook - James Cox Iii [589]
BD1: Providing unnecessary services hurts effectiveness.
BD2: Unnecessary services compete for the same resources, which may be busy providing truly necessary service.
BD3: Unnecessary services may constitute a significant part of the CS workload.
BD4: Unnecessary services may constitute a significant part of the CS expenses.
BD5: Unnecessary services do not contribute to CS revenue.
BD6: There is an ability of CS to distinguish between the necessary and the unnecessary services.
C—D’
CD‘1: For the customers, service of their equipment is a necessity.
CD‘2: It is almost impossible for customers to have an in-house expert covering at all times all of their equipment technology needs.
CD‘3: In the long run, nobody will renew a service contract if CS is not capable of providing the necessary assistance at a time of need.
CD‘4: In the long run, nobody will pay for a service if its provider is not able to provide the necessary assistance at a time of need.
CD‘5: Service contracts do not discriminate between necessary and unnecessary services.
CD‘6: Clients sometimes request what turns out to be an unnecessary service.
CD‘7: Clients sometimes are unable to distinguish between necessary and unnecessary services.
D—D’
DD‘1: Not all requested services are truly necessary.
DD‘2: There is no ability on the part of the customer to distinguish between the necessary and the unnecessary services at all times.
DD‘3: There is no need on the part of the customer to distinguish between the necessary and the unnecessary services at all times.
The key assumptions we would like to challenge lay behind the D-D‘ conflict arrow; it is the lack of either the ability or the need (or the will) on the part of the clients to differentiate between what is truly needed and what is not (assumptions DD‘ 2 and 3). It assumes that quite a significant part of the services customers request is superfluous and not really necessary. CS knows this distinction, but is prevented from acting upon it for fear of losing future contracts, while the clients are quite oblivious to it.
However, what if we challenge these assumptions? What if we create a reality in which this distinction is as clear to the customer as it is to CS? Moreover, if we succeed in designing an environment in which the interests of both sides coincide, instead of colliding, we may have a solution to our problem, one that stands a good chance of success. This would indeed be a breakthrough injection.
Rarely can a complex problem be solved with just one bold stroke (Alexander the Great and the Gordian knot not withstanding); we would like to present some of the main changes needed to restore CS contribution to a firm’s overall profitability.
Differential Pricing
The very first order of business in resolving our problem is the mapping of unnecessary services (according to the CS personnel) that customers demand. It stems from the BD6 assumption, stating there is an ability of CS to distinguish between the needed and the unnecessary services. It is a valid assumption, which we do not challenge. As a rule, most events deemed unnecessary relate to unscheduled events, not to the routine (and planned ahead of time) service visits. Even when viewed as urgent, even emergency events, a good part of them could be resolved without creating an undue load on the service providers. When scrutinizing CS activity, one can categorize their activity according to the effort or the expertise level needed for their resolution. Moving from the most common and simple to the most complex, they can be listed as follows:
1. Problems the customer can easily resolve.
2. Problems that the Response Center (or Call Center) can fully resolve with the clients.
3. Problems that the Response Center can diagnose, but will still necessitate the on-site arrival of the Field Service Engineer (FSE) to repair.
4. Problems that the Response Center has difficulty diagnosing, which necessitates the on-site presence of the FSE for diagnosis.
It is often the feeling of the CS personnel