Case Study - WidgetBox Manufacturing

WidgetBox

Widgetbox is the largest producer of widgets in Australia.

NB* (This is not the software type widget used on phones or websites). This term is used for small manufactured mechanical device used across many industries in machinery or factories, often made from plastic.*

Established in 1995, it offers set of tools for widget developers and its widgets are used as components in different machineries, from domestic appliances to industrial equipment.

The company was established by Steve Smith. His son and granddaughter are currently running the company and collectively form Board of Directors.

Recently the granddaughter has been allocated the post of Managing Director Widgetbox.

There is only one location from where the Widgetbox operates. The location has a warehouse for storing the raw materials used to make the widgets, machines shop the raw materials used to make the widgets and dispatch areas are next to the warehouse.

The office block houses the following operational departments:

• Purchasing
• Research and Development (often abbreviated to R&D)
• Production
• Sales
• Human Resource Management.
• Accounting and Finance.
• A recently established customer services team.

Supply chain at Widgetbox:

• Widgetbox have both internal and external customers. Their external customers number over 1,200.
• Internally, the reception yard receives the raw materials from the external suppliers. The staff members in the yard are the supplier's customers.
• The raw material is stored and kept in good condition until the production workshop staff asks for a delivery.
• At this point the storemen are suppliers and the workshop staff members are the customers.

Consider Widgetbox' organisational chart as follow.

The following is an excerpt from Widgetbox Business Plan.

Widgetbox business plan excerpt

Vision statement

To keep every Australian business running smoothly using safe, quality widgets.

Mission statement

• Innovate new ways of manufacturing and testing widgets
• Deliver consistently high-quality customer service internally and externally
• Keep Australian businesses buying Australian widgets through quality products and second-to-none customer service
• Have the best safety record of any widget company.

Widgetbox:

• Employs 55 staff members.
• Net tax profit of $1,890,000
• Financial turnover of $14,790,320

The business has a diverse customer base. It has an important customer in a local mining equipment manufacturer called West Mine Co. This customer accounts for approximately 38% of total widget sales. The other 62% sales are from the widget sales to medium and small businesses.They made an agreement with each other in 1999.

In their agreement, there were certain requirements for widget specifications and customer service which they have maintained as their product specifications ever since.

WidgeetBox has provided you the following specifications:

Widget product and customer service specifications

Widgets must be safe for use:

able to take a load force of 24 kilonewtons (kN)

every widget must be tested to half its rated strength (12 kN)

1% of every batch must be tested until they damage to guarantee that they can take a load force in excess of 24 kN

Any widget, or quantity of widgets, that are accidentally dropped must be disposed of.

Dimensions: 5mm, 6mm, 7mm, 8mm.

Tolerance rate +/-10%.

Cost: Base rate= $100 for 5mm, with increase of 15% cost for each 1mm increase in size.

At least 95% of widget deliveries must be on time (delivered 3-7 business days after the order date)

Complaints or queries from West Mine Co. to Widgetbox must be resolved according to the Widgetbox complaints policy and procedure.

WidgetBox

Scenario Update:

You are still the Customer Service Manager at Widget Box. It is currently December, and over the last few months, you have been receiving feedback from customers that customer service is just 'not what it used to be'.

The board of Widgetbox has been made aware of the decrease in customer service quality and wants to know what you're going to do to fix the problem.

According to Widgetbox recent records, customer service quality standardshave declined.

The number of calls shown on their database from January discloses a increase of dissatisfied customers of 14% from the previous year.

In the third quarter of the year, the table reveals a notable change regarding to the team members:

• Two fresh staff members were added to the team (Taya and Jasmine);
• The supervisor John was in vacation for two months (October and November);
• One of the qualified customer service officer staff left his job (Niltin).

The result of this transition had an impact of the overall number of calls per month, raising its number from 7% in September to 10% in October and 12% in November.

The probable causes of customer service shortfalls can be easily explained on the last quarter of the year, with the absence of the supervisor and the extension of recruiting two new employees.

One of the new employees, Jasmine, has been dsiplaying an inappropriate behaviour with customers and has been observed that she is not adhering to the company's policies and procedures.

You have monitored the team performance and observed some incidents, where the customer service has lacked.

Incident 1:

Jasmine is a member of your customer service team at Widgetbox. Her role is to receive telephone enquiries and complaints.

Recent complaints lodged against Jasmine:

• Jasmine has been rude to customers on several occasions. This behaviour contravenes company policy on the knowledge of the importance of friendly service to customers of Widgetbox.
• Jasmine has recently developed a habit of letting the phone ring and then placing customers on hold. This behaviour contravenes company policy on the knowledge of the importance of prompt service to customers of Widgetbox.

Incident after which customer complained

Yesterday Jasmine received a complaint from a customer:

'I work as a buyer for the state's largest supplier of mining equipment, West Mine Co. We provide a lot of business to Widgetbox.

I ordered 1,000 x 7mm widgets for delivery last Friday. I was promised that the delivery would arrive within three days. It's now a week later and they still haven't arrived. My production manager just telephoned me to say he might fail to deliver a major order unless the widgets arrive in the next four days.

A few weeks ago, a consignment of widgets arrived from Widgetbox, but they were 6mm widgets rather than the 7mm I had ordered on that occasion. I am considering going to another supplier for your widgets even though Widgetbox are the only Australian supplier. I could get them cheaper from China, but the saving isn't great when you add in the extra shipping costs. I'm going to begin legal action if the widgets don't arrive today. I might order the widgets from China from now on.

Jasmine misunderstood and thought that the customer had ordered the products yesterday and argued with him. She accused the customer of being unreasonable as Widgetbox is an industry leader in guaranteeing three-day delivery.

When the misunderstanding was eventually cleared up, Jasmine wasn't sure how to track orders or reorder the products. She said there was nothing she could perform as Widgetbox' procedures didn't seem to cover this issue.

Incident 2:

There have been certain problems with the quality control issues. The size of the widgets is being over 10% bigger or smaller than specified. Some customers have been returning their widgets and asking for refunds. One has claimed compensation for failing to meet a big order deadline because our widgets were the wrong size.

To address this issue the company gave instructions to its customer service teams to offer 15% discount for next order to its customer and replace the widgets.

West mine called on two different occasions and the customer service team members that assisted them on both occasions were different and offered different discounts on both occasions.

Considering the situation, they have again lodged a complaint to the board of directors specifying the offered discounts are different at each occasion and the orders are also processed at different speed.

YOUR TASK:

Considering the incidents specified above, COMPLETE the below report.

This should be written professionally, concisely and in detail as the Report will be submitted to the board of Widgetbox to review:

Your report should:

• summarise customer service team performance in detail
• identify probable causes of customer service shortfalls relating to both incidents
• identify options to address the problem/s
• breakdown the steps needed to rectify the incidents with the customers involved

Quality Service Delivery Report

Identified issues within Customer Service Team:

Cause and Effect of Identified issues:

SOLUTIONS/OPTIONS to address identified issues (ALL):

Recommendations on customer communications in relation to issues:

Customer Service Manager (you), additional comments if relevant: