Page 164 - DMGT522_SERVICES MANAGEMENT

Unit 7: Delivering Services on the Web

managers to monitor the entire process online. Michael Dell was able to pioneer the Notes
concept of ‘mass-customization’, first through the toll-free telephone order receiving system
and then through the Internet. Today, it sells through the net computers and servers worth
over $ 19 billion – when compared to its total sales of $30 billion. It has removed 120
human hands operations and has 60 process patents. Its entire focus has been to adopt
technology, which could process orders, guide its customized manufacturing process, and
deliver the computers – all in the shortest possible time. Thus it has been able to do in 24
hours and the model has been the envy of its competitors. It has used technology to fine-
tune its supply chain, keep inventory to the minimum and avoid obsolescence—the bane
of the industry.
RFID made its debut in India, when Wipro launched an RFID-enabled shop on its Bangalore
campus in July, but now Pantaloon Retail will be the first Indian retail chain to experiment
with RFID. It has engaged Wipro to run an RFID pilot project and is also talking to Israel-
based Check Point Software, which has worked with Metro on a similar project. The pilot
project is being implemented at Pantaloon Retail’s central warehouse in Tarapur, near
Mumbai. It will be limited to just 1,000 tags being attached to a few selected product
lines mainly from its in-house textile mills. The pilot project itself will cost the company
` 30 lakh but is expected to provide crucial insights on the probable process needed to
implement RFID technology across the chain. Whenever a customer buys a product, the
retailer can track its movement – and even generate a bill automatically, without the
customer going to the cash counter.
However, Pantaloon is implementing RFID technology mainly for managing its supply
chain – from vendors to warehouse and then to the shop floor – with carton level tagging.
It might take another three years for the technology to evolve in the country, greatly
depending on the readiness of their vendors. Wal-Mart has asked its vendors to pick up
the entire cost, without any increase in product price. It has set a January 2005 deadline for
100 of its vendors and the rest must supply RFID-enabled products by 2006. The vendors
are expected to spend close to $2 billion on this. In India, each tag costs ` 6 and with the
chain stocking around 3 lakh SKUs, the entire spend is quite mind-boggling. The economies
of scale will come about only when other players also decide to implement RFID. While
other retailers like Shoppers’ Stop are taking a wait-and-watch approach, IT companies
like Patni Computer, Infosys and Wipro are hard-selling the technology.

Note RFID tags can be either passive, active or battery assisted passive
Other technological usages in retailing are:
Customer Relationship Management (CRM) or On-Line Analytical Processing (OLAP)
software to run on top of its existing database
This can help companies in more intimate understanding of the customer and his needs. It
includes the following customer-facing applications:
1. Sales Force Automation (SFA): Initially designed to support salespersons in managing
their touch points and to provide them with event calendars about their customers, SFA’s
meaning expanded to include opportunity management – supporting sales methodologies
and interconnection with other functions of the company such as production. SFAs helped
a service firm in the following ways:
Contact Management: Maintain customer information and contact histories for existing
customers. May include point in the sales cycle and in the customer’s replenishment
cycle.
Activity Management: Provide calendar and scheduling for individual sales people

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