Page 293 - DMGT522_SERVICES MANAGEMENT

Services Management

Notes 4-5 tones on selected tracks to yield higher revenue. Such measures combined with a
“value for customer” philosophy and considerations of IR as an economic enterprise,
were elementary in bringing about Indian Railways’ turnaround. The Railway Budget
2006-07 had great plans for expansion and growth for railways and a landmark Dedicated
Freight Corridors.
But the critical question was with the change in political scenario or with the end of tenure
of the incumbent government, would IR still be able to sustain its unprecedented
performance in the future?
Source: http://www.ibscdc.org/case-catalogues/Strategy_Case_Studies(Catalogue_II).pdf

14.2 Capacity Management

The other set of strategic options are related to managing capacity and controlling the supply
side by selecting out of the following strategic options:
1. Using part-time employees

2. Increasing efficiency of existing personnel involving customers
3. Sharing capacity with others

4. Investing in expansion options.
At a resort hotel, local students can be engaged during peak seasons to cater to the customers.
The most appropriate example is management institutions which run their regular courses with
part-time/guest faculty.

The other option is to maximise the efficiency of existing employees by imparting training. By
training the staff in multiple functions, most employees can be engaged in essential tasks of
delivering the service during peak hours and the support tasks are deferred to slack periods. A
smaller hotel can successfully use this method where a handful of people can provide room
service, housekeeping and restaurant service.
The third method is that the consumers participate in delivery of service and, thereby, lower the
labor requirements of the producer. Self service groceries floor or restaurants are examples of
such a strategy.

The fourth method is that of sharing capacity with others rather than creating capacity in-house.
Hospitals, for example, participate with pathological labs, X-ray clinics, CAT-scanning labs, etc.
rather than investing in expensive equipment themselves. Even restaurants are selling branded
ice creams rather than investing in ice cream making facilities in-house.
Lastly, of course, is the option of increasing capacity by investing in expansions so as to cater to
the increase in demand. This strategy is best suited if the increase in demand is of a permanent
nature.
Although productivity would result in better profitability, service managers should not push it
so hard that quality is affected in some or the other way. It might be that the quality delivered
is the same but the customer has perceived a reduction in quality. Therefore, one has to balance
out between productivity, standardized quality and customer.

288 LOVELY PROFESSIONAL UNIVERSITY