Operations Management

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Selling fixed telephony services

MBA 670 - OPERATIONS & QUALITY MANAGEMENT

Professor: Dr KaramanosIoannis Treppides

Telepassport Telecommunications

Lecture 1

The operation which will form the basis for my assignment is the provision of fixed telecommunication services at Telepassport telecommunications Cyprus.

Telecommunication is an essential need in our days. A very big percentage of houses and all companies have at least one fixed telephone line in different variations: Analog or digital. Telepassport can provide this service to the public of Cyprus.

Selling fixed telecommunication services is the main task out of all sale activities. The way the operation works is the following: Either we contact the customer by telemarketing or the customer contacts us on the phone number or via e-mail or through posted in our advertising media. The cuistomer visits our shop or the shop of an authorized partner or we visit the customer at his/hers premises. The customer signs the relevant forms and in a few days we connect the phone line.

This operation is characterized as the most important for various reasons. First is the need for communication. Even though mobile telephony entered for good in our lives, the fixed telephone is still in use mostly because of its cheaper rates. Second is because it is the service that generates the most profit and last is because a lot of our other services are provided through the telephone line, eg broadband services.

Input – Transformation – Output model

Input

The transformed input recources are the customers, Information on the forms and telephone lines.

Operations and Quality management Page 2


The transforming recources are – Sales Manages, sales people, customer care people and all equipment needed to process the information like computers and other hardware.

Transformation

The transformation process is mailny the input of the customer information in the system and the activation of the phone line.

Output

The output is the provision of the telephone service that the customer enjoyes.

The 4Vs

Volume

The volume of such an operation is commonly high. But in this case it is low varying from 60 to 70 new connections each month. This could be considered as not so good for a telecommunications company but since Telepassport is a small company even if the volume is below the expected it is still the expected one.

Variety

The variety of a telephone service is low because it is a relevantly standardized service always offered the same way. There are only two types of telephone lines, analog and digital, and telephony can be done either through the traditional networks or through the internet (VoIP).

Variation



The variation in demand is medium to low because of some increased demand in periods like September – October or January – February when schools open or new semesters start at colleges and universities where the need for internet generates need for new phone lines.

Visibility

The visibility of the service is low due to the fact that a telecommunications company uses the front office back office model. The customer can see the shop and have interaction with the sales people, the customer care and the tellers but will not be seeing the technical work needed for the telephone to work.

Lecture 2

The polar diagram

Required

Actual

The most important objectives are cost and quality. These are the factors that differentiate Telepassport from other telecommunication companies, the fact that services are cheaper with high quality. Then another important objective is dependability and that is an area that needs improvement. But it can only be improved as the company gets larger and more staff that can work on shifts will be available so the service will eventually be available for 24 hours a day.



The operation required performance is different than the actual, each point for its separate reason.

Quality is a bit lower than the required because of the dependency on other telecommunication companies. Sometimes the quality of the phone calls of other providers we terminate our calls drops so the customer feels that our quality drops.

A big emphasis on low prices makes it possible to achieve our goals on cost.

The dependability of our service is a bit lower than required because of the lack of 24 hour technical service.

A telecommunication service cannot be flexible as it is one mostly standardized product. So the medium to low objective is met.

As a telecommunications provider we require our service to be of high speed but the procedures needed to activate a phone line are really time consuming.

Lecture 3

Process type

The process type of selling fixed telecommunication services can only be characterized as mass service because of the standardization of the service. The difference here is that the volume of sales is not that big as most telecommunication companies.

Compatibility with the four V’s

This is totally compatible with the four V’s of the operation even though there is the problem of low volume that it should be higher.

Product – Process Matrix



By looking at the Product Process Matrix we can conclude that the operation falls out of the diagonal line of fit process to volume/variety and out of pocket cost is generated. This is expected to be solved in the future by increase in sales volume.

The operation’s overview process map

Telepassports operation’s overview process map is the Stock Customer Operate. The way the sales people operate is the following: The sales person tries to find customers through telemarketing, arranges an appointment with the customer and then the various forms are signed. Sometimes there are visits to the shop by customers but they are not arranged or create any queues and they are served by the idle sales people that are at the sho at that point. If all sales people are uot of the sho serving other customers the customer that comes in it is served by the customer care department.

The operation’s supply network



The operation’s location

Telepassport Telecommunications’ shop is located at a not very busy road behind Makariou Street. It is not the best place for a shop to be because of the very few people going around by making the company unable to get customers that passes by. It would be better for the company to have shops in all cities in main commercial streets in order to attract more customers that pass by. A presence in this kind of streets show that the company is strong and people trust it for their services. This is of course in the plans for the future as the company is growing. This fact though makes it easier to operate the way we do at this point that is contacting potential customers and visiting them at their premises. That is because we are not at a busy road and not very much affected by traffic and the rent there, is lower than a busy road.

Lecture 4

The operations Layout

The operation from all things mentioned can only be characterized as a fixed position layout because the customer remains fixed at his position (house, company) and we visit him. The process type of selling fixed telecommunication services is a mass service. This is not compatible with the fixed position layout as it does not allow many customers to be processed within a specific time. This though might change in the future as the company is growing.

Main elements of the technology



The main elements of technology involved in selling the product are the computer, telephone, fax, the internet and intranet, the CRM program and the company’s database management program After the process of selling the service and at the provision part we need our telephone service platform, the hub and the lines rented by Cyta to get connected to the customers phone.

Utilizing the job design techniques described in the chapter, assess critically the situation in your selected operation. Are any improvements needed?

The job design technique utilized by Telepassport is the division of labour with the use of job enlargement. Each person is responsible for more than one task needed to be done. For example one person is responsible for the marketing of the company and at the same time is involved in sales or another person is a technician and is also in the customer care support.

There is a lot of room for improvement and it is actually done as the company is growing. More stuff in order to undertake tasks that are done in part by some others is needed.

Lecture 5

The type of scheduling adopted by Telepassport is externally oriented. Once the order comes in the relevant forms are sent to Cyta in order to activate and rent us the line and then we provide the service. This is in line with the process map as we don’t have anything ready until the customer applies for service provision.

The method of forecasting the demand is usually time series forecasting and casual modelling. Taking into account the sales of previous years and the events happening or are likely to happen (e.g. the financial crisis) the demand is forecasted.

Lecture 6

Not many inventories are kept in this operation because of its type. We offer services that are only provided when needed. There is though an inventory of the application forms needed to be signed by the customers. There are several types of forms that are printed through a print house as they cannot be printed by the conventional printers and photocopy machines we use.

We always try to maintain a large amount of these forms at our office so they never ran out. They don’t take much of a storing space anyway. When any one of the four



sales people notices that the amount of these forms is becoming low we ask the sales manager to order more.

Our main supplier is the Cyprus Telecommunications Authority (Cyta). The phone lines that we use belong to them so most of the services that we provide our customers are passing by their network. The relationship between Telepassport and Cyta is controlled and protected by the government as they are also competitors.

The selection of the rest of the suppliers is mostly made through our customers list. The philosophy that we use is that “if you give us we will give you”. This happens with all the companies we cooperate, in any department. This gives us the chance to get better prices. If though we find better prices from other suppliers we will of course choose them but we will again try to make them our customers as well so the relationship will be sustained.

Lecture 7

Telepassport is not using any MRP or ERP system. The services that we can offer are just there, maintained by our servers. The phone lines that we use (the cost) are only rented by Cyta once the customers ask for it. Everything from the selling of services up to provision is done after the customer orders it. So these systems are not something that would benefit the company.

Telepassport as a service operation is using a lean pilosophy. Stock less production is achieved by renting the phone lines only when needed and resources (stuff) are used to the maximum. Each person has many responsibilities so resources are never idle.

Lecture 8

What are the characteristics of product or service quality for your chosen operation?

Functionality: constant communication connectivity, value adding services (e.g. ability to be in the telephone catalogue, second line, caller line identification).

Appearance: Premises appearance, appearance of the sales people and of the technician that might visit the clients’ premises.

Reliability: The ability to hold a line active for the whole conversation time.

Durability: Stability of price, services offered and of the line.



Recovery: When a line fails to work, how long does it take to be fixed and be useable again?

Contact: knowledge of and courtesy the sales people and customer service people.

How could quality be controlled so that to ensure operation within the acceptable specification range?

A quality control system is not in place. What is actually happening is that whenever there is a problem the technitians fix it. So here are some suitable measures the company could use in order to control quality.

Quality Characteristics

Variables Attributes

Functionality On a scale from 1 to 10 how Satisfactory is the sound quality?

Is the line always connected or are there any failures?

Appearance Percentage of employees with good behavior, on a scale from 1 to 10 how clean is the service area?

Are the premises of the company nice-looking?

Reliability What is the percentage of failures during a phone call?

Does the line always remain active during a phone call? (or is it interrupted during the call?)

Durability How often do the prices for calls change?

Does the phone line conform the quality standards?

Recovery How long does it take from the time a problem is reported until the time it is fixed?

Do customers feel that their problems are dealt on time?

Contact How well treated do the customers feel? On a scale from (1 to 10)

Do customers feel that their problems are in a professional way?

If the organization decides to implement quality controls and all these measures are implemented, quality of the service can be controlled in a very good manner. Some



standards have to be set (e.g. in the scales from 1 to 10, 6 is an acceptable point. Below that, corrective actions have to be taken, above that mean the company is performing better than expected.)

Lecture 9

The only measure for performance the operation has is a specific number of new connections per month. That is 60 new phone lines per month. Of cource more measures should be implemented since we can not be sure if a new phone line would be profitable or not since some phone lines belong to companies with a lot of calls per month (very profitable) and some phone lines belong to houses that very rarely use the phone lines.

A benchmark against the rest of the telecommunication companies shows Telepassport as being far below the rest. The reason for this difference is the size of the company as we are comparing companies with large amounts of employees and service shops and companies that offer more services with a small sized company with only one service shop and few sales people.

These measures are not enough though since they don’t say much. The balanced score board is a measure that should be implemented since it will measure how the company performs against all important aspects and from then on it will be a great way to get indications for the increase or decrease of performance of the company.

Importance Performance Matrix

Measures 1 2 3 4 5 6 7 8 9 10

Customer satisfaction

Quality of sound



Time from submission of forms to provision of service

Cost of labor

Productivity of salespeople

Cost of service

VoIP service through the phone line

Approach to improvement

The approach to improvement of the operation is continuous. Breakthrough approach requires a large budget, something that the company does not have so what the operation can do is to slowly slowly grow. Of course this is not an easy task for a small business in a market where there is a semi-governmental company that owns more than 90 percent of the market share but the operation has always been trying to grow.

Lecture 10

The most urgent area of attention of the operation is the Voice over IP service through the phone line. It is a very common service among the clients of other companies since it allows the clients to make cheap phone calls to international destinations. Telepassport also has that service but the way a customer can use it is very complicated and not very efficient. So the project will be to implement a new VoIP system that will provide cheap phone calls to the customers with an acceptable sound quality and an easy way of using it.

The project objectives



In order to set our objective we need to state exactly, what is the product we want to offer to the public and when we want it to finish. The product will be available to the people through a specific four digit number that they will have to dial on their telephone (This will redirect the phone call to an internet telephone provider) and then dial the number they want to talk to. There will be a specific pricelist with a price for each country that will be cheaper than all standard charges to those destinations.

Stakeholder analysis

Work Breakdown Structure (WBS)



Proposed project organisation

The teams involved in the project will consist of the Sales Manager that will be the Project manager, one person from the technical department that is also a programmer and a person from the sales department. The project will start on the first of June 2009 and will end on the thirty first of December 2009. The first thing we need to do is to ask for a number from the Commissioner of Telecommunications. Then find “good VoIP telecommunication providers through the world. Make the tests with the providers (if the sound quality is acceptable and if it will always have available lines). Do the available programming and activate the number to redirect the telephone calls to the VoIP provider and test. Train the personnel and launch the service.

Suitable scheduling of activities (Gantt chart)

Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09Ask for the phone number fom the commisioner ====== Find the VoIP Providers ====== ====== Testing ====== ====== Programming and activation of the number ====== Training ====== Launch of the Service - Trial Period ====== Launch of the Service - Actual Launch ======

Suitable project communication plan


VoIP service through the phone line

Setup the system in order to support the

service

Train the Customer Service people and

the Salespeople

Implement the new System

Installation Testing


Communication is really important for any project to succeed so from the beginning until the end of the project good communication needs to be maintained at high levels with all the stakeholders.

The first thing to do is a general meeting of the company’s employees in order for the project manager to present the project, select the team and split the activities.

A good communication between the project team and project manager has to be maintained through the project and from the project manager all of the departments and the managing director of the company will be informed about the process.

When the project will be close to the end (October) then the company will need to communicate the provision of the service and the date of the launch with the clients and any prospective clients.


Operations Management

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