In this section, we carry out a simulation of the procedure to perform the value improve- ment system of services and examine the effectiveness of the proposed value improvement system.
Here, as specific services trade, we take up a fictitious household appliance store, DD Company. This store is said to be a representative example providing “a thing and services” to customers. The store sells “things” such as household electrical appliances, which are essential necessities of life and commercial items used in everyday life. In addition, it supplies customer services when customers purchase the “thing” itself. DD Company was established in 1947 and the capital is 19,294 million yen, the yearly turn- over is 275,900 million yen, total assets are worth 144,795 million yen, the number of the stores is 703 (the number of franchise stores is 582 on March 31, 2007), and the number of employees is 3401. The store is well known to the customers on the grounds that it would make a difference with other companies, by which the management technique is designed for a customer-oriented style, pursuing customer satisfaction. For example, salespersons have sufficient knowledge about the products they sell and give suitable advice and suggestions according to customers’ requirements, which often happens on the sales floor. We conducted a survey for DD Company. The simulation was based on the results of a questionnaire survey and performed by applying the PMS for the value improvement of services shown in Figure 4.2.
4.4.1 Stage A: Structural modeling
Figures 4.3 and 4.4 show the structural models with respect to the functions composing customer satisfaction, and the cost showing the use of resources.
4.4.2 Stage B: Weighting and evaluating
Table 4.2 shows the importance degrees of resources for functions of customer satisfac- tion, which is obtained by consensus among decision makers (specialists) with know-how deeply related to the value improvement of services.
By Table 4.4, it is understood that the distributed amount for four resources and the real ratios, which are used to attain customer satisfaction related to six functions, are pro- vided with the four resources.
From this, each of the value indices with respect to the respective resources used to sup- ply customer services, for which human resources, material resources, financial resources, and information resources are considered, is obtained by using Tables 4.1 through 4.4 and Equation 4.4.
(1) Value index of Human resources = 45.64/42 (= 1.1) (2) Value index of Material = 4.08/28 (= 0.14)
(3) Value index of Financial = 13.19/12 (= 1.08) (4) Value index of Information = 36.37/18 (= 2)
From the value indices for the resources mentioned above, the chart of value control graphic structure is depicted as shown in Figure 4.5. Thus, it may be concluded by Figure 4.6 that the following results with respect to the value improvement of services from the viewpoints of function and cost are ascertained.
(1) In this corporation, there is no need for doing the value improvement related to each of human resources, financial resources, and information resources because three of all four resources are below the curved line, implying a good balance between the cost and the function of services.
(2) For material resources, it will be necessary to exert all possible efforts for the value improvement of the resource because the value index is 0.04, which is much smaller than 1.00.
(3) On the whole, the total value index of services is counted 1.23 as shown below, so that the value indices for four resources are included within the optimal zone of the chart of value control graphic structure shown in Figure 4.5. Therefore, it could be concluded that the corporation may not have to improve the value of services of their organization.
4.4.3 Stage C: Integrating (value indices)
At the integrating stage, MADM based on Choquet integral (Grabish, 1995; Modave and Grabish, 1998) can be introduced for the value improvement of services, and the total value index of services is obtained by integrating the value indices of the four resources as follows:
Total value index of services=w1×1 1. +w2×0 14. +w3× + ×
= × + × + × + ×
1 08 2
0 46 1 1 0 11 0 14 0 17 1 08 0 26 2 . 4
. . . .
w
==1 23. As a result of the simulation, the value of services of DD Company indicates a considerably high level because the total value index becomes 1.23 (>1.00), which belongs to the optimal region.
66Handbook of industrial and systems engineering
Table 4.4 Importance Degrees of Resources for Functions of Customer Satisfaction
Use of resources
Function (Customer satisfaction)
Employee’s behavior (0.31)
Management of stores (0.08)
Providing customers with information (0.11)
Response to customers (0.27)
Exchange of information (0.18)
Delivery services (0.05)
Ability to explain products Telephone manner Attitude to customers Sanitation control of stores Merchandise control Dealing with elderly and disabled persons Campaign information Information about new products Announcement in emergencies Cashier’s speed Use of credit cards Discount for a point card system Settlement of complaints Communication among staff members Contact with business acquaintances Information exchange with customers Set delivery charges Delivery speed Arrival conditions Integrated evaluation values
0.096 0.065 0.149 0.026 0.038 0.016 0.039 0.057 0.014 0.059 0.024 0.038 0.015 0.056 0.038 0.086 0.031 0.008 0.012 Human
resources
Employee’s salaries
70 70 80 20 20 40 30 30 30 30 80 30 20 20 20 20 45.64 (%)
Cost of study training for work Employment of
new graduates/
mid-career workers
6.72 4.55 11.92 0.52 0.76 0.64 0.42 1.77 0.72 1.14 11.92 1.68 0.76 1.72 0.16 0.24
67apter four:PMS for value improvement of services
resources products Rent and utilities Depreciation
and amortization
0.65 0.26 1.14 0.32 0.78 0.93
Financial resources
Interest of payments
20 20 20 20 20 20 30 30 30 30 30 20 20 30 30 13.19 (%)
Expenses incurred in raising funds Expenses
incurred for a meeting of stockholders
0.52 0.76 0.32 0.78 1.14 0.28 1.77 0.72 1.14 1.68 1.14 1.72 0.62 0.24 0.36
Information resources
Communication expenses
30 20 20 50 30 40 60 60 50 40 40 40 20 40 50 60 50 50 50 36.37 (%)
Expenses for PR Costs for
installation of a system
2.88 1.3 2.98 1.3 1.14 0.64 2.34 3.42 0.7 2.36 0.96 1.52 2.98 2.24 1.9 5.16 1.55 0.4 0.6
68 Handbook of industrial and systems engineering
About DD Company, Nikkei Business announces that the store scored high on the evaluation. The store advocates that customers “have trust and satisfaction with buy- ing the products all the time.” Also, the store supplies “attractive goods” at “a reason- able price” as well as “superior services,” as a household appliance retail trade based on this management philosophy. Furthermore, the store realizes a customer-oriented and community-oriented business, and supplies smooth services reflecting area features and scales advantages by controlling the total stock in the whole group. From this, it can be said that the validity of the proposed method was verified by the result of this simula- tion experiment, which corresponds to the high assessment of DD Company by Nikkei Business, as described above.