call centres

Contact Centre – Supports interaction with customers over a variety of media, including but not necessarily limited to telephony, e-mail and internet.

INBOUND call centre: exclusively or predominately handles inbound calls…call initiated by customers.

Outbound Call Centre: One in which call center agents make outbound calls to customers or sales lead.

Blended call centre: Combining automatic call distribution for incoming calls with predictive dialing for outbound calls, it makes more efficient use of agent time as ach type can handle the overflow of the other.

Criticism from callers:

- Operators working from a script.

- Non-expert operator(call screening)

- Incompetent or untrained operators

- Overseas location with language and accent problems.

- Automated queuing systems – resulting in long holding times.

- Complaints that departments of companies do not engage in communication with one another.

- Deceit over location of the call centre –allocating overseas workers false English names..

- Requiring the caller to repeat the same information multiple times.

Criticisms from Staff:

- Close scrutiny by management (frequent call monitoring)

- Low compensation

- Restrictive working practices

- High Stress

- Repetitive job task

- Poor working conditions

- Impaired vision and hearing problems

- Rude and abusive customers.

Key customer benefits to call centres:

-convinient customer access to the services required

- a positive experience from skilled operators.

- accurate and appropriate responses

-high level of customer satisfaction

-improved efficiency

-Monitor performance.

Leverage

In financing decisions have two components. First, to decide as to how much total funds are needed & second, to decide the sources or their combinations to raise such funds. The total quantity of funds needed, however, depends upon the investment decisions of the firm. Given that the firm has good estimates of how much capital funds are needed, the problem then remains one of determining the best mix of different sources to be used in raising the required funds. The process that leads to the final choice of the capital structure is referred to as the capital structure planning.

CONCEPT OF LEVERAGE:-

The term leverage, in general refers to a relationship between two interrelated variables. With reference to a business firm, these variables may be costs, output, sales revenue, EBIT & EPS. In financial analysis, the leverage reflects the responsiveness or influence of one financial variable over some other financial variable. It helps understanding the relationship between any two variables.

The functional relationship between the sales revenue and the EPS can be established through operating profits (EBIT) as follows:

LEFT HAND SIDE RIGHT HAND SIDE

Sales Revenue EBIT

(-) Variable Costs (-) Interest

Contribution PBT

(-) Fixed Costs (-) Tax

EBIT Profit after tax

The Left hand side of the above presentation shows that the level of EBIT depends upon the level of sales revenue & the right hand side of the above presentation shows that the level of profit after tax or EPS depends upon the level of EBIT.

The relationship between sales revenue and EBIT is defined as Operating leverage and the relationship between EBIT & EPS is defined as financial leverage. The direct relationship between the sales revenue and the EPS can also be established by the combining the operating leverage & financial leverage and is defined as combined leverage.

The basic objective of financial management the maximization of share holder’s wealth requires the maximization of market price of the share by maximizing the EPS.

Priority Rules

• Possible priority Rules

• First come First Served (FCFS) :Jobs are processed in the order in which they arrive at a machine or work center.

• Shortest Processing time (SPT) : Jobs are processed according to processing time at a machine or work center, shortest job first.

• Earliest Due Date (EDD) : Jobs are processed according to due date

• Critical Ratio : Jobs are processed according to the smallest ratio of time remaining until the due date to processing time remaining.

• Slack per operation (S/O) : Jobs are processed according to the average slack time (time until due date minus remaining time to process).

• Rush :Emergency or preferred customer first.

• Priority rules can be classified as either local or global

• Local rules take into account information pertaining only to a single workstation.

• FCFS,SPT,EDD are local rules.

• Global rules take into account information pertaining to multiple workstations.

• Effectiveness of any given sequence is judged using the following performance measures:

• Jobflowtime: length of time a job is at a particular workstation or work center.ie length of time that begins when a job arrive at the workstation and ends when it leaves the workstation.

• It includes not only the actual processing time but also any waiting time to processed,transportation time between operations.

• Job lateness :length of time the job completion date is expected to exceed the date the date the job was due or promised to a customer.

• It is the difference between the actual completion time and the due date.

• Make span :total time needed to complete a group of jobs from the beginning of the first job to the completion of the last job.

• Average number of jobs: Jobs that are in a shop are considered to work in process inventory

• Average number of jobs = total flow time / Make span

Line balancing and plant capacity

Sequencing Jobs through two work centers:

• Johnson’s rule : is a technique that mangers can use to minimize the make span for a group of jobs to be processed on two machines or at two successive work centers.

• It also minimizes the total idle time at the work centers.

• For the technique to work several conditions must be satisfied:

• 1.Job time must be known and constant for each job at each work center.

• Jobtime must be independent of the job sequence.

• All jobs must follow the same two step work sequence.

• Job priorities cannot be used.

• All unit in a job must be completed at the first work center before the job moves on to the second work center.

• Determination of optimum sequence involves the following steps

• List the jobs and their times at each work center.

• Select the job with the shortest time.if the shortest time is at the first work center schedule that job first, if the time is at the second work center schedule the job last.

• Eliminate the job and its time from further consideration.

• Repeat steps 2 and 3 working toward the center of the sequence and all the jobs have been scheduled.

• When significant idle time at the work center occurs job splitting at the first work center just prior to the occurrence of idle time may alleviate some of it and shorten throughput time.

Plant Capacity:

• Capacity can be defined as products or productive resources per a particular unit of measure.

• Capacity can be defined as a measure of the ability to produce or serve that is having enough worker or equipment time to do the job.

• Capacity utilization is a measure that should indicate to what degree he potential capacity is used.

• Utilisation =Number of direct productive hours per

• day

• -------------------------------------------------------

• Total number of scheduled hours per day

Line balancing:

• The process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements.

• This minimizes the idle time along the line and high utilization of labor and equipment.

• Idle time occurs if task times are not equal among workstations;some stations are capable of producing at higher rates than others.

• Lines that are perfectly balanced will have smooth flow of work as activities along the line are synchronized to achieve maximum utilization of labor and equipment.

• The major obstacle to attaining a perfectly balanced line is the difficulty of forming task bundles that have the same duration.

• The major obstacle to attaining a perfectly balanced line is

• difficulty of forming task bundles that have the same duration.

• Cause of difficulty is that differences among elemental task lengths cannot always be overcome by grouping tasks.

• Required technological sequence may prohibit otherwise desirable task combinations.

• Cycle time : the maximum time allowed at each workstation to complete its set of tasks on a unit.

• Minimum cycle time is equal to the longest task time and the maximum cycle time is equal to the sum of task times.

• Output rate = Operating time per day

• -----------------------------

• Cycle time

• Minimum number of stations=sum of time /cycle time

Scheduling

• Scheduling : establishing the timing of the use of equipment ,facilities, and human activities in an organization.

• Scheduling operations

• 1) Scheduling in High Volume systems

• High volume systems are characterized by standardized equipment and activities that provide identical or similar operations on customers or products as they pass through the system.

• Flow systems : High volume system with standardized equipment and activities.

• Major aspect in flow system is line balancing.

• Scheduling for the flow system is known as Flow shop Scheduling

• Success of flow system depends on Process and product design,preventive maintenance,minimization of quality problems, reliability of timing supplies.

• 2)Scheduling in low-volume systems

• Products are made to order and orders usually differ considerably in terms of processing requirements,material needed ,processing time and processing sequence and set ups.

• Job-shop Scheduling : scheduling for low volume systems with many variation in requirements.

• Job shop processing give rise to two basic issues for schedulers:

• How to distribute the workload among work centers.

• What job processing sequence to use.

control groups

Quality Circle

A quality circle is a completely voluntary group of 6 to 8 workers of a shop or who meet regularly during company time once every fortnight or every month under the leadership of a trained foreman or section head to examine work related problems that affect the quality of output and to recommend to the management possible solutions to those problems.

Characteristics of quality circles::

It harmonizes the work

It removes barrier of mistrust

It is voluntary

It is participative

It is group activity

It has management support

It involves task performance

It is not a forum for management to unload all the problems

Objectives of quality circle

To make use of brain power of employees in addition to their feet and hand

To improve mutual trust between management and employees union

To promote participative culture which is the essence of quality circle concept

To improve the quality of the organization

Steps involved in quality circle

Identification of problem

Selection of the problem

Analysis of the problem

Generating alternative solutions

Select the most appropriate solution

Preparation of action plan

Approval of the management

Implementation

ADVANTAGES OF QUALITY CIRCLES

Improvement in quality

Increase in productivity

Better house keeping

Cost reduction

Increased safety

Better communication

Effective team work

Better mutual trust

Disadvantages of quality circles

Lack of management support

Time required to implement

Failure to hire consultants

Improper composition of quality circles

control charts

CONTROL CHART

Control chart is a time ordered plot of representative sample statistics obtained from an ongoing process.

It has upper and lower limits called control limits, that define the range of acceptable.

Conversely if the data point that falls outside of either limit will would be taken as evidence that the process output is non random. Not in control.

Purpose of a control chart is to monitor process output to see if it is random.

SPC uses control charts to determine if a process is within the controlled parameters:

1)if it is determined that the process is out of control

2)SPC provides the opportunity to investigate and determine the cause of this condition.

3)when the root cause of the problem s determined the strategy can be identified to correct it.

Control chart is a time ordered plot of sample statistics used to distinguish between random and non random variability.

Basis for the control chart is the sampling distribution.

Control limits : the dividing lines between random and non random deviations from the mean of the distribution.

Control charts have two limits that separate random variation and non random variation.

Larger value is upper control limit and lower value is the lower control limit.

Characteristics of control charts

A nominal value or centre line .

Two control limits used to judge whether the action is required ,an UCL and LCL.

Advantages

Simple and effective

After the process is in statistical control its performance can be further improved to reduce variation.

There are four commonly used control charts .

Two are used for variable(mean and range charts)

Two are used for attributes.

Attributes :generates data that are counted .( no.of defectives,no of calls per day)

Variable : generated data that are measured .(amount of tie needed to complete a task , length or width of the part.

Control charts for variables

Two types of control charts for variables are:

Control charts for means :monitor the central tendency

Control charts for range : monitors the dispersion of a process.

Mean charts: it can be constructed in one of two ways

The choice depends on what information is available.

Range control charts: are used to monitor process dispersion.

CONTROL CHARTS FOR ATTRIBUTES

Control charts for attributes are used when the process characteristic is counted rather than measured.

Two types of attributes control

Where the nature of product is such that the characteristic cannot be measured quantitavely , the items are classified only defectives and non defectives at the time of the final inspection.

The defects can be measured in any of the following two ways:

1)number of defective items are taken in different samples.

Here p chart or np chart is used.

2)number of defects in one item.in this case C chart is used.

pChart (fraction defective)

When observations can be placed into one of two categories.

These charts are constructed by recording at least 20successive inspections.

Observations can be classified as

Good or bad

Pass or fail

cCharts

cChart –used to monitor the number of defects per unit.

Goal is to control the number of occurrences per unit.

Ex: scratches ,chips,dents or errors per item

cracks or faults per unit of distance

breaks or distances per unit area

calls,complaints,failures, equipment breakdowns.

Acceptance Sampling

Acceptance sampling is a process of inferring the quality of a large number of items ( a batch or lot) before or after a process to judge conformance with the predetermined standards.

It might be used by the customer to evaluate the quality of incoming materials or by a producer to evaluate the quality of outgoing product.

If number of defective items in the sample is greater than some specified level it means that the batch probably has an unacceptable number of defective items and we reject it.

If the number of defective items in the sample is less than or equal to the specified number the batch is deemed to be of acceptable quality.

Average outgoing quality: when a sampling plan rejects a lot .The lot may be subjected to 100% inspection. Any defectives found in the lot replaced by good items so that the lot contains all the good items.

AOQ= average number of defectives * 100

_____________________________

no of items in lot

Accepted quality level: it represents maximum proportion of defectives which the consumer finds acceptable.

It is the maximum percent defectives that for the purpose of sampling inspection can be considered satisfactory.

Lot tolerance percent defective: the upper limit on the percentage of defects that a customer is willing to accept.

Consumer’s risk (beta): the probability that a lot containing defects exceeding LTPD will be accepted.

Producer’s risk (alpha): the probability that a lot containing accepted quality level will be rejected.

Operating Characteristics Curve

The probability curve that shows the probabilities of accepting lots with various fraction defectives.

OC curves describes an important feature of acceptable sample plans.

The following can happen when we go for acceptance sampling plans.

We accept good lots

We reject bad lots

We may accept bad lots

We may reject good lots

When good lot is rejected the error is known as type 1 error

Risk of rejecting a good lot based on the evidence is known as producer’s risk.

When a bad lot is accepted as a good lot based on the sample evidence the error is known a s type 11 error and the risk of accepting the bad lot as good in known as consumer’s risk (beta).

OC curve is used for :

Design and development of sampling plans

Evaluation of sampling plans

Comparison between sampling plans

Types of acceptance sampling

Single sampling: In single plan one random sample is drawn from each lot and every item in the sample is examined and classifies as either good or defective.

Double sampling plan: allows for the opportunity to take a second sample if the results in the initial sample are inconclusive.

Multisampling plan : is similar to double sampling plan except more than two samples may be required .