Demand may exceed the maximum capacity, the optimum capacity, or it may be below the optimum capability of a company. Besides, demand and supply may be well balanced at the level of optimum capacity. Therefore, for an organization to meet its customers’ needs, it must find ways to manage both the demand and the capacity. This paper will examine a service organization specializing in communication services known as “Flo-com communications.” It will explain three strategies that the organization can use to manage demand and three to manage capacity.
The first strategy to manage demand is segmentation and an appointment system. Basically, an organization will operate on appointments because of high demand and saving time. However, this may not always work because customers fail to show up or arrive late (Bordoloi et al. 306). To ensure every customer is served, the appointment system may be revised. This can be done by; charging customers who fail to show up a fee or reminding them about the appointment in advance. By this, customers will honor the appointments, and the organization will have managed its customers such that they will not flock all at the same time. After Flo-com used this strategy, it has been able to serve more customers than before with satisfaction.
The second strategy is promoting off-peak demand. Often, demand will be high during the high peak seasons. For instance, during holidays, people are likely to use communication services more. To manage demand, consumers can be urged to settle their communication-related issues when the demand is low. This will allow the organization to have an optimum demand during the high peak season. As a result, it will serve its customers better. After using this strategy, Flo-com convinced a good number of its customers to seek their services when demand is low, and it was successful.
Thirdly, offering price incentives manages demand. It aims at reducing prices to allow customers to buy services earlier. In this case, Flo-com may offer price incentives during the off-peak season. This means if customers seek services during the off-peak season, there will be a manageable number of customers during the high seasons. Although this strategy worked for Flo-com, there was a decline in profits as it had to reduce its prices.
To manage capacity, Flo-com can profitably schedule its personnel. It can be done by allocating time for employees and managing them to ensure they use time effectively. Also, it can consider having night shifts and day shifts, thus ensuring every customer is served. This strategy worked perfectly for Flo-com. However, the company had to invest in salaries.
The second strategy is cross-training employees. It involves training them to manage more than one task. It saves time, and so many customers are served. Since some customers have several needs, they can quickly serve the customer if they have more than one skill instead of going through several desks to be served. It also reduces wastage of time. This strategy was challenging because it required the company to invest in employees; however, it has positively impacted the organization.
Lastly, using part-time employees is another strategy. It can be put into practice during the high peak seasons when the demand is high. The part-time employees will help in maximizing the number of customers served. Hence, the company will be able to offer services in large quantities. Also, high-quality services will be provided because the capacity is available.
Bordoloi, Sanjeev et al. Service Management. 9th ed., Mcgraw-Hill Education, 2019.