The Royal Automobile Club business overview

The Royal cable car Club business overviewThe Royal Automobile Club was founded in 1897 to tail assembly its particles with roadside assistance. It is part of a enormously competitive market where it is involved in a continual trouble with The AA and kilobyte Flag for market superiority.There atomic number 18 fundamental difficultys in RACs current operations. Customer proceeds is vital aspect of the roadside recuperation business and this is where RAC are failing. RAC attain had a rising in the return of customer complaints coupled with poor retention of customers. The RAC has to supply its dish ups and resolve quickly to all appointouts notwithstanding faces difficulty dealing with the variation in necessity.The problems were outlined by Martin Connor, the director of Operations who claimed the only big winners seemed to be the contractors who provide contentedness during the night and during periods of overloading. This is a clock time while the RACs induce guard rung are earning much despite a dismantle out in productivity.The RAC uses private contractors during weekends and at too at night times, they also supplement day patrols if the demand is unexpectedly high. As the contractors dont carry the honorable RAC branding, customer improvement was less of a priority to them. Market look had indicated that customers were less satisfied with the service provided by private contractors. The use of such contractors was also expensive, with the middling price being 36 plus.After on the moving in(p) a standard forty hour week, at busy periods staff were offered overtime or the picking of being on standby. Overtime was nonrecreational at time and a half and double on Sundays. rung had no motivation to complete work as quick as possible as they would be paid however long jobs took. in like manner the standby system was fraught with problems, staff were paid a flavorless fee of 6 per job completed. There was no difference in ante up with regard to simple jobs that would take a few transactions and much difficult jobs which could take a long time. Staff could record off at any point and would frequently do so if they were offered time consuming jobs. This would force the RAC into delegating to contractors at the much high termsThe patrol attendance rate measures how many of the jobs the RAC warrants were dealt with by their receive staff. In 1999 the rate was averaging 80%. The importance of a high comparability is underlined in the be which suggest that just a 1% falloff would cost about 1 million per year in contractors fees..The RAC has a reputation for offering high quality service a but at a high price. It faced losing its market share as a phone number of competitors surfaced. It was faced with the problem of improving its operations whilst retentivity its membership costs at a competitive price.In an item-by-item mickle the RAC was ranked 2nd to the AA in terms of customer merriment . The slender customer service factors are in the call taking and how quickly patrols are on the scene and complete the job. Due to more sophisticated call taking technology the AA was able to offer its members better customer service than the RAC.The importance of a low membership costs could not be underestimated as potassium Flag, which had poor customer service feedback from the survey was becoming a leading competitor due to its low costs. The fig up analysis shows where the RAC guide to improve.SWOT analysisStrengthsStrong brand bounteous customer baseGood profitabilityWeaknessesOld fashioned role electrical capacity easily overloaded.OpportunitiesInnovative technologyNew productsThreatsCompetitionengineering of cars improving reduction in breakdownsIncreased customer expectation manpower scheduling / Capacity management Literature ReviewIn service industries the matching of capacity and demand is particularly difficult. Capacity management plays an burning(prenominal) role in determining how effectively an organisation uses its assets to produce income. (Sun Services, 2007)Capacity management is the ability to balance demand from customers and the ability of the service pitch system to satisfy the demand. (Armistead et al, 1991)There is either too much demand for the capacity, putting a strain on resources, or too little demand, giving rise to unused capacity and a loss in revenue. This is known as the perishability factor. (Mudie et al, 2006) Both of these are an issue for the RAC due to the legion(predicate) factors that influence the demand on the patrols such as the weather.The manner in which workforce is deployed is a large determinant of the effectiveness of service organisations. Having more staff than is necessary to provide the desired train of customer service is costly and having fewer staff than is necessary risks poor customer service and the loss of current or future revenue. In an ideal scenario the smart set has just enou gh staff available to provide the desired direct of service. Temporal variation in customer demand, even within a day, compounds the difficulty of providing the ideal number of staff. One solution is the use of intend intervals of an hour or less, in conjunction with overlapping shifts, and then allowing the number of employees scheduled to change from period to period. The task of providing the right number of employees at the right time is commonly known as workforce scheduling. (Thompson et al 2006)Rotating workforce scheduling is a typical constraint satisfaction problem which appears in a broad range of work places (Musliu, 2005).Poor workforce scheduling often leads to high personnel turnover, absenteeism, resentment, poor job deed and unfit mental and physical conditions situations that translate to loss of productivity, quality and even safety (Hung, 1992)One method to solve capacity issues is to address the schedules of the workers, a re-arranged workweek tooshie be a great recruitment tool. many people are enthusiastic about receiving one or more surplus off-days per week and longer weekends (for the 4-day workweek, in that respect are 52 extra off-days per year). more(prenominal)over, fewer work days means including less time and specie on commuting and less expenses on meals and childcare. (Hung, 1992)An other factor that post affect capacity is motivation. This can be influenced by shift patterns dictated. motivating can be increased by adapting work times to undivided compulsions which can change over time, better working conditions (such as security and hygiene), creation of a team spirit or finished professional mobility. For example, highly skilled staff can act as tutors to new employees. (Chan et al, 2006). Part time workers can increase the flexibility of operations.A common trend amongst the literature is to offer discounted prices at times to level off the demand. This is a possibility for the RAC who could offer breakdown p ackages such as weekends only or off dot packages at substantially discounted prices. hawkish AnalysisRACThe basic RAC indemnity starts at 28. On average at that place patrols are able to heap 80% at the roadside. The RAC web-site has an active forum, where members can overtake with one another to give advice, this creates an online community. RAC will attend the initiatory five callouts made by a member free of way and offer priority for vulnerable motorists. Having over 2000 patrols and over 100 age experience are key selling points for the RAC. All labour and fittings costs are included in membership, so members only exact impart for the part itself. RAC advertise offers worth over 500 to try and provoke in new members, they include discounts on health insurance, roadside restaurants and UK holidays. (RAC, 2010) fleeceable FlagThe Green Flag slogan is driven by performance, Green flag compare themselves to both the RAC and The AA by advertising its average time is unde r 30 endorsements in contrast to their 40 minute average. The claim is backed up with data from 837,962 call outs. Its basic proposal begins at 20, they fix 86% of customers cars at the roadside. A key asset of green flag policies is the availability of the customer to adapt a policy to fit their own circumstances, you dont have to pay the price of other peoples problems . Green Flag offer no callout discounts to members and offer free, unlimited call-outs when you breakdown. They aim to rejoinder calls within 20 seconds. Green flag operates solely through removed contractors, which has a negative affect on its customer service. (Green Flag, 2010)The AAThe AA claim to fix more breakdowns by the roadside than anyone else they have strong customer satisfaction and boast 95% of members would recommend the firm to friends. On average the AA come through within around 40 minutes of members calls.With 3500 patrols the AA has the largest dedicated breakdown patrol force in the UK, the y attend a breakdown on average every 8.7 seconds and repair around 8 out of 10 breakdowns by the roadside. Only the AA has VIxEN, a unique on-board computer to help diagnose faults.At night, as at other times of the day, the AA serves its members with its own patrols and, as with other breakdown providers and some garage agents, when appropriate. (The AA, 2010)Strategic performance quarrysThe Objective of the RAC is to provide a fast and quality service to its members who breakdown at the roadside. To do this they need to define what the key performance indicators are and what is the expected level.A key performance indicator is a metric that allows you to evaluate whether you are meeting a certain goal. The five kpis for breakdown companies are step the level of customer service and efficiency of the recovery Cost The cost the customer has to payDependability To always have patrols ready for jobs. flexibility To adapt to unexpected rises in demand. Speed To answer calls qui ckly, patrol bring quickly, job completed quicklyRecommendations1 in every 5 jobs completed are being outsourced to contractors costing the RAC a huge centre of money and risking its reputation from its members who have expressed dissastisfaction by the service they have received from such patrols. Clearly changes have to focus around ensuring more callouts are attended by RAC patrols.To do this firstly the RAC need to arrange in new calling and dispatch process. More effective call technology can identify the patrol most suitable to undertake each job and can improve customer service relations. More effective utilisation of patrols will ease capacity issues.The overtime payments need to be re-structured so that is no longer based on a per job basis. The current system is open to abuse by patrols who would fend off difficult jobs by logging off. This a key reason for the immoderate use of contractors.The pay structure needs to adjusted, Proposed would be a grade scale for the difficulty of jobs completed, patrols could then receive a monthly indemnity based on there performance. changed to offer staff incentives and motivation to gibe customer service is top of their priority. These can include monthly bonuses or share schmes.In most cases it may be necessary to collapse some scale of gradation of jobs based on some objective assessment and to relate jobs measured on this scale to rates of pay (Wild, 1991)The comparison is reducing by as much as 3% during peak holiday season. A 1% drop in PAR costs 1 million per year in contractor fees. Holidays need to be re-reanged so that they are equally dispersed around the year. declination and January are the busiest months so there must be a limt peculiarly around this time. Monday is the busiest day of the week for the RAC with the weekend the quietist timeWorkforce schedules can also be adjusted, the current shift system doesnt work. One option would be to switch workers to a four day week. Workers could then have more kind hours and capacity could be increased at peak periods.Needs to continue its investment in materials that help drivers fix there own faults, with a particular emphasis on problems caused by wintertime conditions. This can be the most effective measure to combat capacity problems. Phone operators can try an identify the causes of problems and offer the potential for the member to fix there own vehicle.The staff at RAC are come near retirement and therefore RAC will need to attract new recruits. It is master(prenominal) that the knowledge built up by years of experience by the major(postnominal) employees is utilised to enable the training of the new younger employers to be more effective.Staff should be encouraged to present any ideas to senior management that they believe would improve operations. With attractive incentives offered for any ideas that put into practice, the job satisfaction and motivation of employees would be likely to increase.There will be a resistance to change, particularly from the patrols who are seeking more social hours and a generally easier working schedule.The diagram above shows how the proposed changes could improve the operations of the RAC. The main advantage would be seen in the flexibility of the patrols.The RAC need to communicate more effectively with members who broke down. Breakdowns can be highly disagreeable situations and therefore knowing approximately how long it will take for a patrol to arrive will be a reassurance to the member.