Exercise 4

Three elements of service- product bundle:

A.) Tangible service- The tangible service of Wegmans food store is that customers always have available to them what they are looking for. The shelves are always stocked so items are always there.

B.) Intangible or Psychological benefits of the service- At Wegmans the on tangible benefits of the store are people feeling welcomed and enjoying their shopping experience: the benefits include being able to find what they need.

C.) The physical goods- The physical goods at Wegmans are all of the groceries that are in the store available to customers. Wegmans also offers a deli where you can purchase food that is made to order.

Interaction of Wegmans Customers

Which cell does Wegmans operate in on the service matrix?

The cell that Wegmans food store operates in on the service matrix is the co- routed service. This grocery store offers a moderate amount of choices to the customers to choose from. When a customer comes in the store and they are looking for pasta, they have many types of pasta to choose from, such as spaghetti, ziti, linguini and so on. Customers also have the option to choose which brand of pasta they prefer.



Wegmans Customer Service Associate


Do they use self service? Do they use technology? Do they use focused operations? How do they support employees?

The type of customer contract at Wegmans is high contact because employees help customers when they are done shopping by ringing them, up at cash registers. Employees must be friendly and willing to help out the best that they can . Also, customers are helped at the deli section in Wegmans or if they have a question about something they cant find in the store , there is always someone around who is willing to help. 

Customers interested in Wegmans Products and Services



What types of service recovery and guarantees do they offer?

The type of service recovery and guarantees that Wegmans offers is the opportunity to return items to the store, if customers are not satisfied. For instance, if a customer purchased milk at Wegmans and were not satisfied, they can bring it back and exchange the milk for a different one, or just get their money back . This works for any other items in the store. Rain checks are also a guarantee that Wegmans offers. Rain checks are a way for customers to get the product they need at a lower price if the store runs out of a sale item.

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Assignment: Comment on “What Amazon Fears Most: Diapers”

VERSUS

                            

When we look at Quidsi, parent company of Diapers.com there are a few things that stick out that we covered in class thus far; their product flow, their approach to order fulfillment, and their independent demand inventory.

Product Flow

The product flow process that Diapers.com uses is job shops under the batch flow system. They are not actually making diapers and other products but the batches or small lots represent customer’s specific orders. They have about 50,000 different products they provide for their very specific customer base which are mothers. So the available of their very specific products and the delivery of these goods, are the services and product they provide for their customers. 

Order Fulfillment

Diapers.com’s approach to order fulfillment is make-to-stock. They specify their product line as baby products. The customer then request a product from their inventory and the product is delivered to the customer. They have a strong commitment when it comes to shipping, continuously striving to provide customers with quicker shipping times and from a company standpoint they’ve created a software system to help them save on shipping cost.

Independent Demand Inventory

Diapers and other baby product are independent demand products. Other products don’t influence their demand, babies do. When we look at their management of their inventory, they appear to use the continuous review system, because the article stated, they like to keep more than enough inventory. Quidsi has a 1,250,000-square-foot warehouse to house their massive inventory with room to spare. The CEO, Marc Lore, developed an algorithm for figuring when and how much stock to reorder for a particular item. Their goal was to find a good medium between having enough room and not spending too much on the inventory.

Exercise 3 PROCESS SELECTION

This blog post deals with the process selection decision making policy of Wegmans.  This policy does not directly correlate to all stores under the Wegmans name.  The store interviewed and studied is Wegmans of Woodbridge, NJ.

Question 1:

The product flow that Wegmans uses is a batch flow which is when they make products by the bundle.  In a food distribution store it is always good to have more than less so you never run out.  In a batch flow you order by the bundle and mass produce products so they are enough for the customers.  A batch flow is also a product that is made to order, in which food products are.

Question 2:

The type of customer order that Wegmans processes is Made-To_Stock (MTS). This option is beneficial to Wegmans because it is a supermarket so things are ordered through inventory to fulfill customers demands. Wegmans always keeps items stocked up on the shelves and in storage so that they do not run out. The other options for customer orders would not work very well for Wegmans.

Customers selecting their products

Question 3:

The Process Characteristics Matrix
Because Wegmans provide more than just groceries, it falls into 2 cells in the process characteristics matrix:
• Batch Flow/Job Shops
• Project.
In the batch flow/job shops cell, products are produced in batches or lots and the labor is more skilled and flexible in its ability to make different products. When we look at Wegmans specialty shops this comes to mind. They make different products in batches; like in the French Pastry Shop they make a variety of pastries in batches. But we also see the project cell in operation as well. In the project form of operations, products are unique and highly customized. For example, in the Cappuccino Bar and Cheese Shops, products are made to order and customized by the customer’s specific needs. Customers can order a coffee exactly how they like it and get a cheese platter made with the specific cheeses they know their guest would love.

Question 4:

Since wegmans caters to consumers as customers, their process selection depends upon what the current locals food tastes are. Wegmans has so many different brands and types of food products that it is able to cater to all peoples different tastes. Specific locations may offer foods known only to that area and may allow other stores in different locations to sell the product as well to introduce new locations to these products. The two main factors affecting process selection would include customer based selection and available food based selection.

Warehouse distribution center

Question 5:

No, the economies of scope process does not apply to Wegmans, or any supermarket for that matter. Wegmans carries a wide variety of products already to meet customer demands. Very rarely are customer requests put in for specific consumer items, however Wegmans does have a product request service. If Wegmans was to sell very few specific items I'm sure there would be some way to adopt a mass customization method however since Wegmans sells such a vast amount of different products, there is no need for an economy of scope service.