Thursday, October 14, 2010

Boom & Bust in Service Supply Chain

Changing the service offer (mainly driven by cost pressure) to customers won't show relevant effects directly. However over time, as management thinks everything is fine (even with lowering the service staff), the Bust comes in.

This happened with PeopleExpress (a successful airline right after the deregulation of the US airline market). The company doesn't exist any more.

Could it happen to DHL in a similar way, and the crash comes in with a longer delay?

The video (rather old from the 80's but with relevance to today's business world not changed a single bit) shows what goes on and how delays of customer reactions, and service adaption influences greatly the service supply chain.

Anybody interested in learning more about the dynamics of business check out the WikiSD.

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