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Southwest managers can't just measure things like technician utilization once and be done with the control process they have to measure performance repeatedly over time to make sure that their employees are staying on track. this is because control is a Southwest has a strong corporate culture, and the company proclaims that it's purpose is to "Connect people to what's important in their lives throu friendly, reliable, low-cost air travel. All Southwest employees are committed to making the company as low cost as possible, and they are constant ooking for ways to help Southwest reduce costs while maintaining outstanding customer service. This is an example of process. Suppose you are a gate manager for Southwest Airlines. Which of the following actions should you take if you want to use the balanced scorecard approach to control? Check all that apply. Measure customer satisfaction Measure operating expenses Measure technician job satisfaction Measure competitor fare rates

Southwest managers can't just measure things like technician utilization once and be done with the control process they have to measure performance repeatedly over time to make sure that their employees are staying on track. this is because control is a Southwest has a strong corporate culture, and the company proclaims that it's purpose is to "Connect people to what's important in their lives throu friendly, reliable, low-cost air travel. All Southwest employees are committed to making the company as low cost as possible, and they are constant ooking for ways to help Southwest reduce costs while maintaining outstanding customer service. This is an example of process. Suppose you are a gate manager for Southwest Airlines. Which of the following actions should you take if you want to use the balanced scorecard approach to control? Check all that apply. Measure customer satisfaction Measure operating expenses Measure technician job satisfaction Measure competitor fare rates

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 3TIF
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Case Study The coronavirus pandemic drastically reduced the number of people flying in the United States. Because of this, every major airline experienced a drop in stock prices from February 2020 to November 2020. But these drops ranged from 57% for American Airlines to 21% for Southwest Airlines. Why such a difference? Investopedia points out that Southwest has extremely efficient operations, low-cost pricing, and innovative logistics solutions. In addition, they incorporate customer experience and forward planning into their strategy. All of these things helped Southwest to weather the pandemic, and they all require that Southwest maintains careful control over its operations. One of the other things that helped Southwest during the pandemic was their superior service desk performance. They achieved this performance, in part, through measuring key factors in customer service, looking at customer service leaders (benchmarking), and making changes to bring their customer service costs and customer satisfaction up to the level of their highest competitors. To start this process, Southwest looked at overview measures for their customer service desk, including the annual operating expense, monthly inbound contact volumes for different media (e.g. voice, email, web portal, chat), monthly outbound contact volume, and personnel headcounts. They also looked at quality measures such as customer satisfaction, technician measures such as schedule adherence, and service level measures such as call abandonment. Next, they contacted numerous companies that they considered to be key competitors or excellent at customer service. They talked to these companies about cost, productivity, service level, quality, technician, and contact handling measures, and found that their cost per inbound contact was higher than other companies, but their customer service ratings were also high. This put Southwest in the middle quartile of a cost vs. quality graph - they were effective, but not efficient. Knowing this, Southwest started to measure six key performance metrics: cost per inbound contact, customer satisfaction, technician utilization, net first contact resolution rate, technician job satisfaction, and percent of calls answered in 30 seconds. They found that on these metrics, they were above average, but not at the top of the scale. In particular, their customer satisfaction, productivity metrics and technician metrics were all strong. They were growing in the chat and portal channels, and they scored well on process maturity. But their costs were above average, the average speed of answer rate was low and call abandonment was high. Interviews also pointed out concerns about Southwest's ability to retain new technicians and a perceived lack of opportunities for career advancement. Southwest implemented several key initiatives, including establishing a technician career path, increasing chat volume, implementing technician scorecards, allowing their six key processes (strategy, human resources, process, technology, performance measurement, and communication) to mature, and allowing their metrics to mature. At the end of one year, they saw an increase in customer satisfaction, and more importantly, a decrease in their costs. Sources: Company Profiles. Investopedia, . (2020, May 22). How is Southwest Different from Other Airlines? Retrieved from https://www.investopedia.com/articles/investing/061015/how-southwest-different-other-airlines.asp; HDI 2018 Conference and Expo. Rumburg, J. (2018, April 10). Leveraging Metrics to Take Southwest Airlines to a Higher Plane. Retrieved from https://www.hdiconference.com/files/pdfs/hdi2018handouts/Session302.pdf Southwest managers can't just measure things like technician utilization once and be done with the control process they have to measure performance repeatedly over time to make sure that their employees are staying on track. this is because control is a Southwest has a strong corporate culture, and the company proclaims that it's purpose is to "Connect people to what's important in their lives through friendly, reliable, low-cost air travel. All Southwest employees are committed to making the company as low cost as possible, and they are constantly looking for ways to help Southwest reduce costs while maintaining outstanding customer service. This is an example of Suppose you are a gate manager for Southwest Airlines. Which of the following actions should you take if you want to use the balanced scorecard approach to control? Check all that apply. оооо Measure customer satisfaction Measure operating expenses process. Measure technician job satisfaction Measure competitor fare rates
Transcribed Image Text:Case Study The coronavirus pandemic drastically reduced the number of people flying in the United States. Because of this, every major airline experienced a drop in stock prices from February 2020 to November 2020. But these drops ranged from 57% for American Airlines to 21% for Southwest Airlines. Why such a difference? Investopedia points out that Southwest has extremely efficient operations, low-cost pricing, and innovative logistics solutions. In addition, they incorporate customer experience and forward planning into their strategy. All of these things helped Southwest to weather the pandemic, and they all require that Southwest maintains careful control over its operations. One of the other things that helped Southwest during the pandemic was their superior service desk performance. They achieved this performance, in part, through measuring key factors in customer service, looking at customer service leaders (benchmarking), and making changes to bring their customer service costs and customer satisfaction up to the level of their highest competitors. To start this process, Southwest looked at overview measures for their customer service desk, including the annual operating expense, monthly inbound contact volumes for different media (e.g. voice, email, web portal, chat), monthly outbound contact volume, and personnel headcounts. They also looked at quality measures such as customer satisfaction, technician measures such as schedule adherence, and service level measures such as call abandonment. Next, they contacted numerous companies that they considered to be key competitors or excellent at customer service. They talked to these companies about cost, productivity, service level, quality, technician, and contact handling measures, and found that their cost per inbound contact was higher than other companies, but their customer service ratings were also high. This put Southwest in the middle quartile of a cost vs. quality graph - they were effective, but not efficient. Knowing this, Southwest started to measure six key performance metrics: cost per inbound contact, customer satisfaction, technician utilization, net first contact resolution rate, technician job satisfaction, and percent of calls answered in 30 seconds. They found that on these metrics, they were above average, but not at the top of the scale. In particular, their customer satisfaction, productivity metrics and technician metrics were all strong. They were growing in the chat and portal channels, and they scored well on process maturity. But their costs were above average, the average speed of answer rate was low and call abandonment was high. Interviews also pointed out concerns about Southwest's ability to retain new technicians and a perceived lack of opportunities for career advancement. Southwest implemented several key initiatives, including establishing a technician career path, increasing chat volume, implementing technician scorecards, allowing their six key processes (strategy, human resources, process, technology, performance measurement, and communication) to mature, and allowing their metrics to mature. At the end of one year, they saw an increase in customer satisfaction, and more importantly, a decrease in their costs. Sources: Company Profiles. Investopedia, . (2020, May 22). How is Southwest Different from Other Airlines? Retrieved from https://www.investopedia.com/articles/investing/061015/how-southwest-different-other-airlines.asp; HDI 2018 Conference and Expo. Rumburg, J. (2018, April 10). Leveraging Metrics to Take Southwest Airlines to a Higher Plane. Retrieved from https://www.hdiconference.com/files/pdfs/hdi2018handouts/Session302.pdf Southwest managers can't just measure things like technician utilization once and be done with the control process they have to measure performance repeatedly over time to make sure that their employees are staying on track. this is because control is a Southwest has a strong corporate culture, and the company proclaims that it's purpose is to "Connect people to what's important in their lives through friendly, reliable, low-cost air travel. All Southwest employees are committed to making the company as low cost as possible, and they are constantly looking for ways to help Southwest reduce costs while maintaining outstanding customer service. This is an example of Suppose you are a gate manager for Southwest Airlines. Which of the following actions should you take if you want to use the balanced scorecard approach to control? Check all that apply. оооо Measure customer satisfaction Measure operating expenses process. Measure technician job satisfaction Measure competitor fare rates
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