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Whenever there are stories about Uber or TaskRabbit or any other “sharing economy” platform, the benefit of scheduling flexibility is inevitably mentioned. These firms may not offer their workers (more accurately, contractors) benefits or guarantees of employment, but they allow workers to craft a schedule that fits their own needs. Does granting such flexibility work in a more conventional setting?

Zappos, it seems, is out to answer that question with its call center workers (Zappos is bringing Uber-like surge pay to the workplace, Jan 28). Zappos’ incumbent system had call center agents signing up for their preferred shifts on paper once a quarter based on seniority. That obviously limits flexibility. Further, Zappos (not surprisingly) faces some predictable patterns in its call volume that are challenging to meet. For example, there is a spike on weekday mornings as people call from the East Coast — which is way early at Zappos’ Las Vegas call center. The solution? A bit of Uber-like surge pricing.

[CEO Tony] Hsieh was not available for an interview for this article, but as Goldstein recalls, he asked the Labs team, “‘How do you feel about looking at something like Uber for the call center?’ It was definitely not something we’d actively been thinking about,” Goldstein says.

That conversation sparked the development of what is now known as Open Market—referred to as “Om” internally—an online scheduling platform that allows workers to set discretionary hours and compensates them based on an Uber-esque surge-pricing payment model: hourly shifts with greater caller demand pay higher wages. The goal of Open Market was to create a “free-market system,” Goldstein says, and strike a balance between the rigidness of customer service center scheduling and what the company says is its dedication to giving employees time to pursue other opportunities at Zappos, like extra training. “We wanted the [customer service center employees] to work more flexible hours, eventually 100% flexible, and reward them based on how much or how little customers need them to work,” he says. …

Zappos limited the Open Market pilot to the 213 employees who work the customer service center’s phones. Everyone received at least 10% flexible time, so during a 40-hour week, employees would have four hours to play with. They could choose to not work during those hours or they could fulfill them whenever they liked by tacking them onto the start or end of a workday or by coming into the office on a scheduled day off.

Employees decided when to work with the help of Open Market’s real-time customer service center metrics algorithm and historical data that showed customer demand, as measured by the wait time of the longest-holding customer, and the accompanying compensation rates. The longer the hold time, the higher the customer demand, the more the employees working that shift would get paid.

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When should phone calls go to front-line service personnel and when should they go to a call center? The best arrangement obviously is going to depend on the setting so let’s consider the case of a car dealer considered in a recent Automotive News article (Call center keeps the service bays packed, Jan 23). The dealership in question has two stores — a Honda dealership and an Acura dealership. The status quo had service calls going directly to the service advisers, i.e., the folks who speak to customers when they drop off their cars or call them with news about what problems were found and how much it would cost to fix it. The proposal would route inbound calls looking to schedule appointments etc to a call center instead of the service advisors.

Now, it seems upfront that there are some real benefits of pulling these calls out of the service department. The call center would keep advisors from having to ditch in person customers to take call. It would also allow for some pooling across the stores. However, these efficiency gains are not what sealed the deal for the dealership. Rather, it was the opportunity to gain better control over scheduling.

“We were able to regain control of scheduling appointments in the service drive, and that’s important because we’re only open a certain amount of hours, so we want to load our shop,” says Proctor, managing partner of Metro Honda and Metro Acura in Montclair, Calif. “The service advisers didn’t see it that way.” …

By creating the call center, Proctor took service scheduling away from service advisers. They are often reluctant to book small jobs, such as oil changes and tire rotations, because they earn smaller commissions on those jobs compared with, say, a three-hour brake repair, he says. …

Proctor’s inspiration for the call center came about 21/2 years ago. He was listening to recordings of randomly selected inbound dealership calls, and one especially disturbed him.

“A customer wanted a warranty-repair appointment, and our associate said no appointments were available for three weeks,” Proctor says.

The customer wanted it done sooner. Proctor listened in shock as the service adviser gave the customer a competitor’s phone number to do the work, he says. ..

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Over time, this blog has had a lot of posts about shipping containers. Here is another one.

More specifically , we have from Vox and short video on the history and economic impact of shipping containers and why container ships keep getting bigger and bigger (How cargo ships got so huge — and transformed the world economy, Jan 22).

Cheaper smartphones

You may not be familiar with Xiaomi, but you likely will be soon enough. Xiaomi is a Chinese smartphone maker. It sold its first smartphone in 2011 and is already the third biggest player in the market. It also holds the distinction of being the most valuable tech start up going — yes, even more valuable than Uber. (See here and here for more.)

How did they get so big so fast? Mostly by being cheap. Their phones offer a level of value that, say, Apple cannot touch. A new iPhone without a contract with a carrier (i.e., without a subsidy) will set you back at least $600. If you want more storage and a bigger screen, that creeps up to near a thousand dollars. Xiaomi’s phones top out around $500 and they have offerings under $150.

So how does Xiaomi manage to offer so much for so little? That is the topic of a TechCrunch article (This Is How Xiaomi Keeps The Cost Of Its Smartphones So Low, Jan 19). Now part of their success is due to their distribution strategy. In China it sells only on-line. Hence, it can cut retailers or carriers out of the equation. But that is not the only factor. How they mange their product line and purchasing (and consequently their supply chain) also makes a difference.

 [Hugo] Barra [the company’s VP of International] explained that Xiaomi is able to make price concessions thanks to the combination of a small portfolio and longer average selling time per device.

Importantly, Xiaomi continues to sell older devices (and tweaked versions of them) at reduced prices even after it releases newer models.

“A product that stays on the shelf for 18-24 months — which is most of our products — goes through three or four price cuts. The Mi2 and Mi2s are essentially the same device, for example,” Barra explained. “The Mi2/Mi2s were on sale for 26 months. The Redmi 1 was first launched in September 2013, and we just announced the Redmi 2 this month, that’s 16 months later.”

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Today is a big day for companies in the shipping business. Coming off of the last weekend before Christmas, it is not too surprising that the likes of UPS and FedEx are expecting a massive rush of packages ordered by everyone who gave up on the mall and just ordered it online. In case you couldn’t have guess that for yourself, both the New York Times (Crunch Time for FedEx and UPS as Last-Minute Holiday Shipping Ramps Up, Dec 21) and the Wall Street Journal (A Test for UPS: One Day, 34 Million Packages, Dec 21)have articles today about how shippers have planned to deal with the deluge.

For my money, the Journal article is more interesting if only because it contains nuggets like that e-commerce will soon account for half of all U.S. packages. This video summarizes some of the main points of the article.

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What can a major company learn from the sports world? I am not thinking here about inspirational speeches from a coach or anything like that. Rather, can people with a background in sports competition actually offer ways of improving business processes?

It turns out the answer to that question is yes as the Financial Times reports in discussing McClaren Applied Technologies relationship with GlaxoSmithKline (McLaren speeds up GSK with racetrack expertise, Dec 10). That’s McClaren as in Formula 1 racing and they have turned their expertise in organizing pit crews and monitoring racing cars into a side consulting business. In the case of GSK, they have produced some interesting results.

Perhaps the clearest dividend of the partnership so far has come not in drug development but in GSK’s consumer healthcare business. McLaren was asked to scrutinise a toothpaste manufacturing facility in Maidenhead and work out how to boost efficiency.

“We noticed that they were making lots of small batches of different products with a lot of down time in between,” says Mr McGrath. “They said: ‘If you can change four tyres on a racing car in two seconds why does it take us two hours to do a changeover?’”

Within a year, lost time had been cut by 60 per cent, using principles similar to those that govern the pit-stops for Mr Button’s racing car. “It’s about everyone knowing their job and doing it well,” says Mr McGrath. “Afterwards, we analyse every detail — what went well, what didn’t and how we can improve.”

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I cut my academic teeth doing work on supply chain contracting. I consequently found a BBC report on pay-to-stay payments interesting (Premier Foods accused over ‘pay and stay’ practice, Dec 5). The subject of the report is Premier Foods, a large UK manufacturer with several food brands. Premier had the chutzpah to effectively ask its suppliers for bags of cash. Here is what the firm’s CEO wrote.

[Chief Executive Gavin Darby] wrote: “We are aiming to work with a smaller number of strategic suppliers in the future that can better support and invest in our growth ideas.”

He added: “We will now require you to make an investment payment to support our growth.

“I understand that this approach may lead to some questions.

“However, it is important that we take the right steps now to support our future growth.”

But when a supplier raised questions in an email about the annual payments, another member of Premier’s staff replied.

“We are looking to obtain an investment payment from our entire supply base and unfortunately those who do not participate will be nominated for de-list.”

You can contemplate the lovely Britishness of “nominated for de-list” while watching this video on the subject.

I should note that Premier Foods has since backed off its demand after the negative press following this report (see here).

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