Chase strategy in supply chain management

· Lisa Schreiner
SaturdaySep 12 at 6:03pm

Manage Discussion Entry

Supply chain methods vary from each organization and management preference but choosing the appropriate one for a business should be based on what is in the best interest of the company. “A chase demand strategy sets the production rate equal to the demand in each time period” (Collier and Evans, 2019, sec. 13-3). For example, inventory production increases as demand for the product increases and vice versa. The service industry is a bit more difficult to forecast demand for particular offerings. I am for a major airline call center adopting the chase strategy to meet demand. According to Sasser (1976), “Service managers using the chase strategy are usually responsible for unskilled employees performing jobs with little or no discretion for low pay in a relatively unattractive environment” (para. 29). A call center employee, airline or any other organization, does not require a significant amount of skill. Positions of this nature tend to operate from a manuscript, providing an opportunity for the business to hire on temps during peak demand keeping unemployment and onboarding expenses low. Forecasting demand for an airline is possible based on promotion offerings and seasonal trends in the strategic business plan.

References

Collier, D. A, & Evans, J. R. (2019). Operations and supply chain management. Cengage Learning.

Sasser, W. E. (1976, November). Match Supply and Demand in Service Industries. https://hbr.org/1976/11/match-supply-and-demand-in-service-industries (Links to an external site.)

Julie Wolfe
SundaySep 13 at 1:06pm

Manage Discussion Entry

According to Collier & Evans (2019), chase strategy is matching the production rate to the demand rate. A chase strategy would be difficult to apply to an airline call center due to the demand fluctuations of higher calls during summer months and major holidays. For chase strategy, the lead times required to hire and train new employees in periods of increased volume and to reduce the workforce in periods of volume reduction are so short that forecasting and budgeting is needed only for the short run (Sasser, 1976). This differs from hiring and training employees that are expected to stay with a company in the long-term.

My recommendation is to adopt a chase strategy using analytics of data from the past three to five years to forecast the level of demand throughout the year. In periods of higher demand, the call center will schedule additional staff in the form of part-time and contingent workers to accommodate the expected increase call volume. This method will allow for a temporary adjustment of workforce levels without a continuous cycle of hiring and layoffs (Collier & Evans, 2019). Hiring typically comes with a long period of training and layoffs results in severance pay, unemployment insurance costs, and a decrease in employee morale. Filling in the gaps with part-time and contingent workers allows for gaps to be filled as needed.

References

Collier, D. A, & Evans, J. R. (2019). Operations and supply chain management. Cengage Learning.

Sasser, W.E. (1976, Novermber). Match supply and demand in service industries.

https://hbr.org/1976/11/match- (Links to an external site.) supply-and-demand-in-service-industries