Pricing deliveries in this way is a mixture of attempting to change customer behaviour yes, but also as a consequence of the effort and actual cost spent in order to speed your delivery up above and beyond \u2018usual channels\u2019. Some of this is a fiction of course (second class mail often has to be deliberately delayed within the UK mail system for example), most of it is not. \u00a0If we need more \u2018little and often\u2019 deliveries then we\u2019ll need more people transporting things, which uses more fuel, which is more expensive \u2013 the customer needs to pay more if it wants this level of service.<\/p>\n
Perhaps Economies of Scale are sounding more appealing at this point? Well again, I\u2019d suggest caution here, particularly as within service organisations, we are often not making physical things, we are delivering \u2018intangible\u2019 solutions created through human relationships.<\/p>\n
John Seddon talks much about service organisations\u2019 \u201cability to \u2018absorb\u2019 customer demand\u201d \u2013 by this he means empowered employees, who possess the autonomy required to respond to customers\u2019 requests, as and when they happen. Teams are multi-skilled and, contrary to the Fordist model where a worker learns a fraction of a total task and repeats it over and over again, they can adapt to customer requirements, applying sense, reason and intellect to the task at hand.\u00a0 Listening, identifying, helping the customer in front of them.<\/p>\n
What often happens within centralized services, which again, might be a very good thing (gosh the world looks great from this aerial fence view!) is that standards become King. Work is rejected if it does not fit the brief. Responses are standardized and the ability to flex is greatly reduced. The realities of such factories of work is, if they are insufficiently designed and resourced, queues start to form.\u00a0 What\u2019s worse is that these queues of work develop lives of their own. Employees shift from actually doing the task to managing the backlog.\u00a0 The backlog grows and grows as those within the queue repeat their request, adding a new work task to the mountainous heap (failure demand).<\/p>\n
Another problem with centralized systems is the time it takes for work to actually get there. This problem is lessened within paperless processes, but when there are multiple stages of task, involving many \u2018handoffs\u2019 and permissions, the end to end delivery time can actually get worse. \u00a0When coupled with the \u201ccentre\u2019s\u201d potential misreading of the customer requirement once it reaches them (because of their remoteness and distance from the initial demand), we can see that centralized solutions are somewhat losing their appeal.<\/p>\n
This is perhaps where Economies of Flow have the edge. In the year 2018, customers want their items\/service\/solutions NOW and they want them to be RIGHT – this paradigm is not going to go anywhere anytime soon. Speed is often THE competitive advantage.\u00a0 It is unlikely that customers will desire a slower response, except if there are significant price savings and advantages to be had.<\/p>\n
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