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Chase Strategy Debate
Chase strategy refers to the concept that you are chasing the demand set by the market. Production is set to match demand and does not carry any leftover products. This is a lean production strategy, saving on costs until the demand (the order) is placed. Inventory costs are low, and the cost of goods for products sold is kept to a minimum and for a shorter length of time.
Chase strategy is used in industries that must contend with perishables or with a company that does not have a lot of extra cash on hand to handle the added risks of unsold products. The production schedule is based on orders and immediate demand.
By varying production or services to meet demand, the lean approach of inventory management has lower inventory levels and reduced labor cost.
For example, an airline call center has varying demand—higher calls during summer months and major holidays. Inaccurate forecasts can cause havoc concerning staff capacity and scheduling decisions. In some situations, equipment capacity may not be adequate during periods of peak demand.
For this discussion forum, decide to be for or against adopting a chase strategy for a major airline call center. Provide a research-based rationale for your decision.
Your initial response should be a minimum of 200 words. At least 1 credible resource
6.2
Fast-food restaurants, for example, often experience overproduction (food sitting under hot lamps with no immediate sale), customers waiting, incorrect orders, undercooked or overcooked food that must be discarded, employees running around the kitchen not having clearly defined jobs, and so on.
Identify an organization that is familiar to you and provide three examples of different types of waste. Additionally, identify at least three potential lean tools and techniques to address the various types of waste.
Sample Answer
Should a Major Airline Call Center Adopt a Chase Strategy?
I am against adopting a pure Chase Strategy for a major airline call center, despite the desire to align labor costs precisely with demand fluctuations. While the theoretical goal of a Chase Strategy is lean operation with zero inventory (or, in this service case, zero idle capacity), its practical implementation in a call center leads to significant trade-offs that undermine the core business goal of a major airline: customer satisfaction and loyalty.
Rationale Against the Pure Chase Strategy
A pure Chase Strategy requires varying labor capacity—hiring, training, and laying off staff—to match the moment-to-moment or seasonal shifts in call volume (demand).
High Hidden Labor Costs and Poor Quality: The strategy assumes staff can be easily scaled. In reality, call centers require specialized training and knowledge of complex airline systems, rules, and pricing. High turnover, inherent in a constantly fluctuating labor force, leads to continuous, expensive retraining cycles and results in a workforce composed of a high percentage of new, less-experienced agents (Hopp & Spearman, 2011). This
Erosion of Customer Experience: During peak demand periods (summer, holidays, or sudden events like flight cancellations), the Chase Strategy will lead to staff shortages and long queue times. For an airline, poor customer service during peak demand is unacceptable. It creates severe customer frustration, drives down brand loyalty, and can lead to immediate lost revenue (e.g., customers booking with a competitor because they couldn't reach an agent). The negative impact on lifetime customer value outweighs the savings from minimizing idle time.
Inflexible Capacity: Unlike manufacturing, where a machine can be turned off, a skilled agent represents a long-term investment. Trying to match demand exactly (zero inventory/zero idle time) means any slight forecasting error or unpredicted event (a weather delay) instantly creates a capacity crisis, leading to mass customer abandonment and system failure.
Recommended Alternative: A Hybrid Strategy
A major airline call center should adopt a Hybrid Strategy that employs a Level Strategy (stable core workforce for baseline demand) combined with Chase elements (using contract labor, temporary agents, or mandatory overtime for predictable seasonal peaks). This approach stabilizes the workforce, ensuring high quality and customer satisfaction, while still maintaining some flexibility to manage predictable surges (Hopp & Spearman, 2011).
🗑️ Organizational Waste and Lean Solutions
The organization I will identify is a University Enrollment and Student Services Department.
This department processes applications, registers students, handles financial aid disbursements, and manages student records.
Three Examples of Waste (Based on the Lean Principle of Muda)
Type of Waste
Example in Enrollment Services
Description
1. Waiting
Application Review Bottleneck: Applications sit idle for days awaiting manual review by a single admissions officer while the student waits for a decision.
Time wasted by the student (customer) and the delay in the process flow due to an overloaded resource.
2. Motion
Record Retrieval: An employee must physically walk to three different filing cabinets and log into two separate, non-integrated software systems to answer a simple student inquiry about their account status.
Unnecessary movement (physical and digital) of staff searching for scattered information.
3. Defects
Incorrect Financial Aid Disbursement: Due to an error in data entry or confusing paperwork, a student receives the wrong aid amount, requiring multiple corrective appeals and staff time to fix.
Errors that require rework, create customer dissatisfaction, and consume resources unnecessarily