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Improving Customer Service Operations at

This document discusses improving customer service operations at Amazon.com. It describes Amazon's success stemming from steady growth and diversification. A key part of Amazon's operations is its Customer Service Organization (CSO), which provides customer interfaces through its website and contact centers. The document presents the problem of scheduling human resources efficiently across contact centers to meet service level objectives. It reviews relevant literature and proposes a two-stage solution approach using a mixed integer program optimization model to generate minimum-cost staffing plans while considering uncertainties. The results showed the new approach saves time and costs compared to the previous spreadsheet-based method.

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ssanchet1981
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71 views24 pages

Improving Customer Service Operations at

This document discusses improving customer service operations at Amazon.com. It describes Amazon's success stemming from steady growth and diversification. A key part of Amazon's operations is its Customer Service Organization (CSO), which provides customer interfaces through its website and contact centers. The document presents the problem of scheduling human resources efficiently across contact centers to meet service level objectives. It reviews relevant literature and proposes a two-stage solution approach using a mixed integer program optimization model to generate minimum-cost staffing plans while considering uncertainties. The results showed the new approach saves time and costs compared to the previous spreadsheet-based method.

Uploaded by

ssanchet1981
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
You are on page 1/ 24

Improving Customer

Service Operations at
Amazon.com
9조
Jin Goo Ki Sung
2007/11/29
Telecom Service/Policy
y Introduction
y Problem Setting
y Literature Review
y Solution Approach
y Result

Table of Contents
1
y Interface between customer and company
is very important

< off-line > < on-line >

y Effects on
◦ Customer satisfaction on the product
◦ Image of the company

Interface Introduction
2
y On-line market has developed rapidly

y The Interface of On-line market


◦ The features of company’s web site
◦ Contact Center ( Voice, E-mail )

Online market Introduction


3
y For good interface, online company should
provide a feedback in certain amount of time
Need to schedule the human resource
in contact center

y The objective of this paper


◦ Provide the mathematical programming to
allocate human resource in contact center
efficiently

Requirement Introduction
4
y AMAZON.COM
◦ American e-commerce company

Diversification

Revenue (from 1997 to 2006) $Mil

Amazon.com Introduction
5
y AMAZON.COM
◦ Their success came from
x Steady growth(not fast)
Revenue (from 1997 to 2006) $Mil

Steady growth
IT bubble burst!

Not fast
growth

x Diversification
x CSO (Customer Service Organization)

The Leaders and Best E-Commerce/Transaction Sites


• Range of e-Gov scores 57 to 86
• B&N.com 88
• Amazon 87
• Ebay 80
• 1-800Flowers.com 77

Amazon.com Introduction
6
y CSO
“We believe that our ability to establish and maintain long-term relationships
with customers and to encourage repeat visits and purchases depends on
the strength of customer service operations” (Amazon.com 2003, p. 4).

◦ Provide interface through


x Website
◦ Tracking orders and shipments
◦ Reviewing estimated delivery dates
◦ Cancelling unshipped items.

x Contact centers (internal , external )


◦ If cannot resolve inquiries using the web site
◦ E-mail or phone call (24hours)

◦ Providing customer with good interface


x Size the capacity of contact center to respond to customer
in certain amount of time

Human Resource Planning

CSO Introduction
7
y Problem Setting
◦ Schedule the contact center (internal, external)

Considering
Email - Seasonality
voic
e

The weekly volume of contacts

Contacts divided by
8 Category
** 8 Planning Groups Emai
l voice

Problem Setting The volume of contacts by category


Problem Setting
8
y Training
◦ Training of Customer Service Representative (CSR)

New
Primary
Representativ Be Primary CSR
Training
e

Additional
Primary CSR Be Special CSR
Training

Training of CSR Problem Setting


9
y AS-IS (spread sheet based)
◦ Special PG (internal) Y N

Capacity j >
Capacity j -= Voice j
Voice j

Capacity j -= Voice j Capacity j > Capacity j -= E-mail j


Primary += Capacity j E-mail j Primary += Capacity j
Capacity j = 0

Capacity j -= E-mail j Capacity j = Voice j +


Primary += Capacity j E-mail j

◦ Primary PG
Primary Voice -= Primary Primary Voice -=Primary
Cosourcer Voice > External = Primary Voice
Primary

Primary -=
Primary Voice

AS-IS Problem Setting


10
y Three Issues
◦ 1. how they added CSRs to teams?
x Differences in contracts with cosources, staffing and service
levels
x Average productivity, wage differ among centers

◦ 2. Contract terms differ across cosourcers


x Cost per ‘Contact handled’ vs ‘Fixed charge’

◦ 3. Lack of consideration between service objectives


and staffing cost
x Ignore the randomness of arrival rate, handling time
x No lever to allow CSO manager to consider them

Three Issues Problem Setting


11
y Gans Et al. (2003)
◦ Comprehensive summary of the state of call-center
research pertaining to capacity management
y Whitt (1999)
◦ Determination of capacity in a setting with two
customer classes. (one-immediately, the other
response within a day)
y Armony and Maglaras (2004)
◦ In a call center, customers can chose service class
1 (call back) or class 2 (wait for expected delay)

Literature Works Literature

12
y Chen and Henderson (2001)
◦ Ina call center, service is divided into 2 groups. For
higher priority use (tail probability), other classes
use Markov’s inequality

y Gans and Zhou (2002)


◦ Focused on a situation where 2 classes of
customers exist (high and low value). Solve a
problem to determine staffing level considering
outsourcing lower value class.

Literature Works Literature

13
y TO-BE
◦ Math programming considering three issues
◦ Develop two stage solution approach
x Adjustment Procedure
◦ Adjust contact forecasts to take into account different
source of uncertainty and service level objectives
◦ Hourly forecasts of e-mail and voice contact, average CSR
handling time and service-level objectives

x Optimization Model
◦ Mixed integer program
◦ Minimum-cost capacity plan for processing the contact
forecast

TO-BE Solution Approach


14
Without regard to service level objective

With regard to service level objective using Erlang C formula

The collection of adjusted forecasts becomes input to the optimization


model
Adjustment Solution Approach
15
y Formulation in MILP
◦ Objective Function

Optimization Model Solution Approach


16
y Formulation in MILP
◦ Constraints

Optimization Model Solution Approach


17
y Formulation in MILP
◦ Constraints

Optimization Model Solution Approach


18
y Formulation in MILP
◦ Constraints

Optimization Model Solution Approach


19
y Formulation in MILP
◦ Constraints

Optimization Model Solution Approach


20
y Formulation in MILP
◦ Constraints

Optimization Model Solution Approach


21
y Experiment
◦ Planning Horizon = 52 weeks (1year)
◦ 134,000 constraints, 16,000 variables(1000
integer)
◦ CPLEX on an HP 9000 superdome server
◦ Takes less than 5 minutes ( spread sheet 1day )

y Results
◦ Save Time, enable additional scenario analysis
◦ Considers ‘Three Issues’
not considered in AS-IS
◦ Increases annual
operational cost savings

Results Results
22
y Reference는 아직 다 정리가 안되어 정리 되는데로
다시 보내드리겠습니다.

Reference
23

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