In this lesson, we dive into understanding the crucial elements of the travel and transportation value chain. You will recognize the vital role played by customer experience and the need for a customer-centric approach to deliver personalized service and thus create a unique value proposition for customers. Let’s get started.
1. Customer Experience
A customer-centric approach is essential in today‘s environment to remain competitive and create your unique value proposition to customers. This includes service excellence where customers want personalized service and offers that are relevant and delivered in their channel of choice at a time that is convenient, and organizations must deliver. Service leaders recognize employees create much of the customer experience and contribute greatly to service excellence. Employees must have a clear understanding of brand standards and we'll see more remote and virtual trainings on these standards as large in-room training cohorts shift to the digital world.
The right product mix requires a programmatic approach to continually evaluate customers wants and needs to develop new and improved products, services, and business models.
Visibility and capability also contribute to customer experience. Keeping passengers, guests, and customers proactively informed of products, services, and policies, and providing them with the ability to manage their engagement themselves; all at the right time and in the right channel.
2. Operational Efficiency
Operational efficiency involves the collaboration and communication between employees, suppliers, and processes. This requires visibility across all parts of the operation, both current activities and future risks and opportunities. For employees, understanding policy standards and turnaround times is essential for strong performance.
When collaborating with suppliers, both parties must understand service level agreements to ensure:
- Consistent inventory availability.
- Competitive pricing.
- High-quality products.
3. Optimization of Assets
It doesn’t matter if it's a cargo container, truck bed, hotel room, or airplane, an asset not in use isn’t making money and is likely negatively affecting revenue. To maximize asset use, it's essential that companies:
- Ensure visibility and guidance on turnaround times.
- Implement clear policies for asset allocation and use.
- Focus on regular maintenance and predictive repairs.
4. Cost Management
In challenging economic times, financial scrutiny escalates, especially within the realm of costs, a subject that is almost assured to dominate conversations among CFOs, CEOs, and COOs. An important area of cost management lies in sourcing. The fundamental question emerges – do we have the right vendor or supplier who can not only support our business operations, but also meet our brand standards and the expectations of employees and customers?
The dynamics of running a global business introduce complexities – for instance, the need to source a new supplier swiftly due to the current one going out of business or encountering geopolitical hurdles affecting imports. In this context, strategies such as increasing inventory can be employed to mitigate risks, but this might compromise operational efficiency and constrict cash flow.
Another pragmatic approach to managing and reducing costs encompasses automation and digitization of processes. This allows businesses to automate low-value tasks and liberate employees to concentrate on strategically impactful tasks instead. Furthermore, by operating customer experience and service levels efficiently, organizations can diminish support costs, ultimately contributing to cost reduction. This intricate intertwining of different strategies works towards creating a balanced and efficient cost-management system.
5. New Business Models
Exploring the realm of new business models often underscores the strategic pursuit of developing fresh revenue streams via innovative or reimagined products, services, and partnerships. We can conspicuously witness an exciting shift in various sectors. For instance, organizations within the airlines and hospitality domains are expanding their retail functions beyond conventional practices, wielded not merely confined to selling a seat on a flight or a room in a specific property.
Extending this scenario, unconventional participants are also emerging as contenders, evident in the example of ports delving into the shipping and logistics space. This evolution denotes the crucial change in the conventions of doing business, signifying the transition towards a more comprehensive and flexible model.
Expanding on these transformations, the evolution of the service and product mix through both direct and indirect channels significantly enhances business opportunities. These adaptations pave the way for more sophisticated customizations ranging from standalone offerings to comprehensive bundled packages. Mirroring this progression, service levels are also not left untouched, varying dynamically from high-touch to self-service. New business model exploration thus extends an intriguing picture of possibilities and growth, understanding the role of innovation and strategic partnerships.
Value Chain Overview
- Customer Service
- Service Excellence
- Product Mix
- Visibility
- Cost Management
- Turn around
- Visibility
- Resources
- Connectivity
- Innovation
- Operational Efficiency
- Availability
- Visibility
- Maintenance
- Inventory
- New Business Models
- Sourcing
- Inventory
- Analysis
- Processes
- Optimization of Assets
- Revenue streams
- Products
- Services