Operations and Supply Chain Strategies
A huge market exists for automobile tune-ups, oil changes,
and lubrication services for more than 250 million vehicles on U.S. roads. Some
of this demand is filled by full-service auto dealerships, some by Walmart and
Firestone, and some by another tire/ service dealers. However, Rapid-Lube,
Mobil-Lube, Jiffy-Lube, and others have also developed strategies to
accommodate this opportunity. Rapid-Lube stations perform oil changes,
lubrication, and interior cleaning in a spotless environment. The buildings are
clean, usually painted white, and often surrounded by neatly trimmed
landscaping. To facilitate fast service, cars can be driven through three
abreast. At RapidLube, the customer is greeted by service representatives who
are graduates of Rapid-Lube U. The Rapid-Lube school is not unlike McDonald’s
Hamburger University near Chicago or Holiday Inn’s training school in Memphis.
The greeter takes the order, which typically includes fluid checks (oil, water,
brake fluid, transmission fluid, differential grease) and the necessary
lubrication, as well as filter changes for air and oil. Service personnel in
neat uniforms then move into action. The standard three-person team has one
person checking fluid levels under the hood, another assigned interior
vacuuming and window cleaning, and the third in the garage pit, removing the
oil filter, draining the oil, checking the differential and transmission, and
lubricating as necessary. Precise task assignments and good training are
designed to move the car into and out of the bay in 10 minutes. The business
model is to charge no more, and hopefully, less, than gas stations, automotive
repair chains, and auto dealers, while providing better and faster service.
1. What constitutes the mission of Rapid-Lube?
2. How does the Rapid-Lube operations strategy provide a
competitive advantage? (Hint: Evaluate how Rapid-Lube’s traditional competitors
perform the 10 decisions of operations management vs. how Rapid-Lube performs
them.)
3. Is it likely that Rapid-Lube has increased productivity
over its more traditional competitors? Why? How would we measure productivity
in this industry?