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Use of Facility and Distribution Layouts in a Service Organization

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The BellSouth Payment Remittance Operation (PRO) processes customer payments for BellSouth Telecommunications (BST), and BellSouth Mobility (BMI). There are two PRO groups, one in Atlanta and one in Charlotte, North Carolina. The customers predominantly live in a nine-state region in the southeastern part of the United States. The Atlanta PRO processes payments for BST customers from Louisiana, Mississippi, Alabama, Georgia, and Tennessee, and Carrier Access payments and Manager’s Bill payments for all states. They process payments for BMI customers from these same states in addition to any customers outside the normal BellSouth area.

The BellSouth customer population for BST grows as the population in the areas it serves grows. The mobility market, which is highly competitive, grows as new customers buy into the concept. The combined growth in payments processed over the last couple of years has been about 6%.

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The average number of payments processed per day by the Atlanta group is 350,000. On weekend days this drops to about 150,000 and the most they have ever processed in a 24-hour period is 698,000 payments.

They handle 7.4 million payments per year, with the Charlotte group handling about 300,000 to 400,000 less than that. The Atlanta group has 145 total employees, counting managers, some part time and some temporary employees. They work one of three shifts for 24 hour, six and a half-day coverage. Saturday night is the only time there is no one working. 98% of all payments are processed within 24 hours of receipt. The average cost per payment processed is $.07. The first half of every month is heavier than the second half due to billing cycles. January and the first two weeks of July are the heaviest times during the year. This is due to fiscal year ends for businesses in the area, and that residential customer doesn’t generally pay their telephone bills in December. Other causes of fluctuations in volumes received are the mail flow and the weather.

Service strategy appears to be assemble to order on first glance. 50% of the payments received require human intervention to record the payments due to multiple remittance documents, multiple checks, or illegible amounts on checks or money orders. Machines that can read both checks and documents, thus avoiding the human touch record the other 50% of payments. Mass customization appears to be a better description, however. BellSouth’s flexible processes generate customized services in high volumes at reasonably low cost. Their key to being a successful mass customizer is handling the payments that can go straight through the machine process and only diverting those that require special attention. Doing this allows the greatest application of the more efficient line flow strategy for standard payments before flexible flows are required for specific customization.

After observing the payment remittance operation it can be deduced that Bellsouth uses an Intermediate flow type in processing their payments. When the mail is initially received at the processing center it follows a uniform step-by-step process with only a few deviations.

The mail is delivered at least nine times a day. It is wheeled off of the freight elevator and into the mailroom. Then it is sorted into gray and white mail. From there it is fed into a machine that can determine whether it is just a “normal” one check and one payment slip or multiple forms, checks and sometimes even cash.

The “normal” mail is then fed into a machine and opened by being slit on all three sides. Multiple documents and all white mail have to be routed into another room where they are sorted by hand. Checks are then sent through an imaging machine that takes a picture of the check and the slip. Unreadable items are rejected and put in a queue for the people in the DCB unit to handle. The checks and documents are separated with documents in one tray and checks in another. Fifty percent of the payments are matched by the imaging machines and processed. The other fifty percent are scanned and sent to DCB to do a scan line fix document or amount entry. The operators compare the document to the check using the images and record the correct amount. Occasionally, they have to retrieve the actual check from a batch. Dishonored checks are also handled in this room. It is at this point that the process deviates from a strict line flow to an intermediate flow. The straight assembly line process is interrupted when the payments skip pass 2 and is sent to DCB. It is further changed when an individual has to actually pull a batch for a check in order to verify information.

After this stage the process picks up again at pass 2 where all checks are endorsed and batched ready to be sent to the bank.

When tracing the process that all the payments at the Bellsouth Remittance Center have to follow it can easily be determined that they use an Intermediate flow type. It also shows that they use a Batch/Line process type. The Batch/Line process by definition has high volume and low customization, which can easily be seen at Bellsouth. As mentioned earlier Bellsouth handles a very high volume of mail and because of the of the process type that is used in the center, customization has to be kept at a minimum.

Time plays a huge role also at the payment center. It is imperative that when the mail is received that it is processed within a specified amount of time. The employees in the center are allotted a certain amount of time to sort through the white mail (multiple forms) and get it through to pass one. It is not uncommon for them to work extra hours processing the payments in order for the process to be completed so the checks can be taken to the bank, and the process can begin again the next day.

Elliott, Pat. (2000). BellSouth Payment Remittance Corporation.

Cite this Use of Facility and Distribution Layouts in a Service Organization

Use of Facility and Distribution Layouts in a Service Organization. (2018, Jun 19). Retrieved from https://graduateway.com/use-of-facility-and-distribution-layouts-in-a-service-organization/

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