Service Process Design

Explicit service is availability of delivery service, which Victoria’s Secret uses to deliver the product, also the time it takes for delivery (fast or regular shipping). Explicit service is also in Victoria’s Secret stores where there is an interaction between the customer and employee. Visual experience is also a big part of it because the layout in the store is divided into lingerie and clothing on one side and perfumes, lotions, and makeup on the other side. Victoria’s Secret also offers a credit card (Victoria’s Secret Angel) and gift cards for its customers. Implicit service in Victoria’s Secret includes customer’s feelings - likes and dislikes about products and from services provided by Victoria’s Secret. For example, trying on clothes can give customers either a positive or negative feeling about the product. Also, the store provides testers, which are set up for customers to test the scents (perfumes, lotions, lipsticks, etc). Looking at fun and feminine lingerie on mannequin’s also give some women a positive attitude to try on the same clothing. Facilitating goods are the products, such as; clothing, footwear, lingerie, fragrances, lotions and makeup.

The service matrix Victoria’s Secret uses is co-routed service matrix. In Victoria’s Secret customer base, most of the customers already know the brand. Even though customer’s needs and wants are different, Victoria’s Secret’s customer base have the same interests and wants. The products are sold in stores (1000 stores in the U.S.), through Internet and a catalogue. Victoria’s Secret offers a moderate number of choices that satisfy many different customers. In the mean time, many customers’ interests are also the same. Therefore, customers have high power in the decision-making process.

Victoria's secret encounters customer contact in many ways. In stores, customers interact with associates to help them find what they are looking for, and to further assist customers. In order to give customers the best overall experience Victoria's Secrets put a lot into training their associates. They support employees to make sure they have the proper training, and are well educated about their products, which makes Victoria secret stores a high contact service that requires employees who are flexible, personable, and that are willing to work with customers. As for the catalog and the Internet, which is low contact service, this focuses on technology. Technology helps them as a company to reach more of an audience and reach customers that do not make it into their stores.

Process Selection

Victoria’s Secret product flow is the Batch flow which produces medium variety and medium volume depending on the customer’s needs. The products are produced in batches according to their characteristics and sold in batches. Each batch of the product flows from one operation to another. A batch process executes different production runs for different products. The disadvantage is the setup time required to change from one product to the other, but the advantage is that some flexibility in product mix can be achieved. A batch process is similar to a job shop, except that the sequence of activities tends to be in a line and is less flexible. In a batch process, dominant flows can be identified. The activities, while in-line, are disconnected from one another. Products are produced in batches, for example, to fill specific customer orders.

Victoria’s Secret customer order process is Make to stock (MTS) which provides faster service to customers from available stock and lower costs than a make to order process. It has higher flexibility for product customization. Most of Victoria’s Secret products are customized in different colors, sizes, and designs. In addition, the MTS gives you a strong competitive advantage through more efficient production planning, on-time deliveries, and higher product quality. The MTS process has a standard product line specified by the producer, not by the customer. The products are carried in inventory to immediately fulfill customer demand. Before customer demands the product, it is all ready in stock. If the product is not available, a back order can be placed. The MTS process is measured by service level and efficiency in replenishing inventory.

Victoria’s Secret fall into the process of low volume multiple products characteristics matrix were the product is produced in low volume with multiple variety. The life cycle of the product is medium it doesn’t last short and it doesn’t have a long life either. Firms utilizing batch processes provide similar items on a repeat basis, usually in larger volumes than that associated with job shops. Products are sometimes accumulated until a lot can be processed together. When the most effective manufacturing route has been determined, the higher volume and repetition of requirements can make more efficient use of capacity and result in significantly lower costs. Since the volume is higher than that of the job shop, many processes can be utilized in repetition, creating a much smoother flow of work-in-process throughout the shop. While the flow is smoother, the work-in-process still moves around to the various machine groupings throughout the shop in a somewhat jumbled fashion. This is described as a disconnected line flow or intermittent flow.

Victoria’s Secret process selection is influenced by various factors, labor supply and cost, customization, competition in the market, and state of technology. There is also competition with other department stores that sell similar products like Fruit of the Loom, Hanes, Calvin Klein, and Betsy Johnson. However, everybody knows Victoria’s Secret brand and that is beneficial for Victoria’s Secret.

Victoria’s Secret cannot adopt a mass customization method because it does not have standardized products with few options. With Victoria’s Secret process selection they do not customize their products for their customers. However their beauty products have different scents to give customers a variety. With Victoria’s Secrets other lines such as its intimate wear, it cannot be customized. However, it is distributed with different sizes and different colors to meet different customer’s wants and needs.

Inventory

Victoria's Secret is a retail brand of lingerie and beauty products, owned and run by the Limited Brands company. Victoria's Secret generates more than $4 billion in sales a year. It is the fastest subsidiary of Limited Brands and contributes 42% of corporate profits. More than 1000 Victoria's Secret retail stores are open in the United States. Products are also available through the catalogue and online business, Victoria's Secret Direct, with sales of approximately $870 million.

In the past decade, Victoria's Secret has incorporated software for data mining and analysis to further advance sales. Specifically, employees use a data warehouse that tracks the sales of every piece of merchandise by store in order to make decisions on the allocation of products. Applying this comprehensive tool, the company has significantly improved over its former system, which pieced together information from several databases that give questionable results.

This company uses a joint data warehouse and intranet application system. The result is based on MicroStrategy's DSS Server, a relational On-Line Analytical Processing (OLAP) server optimized for very large database (VLDB) analysis. MicroStrategy's DSS Web has access to the database and helps communication between the data warehouse and the browser. About 20 million rows of data are loaded into the system weekly. Over 1,000 queries are run each week, with the most frequently-executed queries coming from intranet users. The data warehouse that drives the application contains detailed information about the sales and inventory levels for each item in each store. The application enables associates to make decisions to improve their in-stock position and create individualized color/size models for each store.

Access to facts, on which to base allocation decisions, is especially significant in the initimate apparel business because merchandise normally comes in a dozen different sizes, in addition to many styles and colors. To maximize revenue, Victoria's Secret must recognize geographical variations in purchasing so that the distribution of merchandise adapts to serve the size and tastes of customers who regularly shop at the same store. Otherwise, sales opportunities are missed on unstocked items or poor sellers are left to be discounted.

Victoria’s Secret has about 20 percent growth rate per month in users. When a user queries the data warehouse and receives an answer, guided walk-throughs, tutorials, and customized help screens gives instructions for what actions to take based on the results of those analyses. The new intranet application program also lets associates access detailed information and take action based on the information they receive from the data. This definately makes it a lot easier to adjust to reorder products based on store's selling patterns and inventory.