Is US Customer Service Always Useless?
Nov 28, 2013, 7:45 am
#46
Join Date: Apr 2006
Location: High Point, NC
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Still no explanation of how the logistics will work - just fast food restaurants and how no one can run next door to get change for a $5 or $10 bill "in a reasonable amount of time". Even though they almost always have multiple registers so the first to run out of change can be the "canary in the mine."
So Mr MBA, explain how all that money gets distributed, especially "every flight" using nice simple Operations and Management Science 101. No fixed location examples either. Just using 600 airplanes that are spread across the U.S. and some of Europe every day, likely not spending 2 nights in a row in the same place. And don't forget, you say it's easy to do for every flight. I'll be waiting for the expert to expound on his theories.
Oh, don't forget that airlines never know "exactly" how many people they'll have on board any given flight until the cabin door closes - how does an MBA not know that standby works because there are unexpected changes in the number of passengers on a flight. Or even for certain which flights will or won't operate on a given day.
Jim
So Mr MBA, explain how all that money gets distributed, especially "every flight" using nice simple Operations and Management Science 101. No fixed location examples either. Just using 600 airplanes that are spread across the U.S. and some of Europe every day, likely not spending 2 nights in a row in the same place. And don't forget, you say it's easy to do for every flight. I'll be waiting for the expert to expound on his theories.
Oh, don't forget that airlines never know "exactly" how many people they'll have on board any given flight until the cabin door closes - how does an MBA not know that standby works because there are unexpected changes in the number of passengers on a flight. Or even for certain which flights will or won't operate on a given day.
Jim
Nov 28, 2013, 10:16 am
#47
Join Date: Dec 2007
Location: SYR
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I worked for 10 years as a district manager in the Quick Service Restaurant (QSR) business... Here's what we needed to make our cash business work:
1) A Point-of-Sale System. Yes, cash registers. Its all about accountability. And comparing inventory to cash is not an acceptable method of accountability, because it provides no *personal* accountability.
2) A safe, or other locking equipment, to keep the change bank, and deposit in. This adds weight to the plane.
3) A method of picking up deposits each day. You could use a drop safe to drop the deposit into so its only picked up once a day. But how much weight would this add to a plane?
4) A method of replenishing the change bank. i.e. someone who takes all your $20's and turns them into $1 bills. Someone needs to call in that change order, so someone needs to be responsible on each shift to making sure you had enough change to operate until then next change run.
5) Separation of duties. The same person who prepares a deposit cannot be the same person who runs the POS system. This is a basic audit policy thats followed at McDonalds, and all QSR restaurants.
Now, some of you may say that many of these items should be in place today, since airlines already accept cash. Sure. They should be.
Considerations:
On a A319 with 124 seats. You could figure out a model on how many people pay cash. Lets say its 20%. So at $7 a drink, you probably need at least $3 in singles for all of those folks. So, for each flight lets say you need $100 in singles. Multiple this by... 8 flights a day that the average plane flies? You need close to $1000 in singles, presuming you are only going to get a change run once a day.
600 planes in the system * $1000 in singles, and you have a cash outlay of $600,000 as the float. Thats not chump change.
...
Can I say that in the 30 years or so that airlines have been charging for premium beverages, that *no company* is making change banks available for their FA's? To all of you that are saying this is easy... why is it that no one is doing it?
1) A Point-of-Sale System. Yes, cash registers. Its all about accountability. And comparing inventory to cash is not an acceptable method of accountability, because it provides no *personal* accountability.
2) A safe, or other locking equipment, to keep the change bank, and deposit in. This adds weight to the plane.
3) A method of picking up deposits each day. You could use a drop safe to drop the deposit into so its only picked up once a day. But how much weight would this add to a plane?
4) A method of replenishing the change bank. i.e. someone who takes all your $20's and turns them into $1 bills. Someone needs to call in that change order, so someone needs to be responsible on each shift to making sure you had enough change to operate until then next change run.
5) Separation of duties. The same person who prepares a deposit cannot be the same person who runs the POS system. This is a basic audit policy thats followed at McDonalds, and all QSR restaurants.
Now, some of you may say that many of these items should be in place today, since airlines already accept cash. Sure. They should be.
Considerations:
On a A319 with 124 seats. You could figure out a model on how many people pay cash. Lets say its 20%. So at $7 a drink, you probably need at least $3 in singles for all of those folks. So, for each flight lets say you need $100 in singles. Multiple this by... 8 flights a day that the average plane flies? You need close to $1000 in singles, presuming you are only going to get a change run once a day.
600 planes in the system * $1000 in singles, and you have a cash outlay of $600,000 as the float. Thats not chump change.
...
Can I say that in the 30 years or so that airlines have been charging for premium beverages, that *no company* is making change banks available for their FA's? To all of you that are saying this is easy... why is it that no one is doing it?
Nov 28, 2013, 10:30 am
#48
Join Date: Apr 2005
Location: The Internet
Programs: Alaska Mileage Plan
Posts: 714
You're a retired pilot. Did you do weight and balance calculations prior to every flight, so you could decide how much fuel to take on board, how much cargo you could carry, what you should load where, and whether you were within your takeoff and landing weight limits? Did you carry fuel reserves? Were there formulas you used to make all these calculations? Did you use computers to do this, and sanity check the figures yourself to make sure everything looked right? I am guessing that the answer to all of the above is "yes" because you are a retired pilot and not a dead pilot. Somehow it all worked! These formulas tend to be extremely conservative because when you get them wrong, you kill everyone on the plane and it's not very good business to kill your customers. However, the formulas definitely exist, and they do work pretty damn reliably. The fact that you're still alive is proof of this.
Now look at other parts of the operation. Have you noticed how good airlines have gotten at filling up planes compared even to 10 years ago? That's not by accident. In fact, my management science professor earned his PhD working in the field of airline revenue management, using KLM's operations for the basis of his research. A lot of the same techniques I've been discussing apply, but they're a whole lot more complicated than cash management. It's not hard to sell all the seats on the plane, but it's a really hard problem to sell all the seats on the plane for the maximum price. This is why a lot of really smart MBAs work in revenue management departments of airlines.
I would guess that at airlines, cash management is something that MBAs aren't looking at; it's just something that ends up being buried under accounting somewhere with some accountants overseeing it. The operations procedures that you get as a result will be more about carefully tracking all the money and making sure you don't lose any versus having enough change to provide good customer service. All the same tools and techniques that you use to manage other operations involving 600 airplanes and every flight can apply to this problem as well.
Actually, the model you are asking for is--for the most part--already built. The caterers need to know which items and how many to load on the plane before each flight. Remember how catering used to be a serious disaster right after buy on board launched, with too few meals (and then too many) always being loaded? It took awhile, but having gathered enough data on customer habits and preferences based on time of day and distance of flight, caterers now use very reliable computer models to ensure there is (usually) adequate stock. MBAs build this kind of stuff.
If I were hired as a consultant to solve this problem, I would adjust the menu and pricing so that change would need to be made less frequently. However, I would also update the model used to forecast catering to also forecast needed petty cash, and integrate the petty cash operations procedures with the catering procedures (which probably hasn't been done). It would be a new and different way of doing things, but it's certainly not impossible. You're not going to get things right 100% of the time but you don't get catering right 100% of the time either. The objective is not perfection, it's just to do better (hopefully a lot better) than we do today. Ideally, if change is no longer a problem, you'll sell more on board.
To the guy talking about change banks and safes and all that stuff... that's just silly. You already have a point of sale system that can issue receipts in order to support buy on board, every airline selling things onboard has a way to issue a receipt. And you just keep the cash in a canvas zip bank deposit envelope. You can hold people accountable by number of items stocked + starting cash - number of items sold * sales = cash + credit card slips + inventory at the end of the flight. This is easy to count down after each flight if you're issuing receipts. Airports are secure facilities, you don't need to worry about any sort of violent robbery or security beyond "counting down" at the end of each flight. Audit is easy, the caterer audits the inventory and the FAs count down the money, at the end the records need to match (and the caterer doesn't have any incentive to help corrupt FAs or vice-versa). I am willing to bet that the change fund for each airplane would amount to a lot less than $1000 per flight, because most customers do not pay in cash and not all customers will need change. However, even going with your inflated figures, the interest that you'll get on $600,000 in bank deposits amounts to only $6,000 per year (at most). And you're not really losing even that much (probably less than half) because you deposit your cash at the end of each day and withdraw what you need at the beginning of the following day, meaning that your cash account will only "close" for the day (losing interest) on the cash you need for operations taking place outside of normal business hours. I'll bet lost sales from not having proper change is a lot more than the trivial amount of money you would lose on interest.
Now look at other parts of the operation. Have you noticed how good airlines have gotten at filling up planes compared even to 10 years ago? That's not by accident. In fact, my management science professor earned his PhD working in the field of airline revenue management, using KLM's operations for the basis of his research. A lot of the same techniques I've been discussing apply, but they're a whole lot more complicated than cash management. It's not hard to sell all the seats on the plane, but it's a really hard problem to sell all the seats on the plane for the maximum price. This is why a lot of really smart MBAs work in revenue management departments of airlines.
I would guess that at airlines, cash management is something that MBAs aren't looking at; it's just something that ends up being buried under accounting somewhere with some accountants overseeing it. The operations procedures that you get as a result will be more about carefully tracking all the money and making sure you don't lose any versus having enough change to provide good customer service. All the same tools and techniques that you use to manage other operations involving 600 airplanes and every flight can apply to this problem as well.
Actually, the model you are asking for is--for the most part--already built. The caterers need to know which items and how many to load on the plane before each flight. Remember how catering used to be a serious disaster right after buy on board launched, with too few meals (and then too many) always being loaded? It took awhile, but having gathered enough data on customer habits and preferences based on time of day and distance of flight, caterers now use very reliable computer models to ensure there is (usually) adequate stock. MBAs build this kind of stuff.
If I were hired as a consultant to solve this problem, I would adjust the menu and pricing so that change would need to be made less frequently. However, I would also update the model used to forecast catering to also forecast needed petty cash, and integrate the petty cash operations procedures with the catering procedures (which probably hasn't been done). It would be a new and different way of doing things, but it's certainly not impossible. You're not going to get things right 100% of the time but you don't get catering right 100% of the time either. The objective is not perfection, it's just to do better (hopefully a lot better) than we do today. Ideally, if change is no longer a problem, you'll sell more on board.
To the guy talking about change banks and safes and all that stuff... that's just silly. You already have a point of sale system that can issue receipts in order to support buy on board, every airline selling things onboard has a way to issue a receipt. And you just keep the cash in a canvas zip bank deposit envelope. You can hold people accountable by number of items stocked + starting cash - number of items sold * sales = cash + credit card slips + inventory at the end of the flight. This is easy to count down after each flight if you're issuing receipts. Airports are secure facilities, you don't need to worry about any sort of violent robbery or security beyond "counting down" at the end of each flight. Audit is easy, the caterer audits the inventory and the FAs count down the money, at the end the records need to match (and the caterer doesn't have any incentive to help corrupt FAs or vice-versa). I am willing to bet that the change fund for each airplane would amount to a lot less than $1000 per flight, because most customers do not pay in cash and not all customers will need change. However, even going with your inflated figures, the interest that you'll get on $600,000 in bank deposits amounts to only $6,000 per year (at most). And you're not really losing even that much (probably less than half) because you deposit your cash at the end of each day and withdraw what you need at the beginning of the following day, meaning that your cash account will only "close" for the day (losing interest) on the cash you need for operations taking place outside of normal business hours. I'll bet lost sales from not having proper change is a lot more than the trivial amount of money you would lose on interest.
Last edited by TProphet; Nov 28, 2013 at 11:00 am
Nov 28, 2013, 12:45 pm
#49
Join Date: Dec 2011
Location: PHL / SFO
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Posts: 797
I said I would shut up, but after a few screwdrivers PHL-PHX I had another one of my crazy ideas. Install an ATM that dispenses only singles and $5s in every plane - boom! Contract out the maintenance, replenishment and what-not, charge the operator a placement fee, they in turn pass on the fee to the customers (i.e. Mr/Mrs Kayak) at $2.50 a pop (everyone's accustomed to that, right?) - the airline accepts correct change only, the passenger gets his tin of Pringles - everyone's a winner!
Yon know what - I need to get me to business school. I'm wasted in I.T. crisis management.
Happy turkey day everyone. I'm enjoying this thread almost as much as the chicken noodle soup. 
Yon know what - I need to get me to business school. I'm wasted in I.T. crisis management.
Happy turkey day everyone. I'm enjoying this thread almost as much as the chicken noodle soup.
Nov 28, 2013, 4:41 pm
#50
Join Date: Dec 2007
Location: SYR
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TProphet - you've clearly never worked in a cash business before...
No one cares about receipts. Thats not what the Point-of-sale is for... Its for tracking sales, charging accurately, and providing an audit trail.
Yeah - very easily stolen, and canvas is cut with a pocket knife. What other suggestions do you have? There's a reason cash business use safes.
Oh yeah? How do you hold individuals responsible in this case? 3 FA's on the plane... inventory is off. Who specifically is held responsible? Comparing inventory to cash sales has zero personal responsibility. You cannot discipline someone unless you can prove it is *that* person who caused the cash loss.
The vast majority of thefts is by employees... not bank robbers. The point of securing the funds is not about preventing a stick-up. Its about preventing employees from walking off with money.
Yeah - thats not how it works. You see, in order to replenish the change banks, you need a master change facility at each station. The liability is still the $600,000 in change banks that you'd need country-wide. You dont make a deposit to a bank every night, and withdraw every morning. You do that internally against whoever is replenishing the change bank. And then the master change facility gets its replenishment from Brinks or another 3rd party cash company. Your cash account will always stay at the amount that is needed for all your operations period - not just outside normal business hours. I guess they dont teach operational accounting at whatever school you got your MBA in.
Yeah - very easily stolen, and canvas is cut with a pocket knife. What other suggestions do you have? There's a reason cash business use safes.
And you're not really losing even that much (probably less than half) because you deposit your cash at the end of each day and withdraw what you need at the beginning of the following day, meaning that your cash account will only "close" for the day (losing interest) on the cash you need for operations taking place outside of normal business hours.
Nov 28, 2013, 4:42 pm
#51
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Nov 29, 2013, 11:37 am
#52
Join Date: Apr 2006
Location: High Point, NC
Programs: None
Posts: 9,171
I said I would shut up, but after a few screwdrivers PHL-PHX I had another one of my crazy ideas. Install an ATM that dispenses only singles and $5s in every plane - boom! Contract out the maintenance, replenishment and what-not, charge the operator a placement fee, they in turn pass on the fee to the customers (i.e. Mr/Mrs Kayak) at $2.50 a pop (everyone's accustomed to that, right?) - the airline accepts correct change only, the passenger gets his tin of Pringles - everyone's a winner!
Jim
Nov 29, 2013, 1:51 pm
#53
Join Date: Apr 2006
Location: High Point, NC
Programs: None
Posts: 9,171
bkafrick,
Back in the day when mainline only accepted cash, US had a safe in each crew room - not to hold change funds for disbursement but only for FAs to deposit the money they'd collected on their trip (1-4 days of flying). The lead FA was in charge of collecting the cash from the other FAs and maintaining a record of what was sold - usually done either daily or after each segment. For FAs flying more than a few segments per trip, the accumulated cash provided something of a change fund although with no planned number of $1s and $5s - they had what they collected of those.
One problem was that cash turned in only matched the record of what was sold. With FC alcohol being free, it was easy to use FC alcohol to make the recorded sales match the money collected from alcohol sales in coach.
Another problem was that the accumulated cash was normally kept in the lead FAs bag and there is the occasional report of theft (attempted or actual) from FAs bags.
The crew room safe and accounting of inventory sold was an attempt to stop theft - I believe that prior to those steps the cash received was given to catering, which brought a lot of other possible sticky fingers into the picture.
BOB is completely different, starting in being a 3rd party function - they provide the BOB "meals" and a rep collected the cash at the plane after every segment that served BOB. So it wasn't US' problem.
Ultimately, US went to the hand-held readers and accepted cc sales only. That removed cash from the equation completely.
Jim
Back in the day when mainline only accepted cash, US had a safe in each crew room - not to hold change funds for disbursement but only for FAs to deposit the money they'd collected on their trip (1-4 days of flying). The lead FA was in charge of collecting the cash from the other FAs and maintaining a record of what was sold - usually done either daily or after each segment. For FAs flying more than a few segments per trip, the accumulated cash provided something of a change fund although with no planned number of $1s and $5s - they had what they collected of those.
One problem was that cash turned in only matched the record of what was sold. With FC alcohol being free, it was easy to use FC alcohol to make the recorded sales match the money collected from alcohol sales in coach.
Another problem was that the accumulated cash was normally kept in the lead FAs bag and there is the occasional report of theft (attempted or actual) from FAs bags.
The crew room safe and accounting of inventory sold was an attempt to stop theft - I believe that prior to those steps the cash received was given to catering, which brought a lot of other possible sticky fingers into the picture.
BOB is completely different, starting in being a 3rd party function - they provide the BOB "meals" and a rep collected the cash at the plane after every segment that served BOB. So it wasn't US' problem.
Ultimately, US went to the hand-held readers and accepted cc sales only. That removed cash from the equation completely.
Jim
Nov 29, 2013, 1:57 pm
#54
Join Date: May 2005
Location: PHX
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Posts: 3,246
It isn't as simple as it sounds. You seem to have hit most of the obstacles but one thing that I don't think has been mentioned is who is going to make the change from the master change facility?
The change needed for the next flight would have to be known before landing in most cases. So to play this out an FA would have to reconcile everything before landing and determine change needed for the next flight. That has to then be communicated to the master change facility and the facility has to deliver the change before boarding begins on the next leg. Why before boarding? Because the FA's have other duties during boarding and cannot be distracted by counting money. Plus if there was a crew change what happens to the money from the previous leg? It can't be left unattended on the plane. Take it to the GA? Sure cause they aren't busy doing anything else.
So you are working with a very small window of opportunity. Might not be impossible at smaller outstations but at a hub, how many people are you going to have running change around?
I'm sure that formulae can be used to determine how much to stock, how much to charge, etc, etc. But that doesn't help with the simple logistics of making change.
I'm by no means an expert on buses in major cities but just using London as an example. A city that absolutely has a ton of buses. For the most part you can't pay cash on the bus and have to buy the ticket before boarding and you have to do so with exact change. Wonder why that is.
Nov 29, 2013, 4:40 pm
#55
Join Date: Dec 2012
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McDonalds has cash registers, the airplanes don't. McDonalds are mostly/all franchises - the franchisee (through the store manager) is responsible for filling the till every morning. No one person is responsible for every McDonalds in the U.S. or the world. US has more planes that almost all McDonalds franchisee's. And the planes don't sit in constant locations like McDonalds. A change fund would be magnitudes more difficult to administer with the planes than for even a large McDonalds franchisee.
Jim
Jim
I don't buy the tremendous trouble with this. If you are going to offer food for sale and only accept cash on certain flights than it is ridiculous not to have a way for FAs to be able to make change.
US seeks revenue for food and beverage sales. They shouldn't then encumber themselves by not being able to make change. Either offer a food/bev for sale with cash, or don't. They need to commit.
Nov 29, 2013, 4:43 pm
#56
Join Date: Dec 2012
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And for all those who have the attitude that unless the poster has the solution, than they shouldn't complain-- I say hogwash!!!
I can't fix a car engine, yet when I buy a car I expect it to drive well. I can't cook a good rack of lamb, but I expect when I order it off the menu it will be edible. Just b/c posters may not have the "solution" doesn't mean they shouldn't be able to raise the problem.
Cheers
I can't fix a car engine, yet when I buy a car I expect it to drive well. I can't cook a good rack of lamb, but I expect when I order it off the menu it will be edible. Just b/c posters may not have the "solution" doesn't mean they shouldn't be able to raise the problem.
Cheers
Nov 29, 2013, 4:46 pm
#57
Join Date: Dec 2012
Location: Charlotte
Programs: Hilton Diamond, Marriott Platinum Elite, AA Platinum Pro, Hertz Presidents
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I'll go you one further - during the day, if someone runs out of ones, or whatever, they can run to the bank and get change. It's hard to do that at 30,000 feet.
I don't know how many times I've heard on flights that "correct change is always appreciated." If anyone's traveled more than a few times, they should know that change can very easily be in short supply. Similarly, I've also been to restaurants, grocery stores, gas stations, etc, that have posted signs saying "we need $1s/$5s/whatever." OP, do you get mad when you see that in one of those instances?
The resulting situation was a choice of the OP to do a SDC and forego lunch. If food was so important and given the "wonderful" onboard options for lunch, I'd have suggested the OP get lunch and then try to move up. You can't rely on airlines to be properly catered, or still have an item until they get to you. Quantities are limited.
I empathize with the apathetic FA, but it sounds like there's not a whole lot that can be done.
I don't know how many times I've heard on flights that "correct change is always appreciated." If anyone's traveled more than a few times, they should know that change can very easily be in short supply. Similarly, I've also been to restaurants, grocery stores, gas stations, etc, that have posted signs saying "we need $1s/$5s/whatever." OP, do you get mad when you see that in one of those instances?
The resulting situation was a choice of the OP to do a SDC and forego lunch. If food was so important and given the "wonderful" onboard options for lunch, I'd have suggested the OP get lunch and then try to move up. You can't rely on airlines to be properly catered, or still have an item until they get to you. Quantities are limited.
I empathize with the apathetic FA, but it sounds like there's not a whole lot that can be done.
Nov 29, 2013, 4:49 pm
#58
Join Date: Dec 2012
Location: Charlotte
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Its crazy how you think it would be so easy or a "no-brainer" for airlines to have a change bank available. I'd love for you to give an example on how you think this might be accomplished?
Yes, take CCs... Sure. Thats the only viable solution here. Change is not possible. At all.
Yes, take CCs... Sure. Thats the only viable solution here. Change is not possible. At all.
Nov 29, 2013, 4:56 pm
#59
Join Date: May 2005
Location: PHX
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Posts: 3,246
If I was a FA I can assure you I would have a couple 5s and $20 worth of 1s on me to start my day.
I don't buy the tremendous trouble with this. If you are going to offer food for sale and only accept cash on certain flights than it is ridiculous not to have a way for FAs to be able to make change.
I don't buy the tremendous trouble with this. If you are going to offer food for sale and only accept cash on certain flights than it is ridiculous not to have a way for FAs to be able to make change.
Using your own analogy, if you take your car in because it's making a noise and the experienced mechanic tells you what is wrong and that it's going to cost a fortune to fix, do you also tell him that you don't buy the tremendous trouble with this?
And for all those who have the attitude that unless the poster has the solution, than they shouldn't complain-- I say hogwash!!!
I can't fix a car engine, yet when I buy a car I expect it to drive well. I can't cook a good rack of lamb, but I expect when I order it off the menu it will be edible. Just b/c posters may not have the "solution" doesn't mean they shouldn't be able to raise the problem.
Cheers
I can't fix a car engine, yet when I buy a car I expect it to drive well. I can't cook a good rack of lamb, but I expect when I order it off the menu it will be edible. Just b/c posters may not have the "solution" doesn't mean they shouldn't be able to raise the problem.
Cheers
It's not impossible to offer adequate service this way. It's just not practical to ensure that there is always adequate change on board for a cash system. Could and should the airline go cashless? Maybe, maybe not as there are pros and cons to both systems.
Nov 29, 2013, 5:00 pm
#60
Join Date: Dec 2012
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You do realize you basically are saying the frequent traveler should know US can't offer adequate service reliably? And you are blaming OP for assuming an airline would operate efficiently. "Look US sucks at customer service, and as a frequent flyer, you should know this" -essentially your view.