Case Analysis: Minit-Lube
Case Analysis: Minit-Lube
A substantial market exists for automobile tune-ups, oil changes, and lubrication service 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 other tire/service dealers. However, Minit-Lube, Mobil-Lube, Jiffy-Lube and others have also developed strategies to accommodate this opportunity.
Minit-Lube stations perform oil changes, lubrication, and interior cleaning in a spotless environment. The buildings are clean, painted white, and often surrounded by neatly trimmed landscaping. To facilitate fast service, cars can be driven through three abreast. At Minit-Lube, the customer is greeted by service representatives who are graduates of Minit-Lube U. The Minit-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, and 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 is 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 idea is to charge no more, and hopefully no less, than gas stations, automotive repair chains, and auto dealers, while providing better services.
1. What constitutes the mission at Minit-Lube? (10 points)
The mission statement for Minit-Lube is to provide fast, reliable and superior services in a customer friendly environment while ensuring lowest
possible fares pertaining to the oil changes, lubrication and interior cleaning to the vehicle owners in the USA as comparison with gas stations, auto dealers and automotive repair chains.
2. How does the Minit-Lube operations strategy provide competitive advantage? (Hint: Evaluate how Minit-Lube’s traditional competitors perform the 10 decisions of operations management vs. how Minit-Lube performs them). (25 points)
Minit-Lube operations strategy provides the organization advantage over its competitors in the following ways:
Product Design: Minit-Lube concentrates only on lubricating services of automobiles as opposed to its competitors, by providing fast service and as per convenience to the customers. The superior service mechanism has been designed to do service quickly 3 cars at a time. Service process is quick and efficient to the satisfaction of customers as each of the three bays is handled by a team of three persons. Because Minit-Lube has a narrow product strategy, such as “lubricating automobiles”, it allows them to be more focused and efficient with its service operations.
Quality Strategy: Quality exceeds normal standards as all employees are neatly dressed and fully trained from Minit-Lube school. Because of limited task variety, high repetition of work, good personnel training, and use of handy manuals, quality is relatively easy to maintain for Minit-Lube.
Process Strategy: The process strategy of Minit-Lube allows its employees to stay focused on doing their jobs well. It is not a general purpose garage or gas station as compared to its traditional competitors. Efficient use of human resource enables fast service provision as three workers simultaneously work on a car to provide oil-change services.
Location Strategy: Location premises are spotless with appealing surrounding environment and are usually conveniently placed near residential areas.
Layout Strategy: Layout designs of service bays are planned in such a manner that all the service tasks are carried out without any loss of any time. The three bays are designed specifically for lubrication and vacuuming tasks to minimize wasted movement on the part of the employees and to contribute to the speedier service.
Supply Chain Strategy: Purchasing is facilitated by negotiation of large purchases and custom packaging.
Human Resources Strategy: Well trained staff graduated from Minit-Lube school, ensuring cost effectiveness by building good customer relationships and providing speedy and accurate service. Each individual specializes in its own work enabling the maximum level of service.
Inventory: Inventory investment is relatively low, and they should expect a high turnover. Inventory investment is limited. Scheduling: Scheduling of services is provided in least possible time frame, with use of efficient human resource in order to meet customer schedules. Scheduling is quite straightforward at Minit-Lube with similar times for most cars.
Maintenance: Minit-Lube provides reliable maintenance solutions because of their trained staff and superior operations management. There is relative little equipment to be maintained, therefore little preventive maintenance required. With three bays and three systems, there is backup available in the case of failure.
To conclude, Minit-Lube differentiates itself from other service providers by providing fast, reliable and superior services at the lowest possible cost in a customer friendly environment.
3. Is it likely that Minit-Lube has increased productivity over its more traditional competitors? Why? How would we measure productivity in this industry? (15 points)
The main criteria of measuring productivity of service providers such as Minit-Lube is differentiation, flexibility and cost involved in their service provisions. The Minit-Lube has distinguished itself from its rival automobile service providers by differentiating as a narrow service provider limited to automobile lubricating services rather than a general servicing of automobiles. Its approach is flexible and responds quickly to the needs and convenience of customers. The service provided is better, quick and cost competitive. Full satisfaction of customers is its Motto. Due to these approaches for the last three decades of its existence, the productivity of Minit-Lube is increasing as compared to other traditional competitors. [pic]