THE DYNAMIC SIMULATION MODULE

7.2.1. Resources Allocated for Improving Employee Satisfaction

With reference to the results of the sensitivity analysis, the key leverage point in the dynamic simulation module is found to be the employee satisfaction, since small changes to employee satisfaction will cause considerable changes to the behaviour of the model. It is also found that varying employee satisfaction from a level of 0 to 100 with an incremental increase of 25 causes a greater percentage changes in customer satisfaction, the number of existing customers as well as the sales volume, compared with varying other parameters such as satisfaction with retail service quality, satisfaction with product quality, spending on advertising, and spending on training. This suggests that Hunter Douglas Gallery should allocate more resources for improving employee satisfaction so as to achieve greater improvements in different aspects such as customer satisfaction and the sales volume. Furthermore, Hunter Douglas Gallery should maintain employee satisfaction at a minimal level of 50 but it is highly recommended to improve it to a level of 75. This is because a relatively small effort made to improve employee satisfaction from a level of 50 to 75 could cause a leap in enhancing customer satisfaction, the number of existing customers and the sales volume in Hunter Douglas Gallery. This is considered the most effective and economical way to increase customer satisfaction, and thus worthy of the store’s investment. Maintaining employee satisfaction at a level of 75 is good enough; further improvement would not be considered effective in increasing customer satisfaction based on the results of the sensitivity analysis. Such findings provide

Hunter Douglas Gallery with references to allocate the resources for improving employee satisfaction for the sake of increasing customer satisfaction and profits to a greater extent. In order to improve employee satisfaction, Hunter Douglas Gallery should allocate resources for enhancing monetary rewards, working environment, and employee training, which, according to the dynamic simulation module, are the three core components affecting employee satisfaction.

7.2.2. The Focus on Improving Satisfaction with Product Quality

Despite the importance of employee satisfaction, merely improving it is not enough for the window fashions retailer to gain long-term business growth and customer relationships. This is because there are still other factors influencing customer satisfaction, the number of existing customers and the sales volume. From the results of the sensitivity analysis, customer satisfaction with product quality is another significant factor after employee satisfaction. It is found that the percentage changes of customer satisfaction, the number of existing customers and the sales volume are considerably higher when customer satisfaction with product quality increases from a level of 75 to 100, compared with increasing that from a level of 50 to 75. Once the window fashions retailer achieves the employee satisfaction at a level of 75, it is recommended that the next focus of improving customer satisfaction is to enhance satisfaction with product quality. Achieving a breakthrough in the satisfaction with product quality at the level of 75 helps Hunter Douglas Gallery maximise customer satisfaction, acquire more existing customers and increase the sales volume to a greater extent. Furthermore, comparing the results of the sensitivity analysis, it is found that the percentage increase in customer satisfaction, the number of existing customers and the sales

volume by varying satisfaction with product quality is greater than the percentage change by varying satisfaction with retail service quality. Satisfaction with product quality is thus considered to be more crucial to achieve business growth and to generate more profits than satisfaction with retail service quality is. To improve customer satisfaction with product quality, Hunter Douglas has to focus on product features, aesthetics, and customer-perceived quality, as they are the three core components influencing satisfaction with product quality. Generally speaking, the findings suggest Hunter Douglas spending efforts and resources on continuously improving its product quality, apart from employee satisfaction, so as to enhance customer satisfaction and loyalty as well as to gain long-term profits.

7.2.3. Importance of Satisfaction with Retail Service Quality and Spending on Advertising

In regard to the results of the sensitivity analysis, satisfaction with retail service quality and spending on advertising are positively associated with customer satisfaction, the number of existing customers and the sales volumes. Improving satisfaction with service quality and spending on advertising could result in a steady increase in customer satisfaction, the number of existing customers and the sales volume. Moreover, satisfaction with retail service quality and spending on advertising are ranked after satisfaction with product quality in terms of their sensitivity. This suggests that these two parameters should not be neglected when Hunter Douglas Gallery formulates marketing strategies to improve customer satisfaction and profits. The findings help Hunter Douglas Gallery easily predict and control the expected outcomes of increasing satisfaction with retail service

quality and spending on advertising. This would be beneficial for Hunter Douglas Gallery to decide appropriate strategies in order to increase customer satisfaction.

7.2.4. Importance of Spending on Training

Although spending on training is the least sensitive parameter, it does not mean that it is unimportant, for it can also increase customer satisfaction, the number of existing customers and the sales volume when an incremental increase of $2,500/month is made on the spending on training. From the dynamic simulation module, spending on training is an indirect parameter that affects employee satisfaction with training, which in turn affects employee satisfaction and thus customer satisfaction. This explains why spending on training is less sensitive to customer satisfaction. However, as mentioned previously, employees often require knowledge to serve customers in a better way. Regular training is essential for maintaining employee satisfaction, in particular when introducing new products. Therefore, spending on training should not be overlooked when Hunter Douglas Gallery attempts to improve employee satisfaction to a level of 75 so as to maximise customer satisfaction. These findings suggest Hunter Douglas Gallery be aware of the importance of spending on training when considering to improve employee satisfaction and customer satisfaction.

7.2.5. Workflow Improvement to Shorten the Order Lead Time

Regarding the results of policy analysis, shortening the order lead time is found to be an effective way to improve customer satisfaction. Customer satisfaction, customer loyalty, the number of existing customers and sales volume are greatly improved with a leap in percentage when the order lead time is further decreased

from one and a half months to one month. Regarding Hunter Douglas, the average order lead time is about two months. Decreasing the order lead time from two months to one and a half months is possible in Hunter Douglas by improving employee satisfaction and thus the order completion efficiency. However, decreasing the order lead time from one and a half months to one month becomes difficult due to the time needed (at least three weeks) to manufacture the blinds. In this circumstance, improvement on workflow is suggested to facilitate the manufacturing and ordering process so as to shorten the order lead time to about one month. Such improvement may hinder the normal operation of the window fashions retailer. It is therefore suggested that Hunter Douglas Gallery should create a detailed plan for the changes, such as describing the office routine and providing training to employees, so that employees can adapt quickly to the new workflow. However, decreasing the order lead time to one month is perhaps a challenging task and requires lots of efforts and investments, and so it is also recommended that Hunter Douglas Gallery should evaluate all possible means of increasing customer satisfaction before deciding to adopt a strategy for maximising customer loyalty and profits.