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What makes service industries so distinct from manufacturing ones is their immediacy: the hamburgers have to be hot, the motel rooms exactly where the sleepy travelers want them, and the airline seats empty when the customers want to fly. Balancing the supply and demand sides of a service industry is not easy, and whether a manager does it well or not will, this author writes, make all the difference. In this rundown of the juggling feat service managers perform, the author discusses the two basic strategies—“chase demand” and “level capacity”—available to most service companies. He goes on to discuss several ways service managers can alter demand and influence capacity. The literature on capacity management focuses on goods and manufacturing, and many writers assume that services are merely goods with a few odd characteristics. Unfortunately, these researchers never fully explore the implications of these strange traits: A version of this article appeared in the November 1976 issue of Harvard Business Review.
A carrier needs a licence from the Australian Communications and Media Authority (ACMA) to operate facilities if they are used to supply telecommunications services to the public. Such facilities are called “network units”. There are no restrictions on the number of licences issued by the ACMA. Carriers must comply with licence conditions, including: The Minister can also impose other licence conditions on individual carriers, classes of carriers or all carriers. Sometimes the owner of the infrastructure does not want to be a licensed carrier and nominates a carrier to operate its facilities. It does this by asking the ACMA for a 'nominated carrier declaration”. Under this declaration, a carrier operates the facilities. Licensing fees include an application fee and an annual fee. The annual fee is calculated as a percentage of eligible carriers’ annual revenue and is applied to fund the cost administering the regulatory regime. Some larger carriers also must pay a levy to contribute to the universal services obligation. What types of facilities need a licence?Telecommunications companies need carrier licences or nominated carrier declarations to use network units to supply services to the public. Network units are basically transmission facilities. The following are the types of network units under the Telecommunications Act:
The Minister can determine more facilities if they need to be regulated. ExemptionsThere are carrier licensing exemptions for defence and intelligence operations, transport authorities, broadcasters and electricity supply bodies under the Telecommunications Act 1997. The Minister can also make a determination exempting specified network units, people or use of a network unit from carrier licensing obligations. This can happen if the obligations are deemed to be inappropriate or against the objectives of the Telecommunications Act 1997. Service providersThere are two types of service providers, carriage service providers and content service providers:
A carrier can be a carrier and a service provider. Service providers don’t need individual licences, but there are rules they must follow:
The ACMA can impose some other types of service provider rules under various regulations.
What the ACCC does
What the ACCC can't do
Consumers are entitled to a repair, replacement or refund if a product or service they buy doesn’t meet one of the basic rights, known as consumer guarantees. What the consumer is entitled to generally depends on:
In some situations, the consumer gets to choose the solution they prefer. Businesses can’t take away a consumer's right to a refund or replacement for faulty products or services. It’s illegal for businesses to rely on store policies or terms and conditions which deny these rights. For example, policies which say ‘no refunds’ or ‘no refunds or exchanges on sale items’.
A business has the right to assess the product or service before they provide a solution. Occasions when consumers aren't entitled to a repair, replacement or refundConsumers are not entitled to a repair, replacement or refund under the consumer guarantees if:
A major problem means the product:
SolutionsWhen a business sells a product with a major problem, or a product that later develops a major problem, it must give the consumer the choice of a refund or a replacement of the same type of product. A business must not deduct an amount from a refund to take into account the use a consumer has had of the product. A refund should be the full amount the consumer paid for the product. Refunds should be provided in the same form as the original payment, unless the business and consumer agree otherwise. A consumer can also choose to keep the product but be compensated for the drop in value caused by the problem. In some cases, a consumer can also be entitled to compensation for additional damages and loss. See Claiming compensation for more information.
A consumer purchases accommodation at a hotel in full using their credit card when booking. The hotel cannot provide the accommodation to the consumer because the hotel made an error with the booking and provided the room to someone else, with no other rooms available. The hotel must refund the money to the consumer’s credit card. The hotel can’t provide a refund to the consumer by way of giving them hotel loyalty points, unless the consumer chooses to accept this instead. However, if the consumer had purchased the accommodation booking using hotel loyalty points, the hotel can provide loyalty points back to the consumer as their refund, and the consumer can’t demand a cash refund instead. Who is responsibleBusinesses are responsible for resolving problems with products they sell to consumers. Businesses must not tell consumers to go to the manufacturer for a solution. However, for some consumer guarantees, consumers can choose to seek a solution from the manufacturer, rather than the business they bought the product from. If they do so, consumers will only be entitled to be compensated for the drop in value caused by the problem and, in some cases, other compensation. A manufacturer may offer to resolve the problem by providing a repair, refund or replacement, but consumers cannot demand this from the manufacturer.
A service has a major problem when it:
SolutionsWhen a service has a major problem, a consumer can choose to:
If the consumer has already paid upfront, they have the right to get some money back. How much money will depend on whether some or all of the services provided did not have problems, or whether they were provided at all. SolutionsWhen a product or service has a minor problem, the business must fix the problem or repair the product for free. The business does not have to offer a replacement or refund for a minor problem, although it can choose to do this.
When electronic products, like mobile phones, computers and music players, are repaired, consumers can lose their stored data. Businesses may also use refurbished products or parts when repairing products. Businesses have to warn consumers about both of these things by giving them a repair notice. When the business can’t or won’t fix a minor problemIf the business can’t or won’t repair or fix the problem within a reasonable amount of time, or at all, a consumer is entitled to:
What is a ’reasonable’ amount of time for a business to fix a problem will depend on the nature of the product or service. For example, it may take longer for a repairer to attend a house to fix an installed dishwasher than for a pair of pants to be repaired in-store. The right to return a productConsumers have the right to return a product if they think there’s a problem. The product does not have to be in its original packaging, but a business is entitled to ask consumers to provide some form of proof of purchase, such as a receipt. Responsibility for returning productsConsumers are responsible for returning products that can be posted or easily returned. Businesses are responsible for paying for the shipping costs or collecting faulty products that are large, heavy or hard to remove, such as:
This must be done within a reasonable time. Return costsIf the business confirms that the product does have a problem, it must reimburse the consumer for any reasonable return costs they have already paid. Consumers should keep receipts for postage or transport costs so that they can be repaid by the business. If the business finds that the product does not have a problem, it can make the consumer pay the collection and inspection costs. To do this, the business must give the consumer a reasonable estimate of these costs before collecting the product. Some problems with products may be the fault of the manufacturer, rather than the fault of the business who sold the product to consumers. For example, if the problem with the product is:
If a business provides a repair, replacement, refund, or other compensation to a consumer for these problems, the manufacturer must reimburse the business for these costs. This includes the costs of parts and labour that may be involved in providing a solution to a consumer. Manufacturers are entitled to assess the product in this situation. But they must not mislead businesses about their rights to have these costs repaid, or act unfairly against businesses that request repayment of these costs. Manufacturers also can’t use their contracts with businesses to take away businesses’ rights to be reimbursed for these costs. A business has 3 years to ask the manufacturer for reimbursement, from the earliest of:
If a business has a dispute with a manufacturer about repayment of these costs, it can take legal action. The business may wish to seek legal advice about this. Other resourcesClaiming compensation Repair notices Consumer rights and guarantees Consumer guarantees - a guide for consumers Consumer guarantees - a guide for businesses and legal practitioners Consumer guarantees: Repair, replace, refund brochure |