Chapter 2, Problem 2CS

Rapid-Lube

A huge market exists for automobile tune-ups, oil charges, 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, Rapid-Lube, Mobil-Lube, Jiffy-Lube and others have also developed strategies to accommodate this opportunity.

Rapid-Lube stations perform oil changes, lubrication, and interior cleaning in a spotless environment. The buildings are clean, usually painted white, and often surrounded by neatly trimmed landscaping. To facilitate fast service, cars can be driven through three abreast. At Rapid-Lube, the customer is greeted by service representatives who are graduates of Rapid-Lube U. The Rapid-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, 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 in the garage pit, removing the oil filler, 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 business model is to charge no more, and hopefully less, that gas stations, automotive repair chains and auto dealers, while providing better and faster service.

Discussion Questions

1. What constitutes the mission of Rapid Lube?

2. How does the Rapid-Lube operations strategy provide competitive advantage? (Hint: Evaluate how Rapid-Lube’s traditional competitors perform the 10 decisions of operations management vs. how Rapid-Lube performs them.)

3. Is it likely that Rapid-Lube has increased productivity over its more traditional competitors? Why? How would we measure productivity in this industry?