Question

The WIZARD system at Avis

It is possible to rent cars at almost every major airport and city centre in the world, and there is

invariably intense competition to attract and keep customers. Since the hire companies all offer

similar ranges of relatively new vehicles, and the reliability of these cars is taken for granted by

most customers, competition is generally on service and/or price. The most critical service

factor is the availability of the desired category (size and specification) of car, and the speed

with which all the hire contract paperwork can be completed, so that the customer is not

unnecessarily delayed. This depends on the effectiveness of the hire company’s planning and

control system. One of the most important Avis sites in Belgium is the operation at Brussels

National Airport at Zaventem, which deals predominantly with business customers, and hires

out up to 200 cars on a busy day. Avis’s advertisement, targeted at the business market,

emphasizes its ability to process customers quickly and efficiently. The objective is to complete

the transaction in less than two minutes and this is facilitated by Avis’s well-developed

computer system, known as WIZARD, which handles all reservations, preparation of hire

contracts at the service desks, inventory management and invoicing systems. WIZARD is a

globally integrated system, with over 15,000 terminals in Avis branches worldwide, allowing

international reservations to be made with accuracy and certainty, and helping to maximize the

utilization of vehicles throughout the network.

Regular customer surveys and analyses of actual demand patterns are carried out to determine

the customers’ preferences in terms of type and category of vehicles, providing a guide to the

Belgian fleet composition, which is managed from the central ‘clearing house’ at Machelen.

Because each of the Belgian branch offices has access to a pool of cars held at Machelen, their

local buffer stock requirements can be minimized. The requirements for the movement of car

inventory between branches and between countries is centralized in this way, allowing the

branches to concentrate on the task of providing good customer service. Each regular business

customer has a unique reference number in WIZARD, allowing reservations to be made and

rental contracts to be completed quickly, with only three pieces of information: the customer’s

number, the type of car required and the duration of the hire. This type of transaction is usually

completed within two minutes, after which the customer goes directly to the car park and

collects the car.

Questions

1. What do you see as the main planning and control tasks of the Wizard system?

2. How would you evaluate the effectiveness of the planning and control activity at Avis?

Answer 1

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1. What do you see as the main planning and control tasks of the Wizard system?

The main task of the WIZARD system is to ensure that any part of the Avis network has enough of the right type of cars at any time to satisfy all of ‘pre-booked’ demand and a reasonable proportion of unexpected demand. In addition it must build in buffer stocks of cars and sufficient flexibility to cope with unplanned events such as car breakdown or a customer not returning a car in the right place or at the right time. Finally, an important part of the Avis WIZARD system will be its ability to know exactly which cars are where at any point in time and use the information about future demand to predict how many of which type of car will be in a particular location at any point in the future.

2. How would you evaluate the effectiveness of the planning and control activity at Avis?

Two major measures would be those concerned with customer service and car utilisation. In fact there is a trade-off between the two. The system could ensure very high levels of customer service in terms of car availability by planning to have large numbers of cars at every point in the network. The chances of a customer turning up unexpectedly and wanting to hire a car but being unable to would be very low and the consequences of not being able to cope with unexpected events such as breakdown would also be low. However, this would obviously means low car utilisation and therefore high costs. Conversely, the system could minimise the number of cars at each part of the network, increase car utilisation substantially but at the cost of disappointing many customers. The effectiveness of the WIZARD system could be measured in how far it was able to overcome this trade-off between operating cost and availability.