for the scenario below:
1) Apply the qualitative analysis by identifying at least 3
issues in the above process. Analyse these issues by using
a. Adding-value and Waste Analysis
b. Issue register, If you find that there are more than three
issues, you can focus on the three issues that have the highest
impact.
2). Calculate the cycle time efficiency of the as-is process.
You can assume a working week of 40 hours. In case there is missing
information, you can make assumptions about the missing information
(e.g. assume a given processing time for a task). In this case, you
have to explicitly state your assumptions.
3) Propose a set of changes in the process. For each change, you
should provide: a. A brief description of the process change b.
Which issue(s) are being addressed by the proposed change c. How
feasible is this change? In other words, how likely it is that the
change can be implemented in a way that the benefits of the change
exceed the costs in the medium-term (six months to one year
timeframe). If the change requires an upfront investment, describe
what investment is needed and how likely it is that this investment
is justified given the impact of the issue that is being
addressed.
4) Draw a "to-be" BPMN model.
Scenario
Fotof provides photography services in the fields of family
photography, personal event photography (e.g. weddings and party
photography) and commercial photography (mainly corporate events
photography). With a portfolio of 25 photo studios, Fotof Studio is
the largest chain of photo studios in Northern Europe. Fotof's 2014
turnover was 17.6 Million euros, out of which 25% from sales to
corporate customers and the rest from private customers.
One of core process of Fotof is its booking-to-cash process, which
goes all the way from the moment a customer makes a booking for a
photo shooting session, through the order placement, and up to the
moment the customer pays and obtains the ordered pictures. In 2014,
Fotof received 10K orders from commercial customers, and 80K orders
from private customers.
Booking-to-cash process
The process starts when a customer makes a booking for a shooting
session at a photo studio. A booking can be done via phone or via
e-mail addressed directly to a specific photo studio. The request
is handled by a customer service representative at the photo
studio. Each studio employs two customer service representatives: a
senior one, who is also manager of the studio, and a junior one.
The customer service representative enters the details of the
booking into the photo studio information system. The entered data
includes
- Customer data (full name, phone number, e-mail, and if applicable
company name, company address and company registration number for
invoicing purposes)
- Booking data: start of the session, duration, type of shooting
(family, personal event or corporate event) whether the shooting
session is in-studio or "on location", special equipment required
(e.g. lighting equipment)
The booking is assigned to one of the photographers of the studio
(there are on average 3.5 photographers per studio). On average, an
in-studio session lasts 45 minutes, while an on-location session
lasts 3.5 hours (including transportation time). 20% of private
customer shootings and 100% of corporate customer shootings are
on-location.
After a photo shooting session, the photographer uploads the
pictures to a file server. Eventually, a technician (2 technicians
per studio on average) cleans up the pictures by deleting
duplicates and failed shots. Later the technician edits the
remaining shots and arranges them into a photo gallery using a
dedicated photo studio software tool. Once the gallery is
completed, the customer is notified by e-mail. The notification
includes an URL where the customer can find the pictures.
Customers can view the gallery, select the pictures they wish to
order in print (and how many copies) and those they wish to get in
digital copy (full resolution). Customers can also annotate a
selected picture in order to ask for additional editing (special
requests). When placing their order, customers can specify whether
they will pick-up the printed copies at the studio or have them
delivered by post. In the latter case, a shipment fee is added to
the order.
Once the customer has places an order, a technician performs
additional editing (if required by the customer). In the case of
special requests, the technician may need to communicate with the
customer by e-mails or phone to clarify the request and to
determine how to fulfill it, and whether the special request will
entail an additional fee and how much. If printouts are required,
the technician prints
them out, puts them in an envelope and drops them in the studio's
counter. Digital copies are placed on a dropbox folder with the
order number (but the link is only shared with the customer after
payment).
Once the pictures are ready, a customer service representative
determines the amount to be invoiced (including additional fees for
special requests), produces the invoice and sends it to the
customer. The customer can pay by bank transfer or directly at the
studio, for example when they come to pick up printed copies.
When a customer service representative detects that payment has
arrived by bank transfer, they mark the corresponding order as
paid. If required they pack and send any printouts orders for
postal delivery and if applicable they send the Dropbox link with
digital copies to the customer.
Pictures from a shooting session are kept in the corresponding
gallery for up to 30 days (a reminder is sent to the customer 5
days before the expiry date). If a customer has not placed an order
past this period, an invoice is sent for the minimum billing amount
(see below). Invoices are payable within 7 days of their issue. A
customer service representative sends a reminder in case they
detect an overdue invoice. Similarly, a customer service
representative sends a reminder if they detect a customer has not
collected printouts more than 7 days after these have been ready
for pickup.
Booking or order cancellations can occur in three ways: (i) prior
to the shooting session (booking cancellation); in case of no-show
(the customer did not show up to the shooting session and did not
re-schedule it); or (iii) after the shooting, if the customer does
not order any pictures within 30 days. Cancellations prior to the
photo shooting session do not incur a fee. Cancellations due to
no-shows do not attract a fee if they are in-studio; they attract a
fee of EUR 50 if they are "on location". In case of a no-show, the
customer may re-schedule the booking to a later day but the no-show
fee for on-location shootings is charged to the customer in any
case. If a customer does not order any picture after a shooting
session, the customer is invoicing a photo shooting fee of EUR 100
for in-studio sessions (EUR 150 for on-location one).
Stakeholder analysis
Customer viewpoint. In 2014, customer satisfaction stands at 80%
(declining from 85% in 2013) and net promoter score at 70%
(declining from 80% in 2013).
Common customer complaints exist in regards to: (i) turnaround
times between the photo shooting session and the availability of
pictures for review, as well as the turnaround times for delivery
of digital copies and printouts; (ii) turnaround times for
resolving customer complaints particularly with regards to
perceived defects in the delivered digital and printed copies;
(iii) mishandled or “forgotten” orders or special requests.
Customers often make changes to their orders or additional special
requests via phone or e-mail and these changes/requests are
sometimes not recorded (or recorded incorrectly) in the order
management system. Changes to orders are currently handled
manually.
Staff viewpoint. Staff satisfaction with the current process is
low. Over 60% of customer service staff consider that their job is
stressful. The staff turnover rate overall is at an all-times high:
20% of staff involved in the process as of 1 January 2014 had
resigned by 31 December 2014, up from 10% the year before, with
more than 80% of the resignations coming from customer service
staff and the remaining from photographers and technicians. The
average Cost-To-Company (CTC) of a photographer at a Fotof studio
is 41K per year (35K for technicians and 37K for customer service
staff). The CTC at Fotof is generally in line with industry
averages. The company additionally employs 20 staff at the company
headquarters at an average CTC of 46K.
Interviews with staff have highlighted the following issues in the
process:
- Customer service staff perceive that appointment management is
too time-consuming. Customers sometimes call or e-mail multiple
times to find a suitable appointment time. Customers also call
frequently to change their appointments for shooting sessions or to
cancel their session. About 1% of corporate orders result in a
cancellation prior to the shooting, while 5% of private orders are
cancelled prior to the shooting.
- The late-show and no-show rates for appointments are high: 10%
late-shows for in-studio sessions, 2% for on-location sessions, 3%
of no-shows for on-studio sessions, and 1% for on-location.
- There are numerous customer enquiries via phone and e-mail (on
average 3 per order, in addition to booking-related calls or
e-mails), be it to enquire about the status of orders or
deliveries, to make changes to the order, to discuss special
requests, pricing questions, as well as to report complains with
received pictures.
Management viewpoint. The company strategy of Fotof for the years
2015-2018 is focused on revenue growth. The company seeks to
achieve a revenue increase of 50% by end of 2018 organically,
meaning via growth of the the existing business, without company
acquisitions and without opening additional retail outlets. To
achieve this goal, Fotof's management is receptive to ideas to
improve customer service and to expand the range of added-value
services, such as offering "slideshows" to customers of personal
events, creating customized artistic galleries, allowing customers
to easily order reprints of photos, etc. Fotof's management
perceives that additional revenue could come in great part from
wedding photos, parties and ceremonies. At present only the
customer who initiates the booking can place orders. But in the
case of personal events and if the customer consents, there is an
opportunity to sell to other event participants. Fotof's management
also perceives that faster cycle times could also help to enhance
sales. Sending more frequent reminders to customers to place their
order, or re-organizing work to reduce cycle time are options that
could be considered.
The booking to cash process has the following value chain:
Boking for a shooting Photo Shooting Session Technical Editing Finalizations and Invoicing Payment Delivery
a. Adding-value and Waste Analysis
Issue |
Adding Value |
Waste |
Boking for a shooting |
Doing a good job of capturing all the information of customers. |
Booking and scheduling through mail/phone are repetitive and adding waste in the process. |
Technical Editing |
Captures customers demand and customization request. |
Repetitive editing is time taking and takes a lot of resources as well. |
Finalization and Invoicing |
The invoicing made the payment details and the amount to be charged. |
It is not fully effective as not taking into consideration the post-payment customer demands. |
b. Issue register, If you find that there are more than three
issues, you can focus on the three issues that have the highest
impact.
Issue |
Remark |
Boking for a shooting |
This is manual and there are chances of mistakes. There are also a lot of chances of a customer request for change/cancellation and thus frequent rescheduling as well as customer dissatisfaction. |
Technical Editing |
Technical editing is a complex task with a number of options and preference form customer side, which is difficult to manage with the existing system. |
Finalization and Invoicing |
There are a lot of complaints on this part with a customer not being satisfied. The manual system is not helping and more robust system needs to be developed. |
1) Calculate the cycle time efficiency of the as-is process. You can assume a working week of 40 hours. In case there is missing information, you can make assumptions about the missing information (e.g. assume a given processing time for a task). In this case, you have to explicitly state your assumptions.
Cycle time efficiency is the ratio of value added time to total cycle time.
For simplicity cycle time efficiency has been calculated for studio photoshoot with online delivery.
Assumption:
Booking time: 15 minutes
Technical editing time: 60 minutes
Payment and invoicing: 45 minutes
Delivery(online): 15 minutes
Value added time (Shooting time): 45 minutes
Total time= 15+45+60+45+15= 180 minutes
Cycle time efficiency: 45/180= 25 %
Process Change |
Issue addresses |
Feasibility |
Online Booking system |
Overcome the challenges with a manual system. Customers can book as per their own choice and also cancel/reschedule it |
We can eliminate one customer service officer (saving of 37000/ year) Investment for online system c0uld be around 40000 and recovered within a year |
Technical Editing |
More standardized formats could be developed to limit the customization, and this could be shared with the customer before/after the photo shoot. This could be classified as different pricing model: 1. Standard Editing (Thereby reducing the number of iteration and also customization.) 2. Custom editing with higher pricing |
The cost could be minimal and we could save on editing |
Complaint Handling |
A more robust system could be developed for handling customer complaint frequently |
Cost could be handled by more satisfied customer leading to more revenue. |
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