Question

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.

Answer 1

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.

To Be BMPN: