Bpr Presentation 21 Nov

MIS40090

BPR Group 6 Project

Blackrock Hamper Company

Helen Cardiff / David Heaney

Dermot Kelly / Matthew Maloney / Gavin Ross

November 23rd 2009

Introduction

1. Project Overview

(a) Client Profile

(b) Drivers of BPR Project. Why Now?

(c) Project Aims

(d) Specific Targets

2. Project Scope & Stakeholders

3. Methodology

4. Process - Order Taking – As-Is & To-Be

5. Process - Order Fulfilment – As-Is & To-Be

6. Technology Requirements

7. Impact on People

8. BPR Project Risks

9. Implementation Plan

10. Business Case Saving

11. Questions & Answers

1. Project Overview(a) Client Profile

Blackrock Hamper Company

1. Founded in 1997

2. Has built reputation as one of Ireland's leading

Hamper providers

3. Sources a range of traditional Irish produce,

gourmet foods, delicacies and fine wines from

around the world

4. Market is 90% Ireland, 10% Other

5. 35 Employees (30 full time, 5 seasonal)

6. 2008 turnover of €3.6m

1. Project Overview (b) Drivers of BPR project. Why now?

1. Founded as a small “mom and pop” operation

2. Rapid growth has left it with a lot of legacy systems and

manual processes which evolved on an ad hoc basis over

the years.

3. As sales and staff numbers have grown, the inefficiencies

produced by the current processes become ever more

apparent

4. Management finally convinced that a radical redesign of the

firms processes was required in order to support its future

expansion strategy which allows customers to create their

own personalised hampers by choosing from a range of

quality wines, spirits, chocolates and food

1. Project Overview (c) Project Aims

• Harness benefits of technology to deliver better processes and stay competitive.

• Eliminate non value add activities and allow more efficient utilisation of resources

• Deliver cost savings and faster turnaround times

• Faster and more user friendly ordering system will increase sales conversion and repeat business

2. Project Scope & Stakeholders

Senior Management

HR Finance

Facilities

Sales

Order Fulfilment

Purchasing

Admin

Order Taking

Customer Service

Core

Legal

Quality Control Marketing

Partner Inform No Role Key:

Three-stage process: Preparation, Transformation, Consolidation

3. Methodology

1 2 3 4

Checkpoints

1. Strong focus on preparation – get it right from the start2. Detailed checkpoints – everything covered before moving on3. Focus on proper management of change throughout the project4. Emphasis on sustaining the change after the project has ended

3. Methodology

Checkpoint 11. Rationale for change2. Management buy-in3. Selection of processes4. How much/long/fast5. Organisational readiness6. Assign the best people

Checkpoint 21. Assess existing processes2. Customer input and competitive

assessment3. Magnitude of opportunities4. New process vision5. Identify changes needed6. Roadmap for change

Checkpoint 31. New process docs & validation2. Key concerns addressed3. Systems meet new requirements4. Necessary funding available5. Major barriers removed6. Road-map for action

Checkpoint 41. Positive customer reaction2. Customer-orientated focus3. Improved decision making4. Business plan aligned with new

capabilities5. Better responsiveness to market

3. Methodology – BCG 12 Principles

Senior Management

must lead reengineering

Strategy must drive

reengineering

Add value for the customer

Focus on process, not

function

Play to winTake a system

viewPre-plan and

learn as you goNo “one size fits

all”

Metrics MatterCare for the

human dimension

Reengineering is not a one time thing

Communicate, communicate, communicate

4. Order Taking – As Is

Techniques Used

– Observed & recorded staff‟s daily routines & procedures

– Interviewed supervisors, managers, selected staff

– Benchmarking

– Staff focus groups

– Resulted in the development of the „As-Is‟ Process Map

4. Order Taking – As Is

4. Order Taking – As Is

Results Found

− Processes

• No specific order taking process, very messy. OMS only being used

for online payment

• Orders not validated and checked in office

• Non value adding procedures

• Too much time spent on manual tasks

• Current OMS not being used to full potential

• Inefficient process overall

− People

• Lack of communication and coordination

• Not customer focused

• Staff stuck in old established routines

− Technology

• Limited use of technology

• Current OMS not being used to full potential

4. Order Taking – To Be

4. Order Taking – To Be

Results Found

− Processes

• Office staff no longer involved in the process

• Process staff validate, process payment and create orders in new Orderwise

OMS software, which has been integrated with old OMS

• Online validation ensures orders are correct and they are created in OMS

instantly

• Order taking process time reduced by up to 1 hour and 20 minutes

• Automated system has reduced manual tasks

– People• Office staff return to focus on core tasks and also deployed in value adding

activities elsewhere

• New clearer job roles

• Customer focused

• Very coordinated

– Technology• Orderwise Order Management System implemented

• Only manual task is inputting data into OMS to create orders from postal &

phone orders

• New system has eliminated many of the old manual tasks

5. Order Fulfilment – As Is

Techniques Used

– Observed & Recorded Staff‟s Daily Routines & Procedures

– Interview‟s

- Warehouse Manager

- Selected Staff

– Group Workshops

- Initial

- Development of the „As-Is‟ Process Map

- 2nd Round

- Signed Off

5. Order Fulfilment – As Is

Blackrock Hamper Company AS – IS Order Fulfilment Process

Wa

re

ho

use

Ma

na

ge

rF

oo

d S

ectio

nB

eve

ra

ge

Se

ctio

n

Pa

cka

gin

g

Se

ctio

nD

istrib

utio

n

Re

wo

rk

NO

20%

YES

80%

YES

90%

NO

10%

Φ Order Stock

Stock

Available?

END

OMS Checked

every 30 minutes

for new orders

Orders

placed in

section tray

ready for staff

- approx.

every 30

minutes

Section Staff

collect order

- every 10 minutes

Section Staff check

is stock is available

(approx. 2 minutes)

Select Stock

Order Form

returned to

Warehouse

Manager

Order Form

Manually Updated

Orders

placed in

section tray

ready for staff

- approx.

every 30

minutes

Section Staff

collect order

- every 10 minutes

Stock

Available?Select Stock

Update Order

Form as

Complete

Stock Received

Cross Check

Hampers against

Order Forms

Pack HampersAssign Customer

Details to Hamper

Hamper Received Φ

Order Form

Updated as

Completed

Completed

Order Form

Received

Data

Manually

inputted into

OMS

12 Minutes

Order Form

Soft Copy Filed

(3 minutes)

Section Staff check

is stock is available

(approx. 2 minutes)

3 Copies each

of Order Form

Printed from

OMS

Update Order

Form as

Complete

Order Form

Soft Copy Filed

(3 minutes)

Order Form

Soft Copy Filed

(3 minutes)

Orders

placed in

section tray

ready for staff

- approx.

every 30

minutes

5. Order Fulfilment – As Is

Results Found

- Process

• Identified Potential Bottlenecks

• Identified Excessive Handoffs

• Identified Process Delays by using Process Metrics

• Identified Lack of Single Control & Audit Point

• Identified Non-Value and Value Adding Steps

- People

• No Staff Empowerment

• Not Customer Focused

• Each Section Worked in Isolation

- Technology

• Insufficient use of Technology

Blackrock Hamper Company AS – IS Order Fulfilment Process

Wa

re

ho

use

Ma

na

ge

rF

oo

d S

ectio

nB

eve

ra

ge

Se

ctio

n

Pa

cka

gin

g

Se

ctio

nD

istrib

utio

n

Re

wo

rk

NO

20%

YES

80%

YES

90%

NO

10%

Φ Order Stock

Stock

Available?

END

OMS Checked

every 30 minutes

for new orders

Orders

placed in

section tray

ready for staff

- approx.

every 30

minutes

Section Staff

collect order

- every 10 minutes

Section Staff check

is stock is available

(approx. 2 minutes)

Select Stock

Order Form

returned to

Warehouse

Manager

Order Form

Manually Updated

Orders

placed in

section tray

ready for staff

- approx.

every 30

minutes

Section Staff

collect order

- every 10 minutes

Stock

Available?Select Stock

Update Order

Form as

Complete

Stock Received

Cross Check

Hampers against

Order Forms

Pack HampersAssign Customer

Details to Hamper

Hamper Received Φ

Order Form

Updated as

Completed

Completed

Order Form

Received

Data

Manually

inputted into

OMS

12 Minutes

Order Form

Soft Copy Filed

(3 minutes)

Section Staff check

is stock is available

(approx. 2 minutes)

3 Copies each

of Order Form

Printed from

OMS

Update Order

Form as

Complete

Order Form

Soft Copy Filed

(3 minutes)

Order Form

Soft Copy Filed

(3 minutes)

Orders

placed in

section tray

ready for staff

- approx.

every 30

minutes

5. Order Fulfilment – To Be

Blackrock Hamper Company TO - BE Order Fulfilment

Dis

trib

uto

rC

on

ten

t

Se

ctio

n

Wa

reh

ou

se

Ma

na

ge

r

ΦCheck Stock

Availability

(10 seconds)

NO

2%

YES

98%

Order Stock

Re

wo

rk

Select Stock

(3 minutes)

Hamper Received ΦDelivery

Inventory

Data

Electronically

Updated into

OMS

Via PDA (1

min)

Stock

Available?

Access PDA every

2 minutes

Access PDA to

Check New

Orders from

Warehouse

Manage

(10-15 seconds)

Pack Hampers

(2 Minutes)

5. Order Fulfilment – To Be

Results Found

- Process

- Amalgamated 3 Sections into 1.

- Automated System has Eliminated Bottlenecks and Manual Tasks.

- Reduced Process Delays.

- More Efficient Process with a 30 minute saving.

- People

- More Responsibility.

- More Involved in Value Adding Procedures.

- Technology

- Enabled Better Communication & Inventory Replenishment.

Blackrock Hamper Company TO - BE Order Fulfilment

Dis

trib

uto

rC

on

ten

t

Se

ctio

n

Wa

re

ho

use

Ma

na

ge

r

ΦCheck Stock

Availability

(10 seconds)

NO

2%

YES

98%

Order Stock

Re

wo

rk

Select Stock

(3 minutes)

Hamper Received ΦDelivery

Inventory

Data

Electronically

Updated into

OMS

Via PDA (1

min)

Stock

Available?

Access PDA every

2 minutes

Access PDA to

Check New

Orders from

Warehouse

Manage

(10-15 seconds)

Pack Hampers

(2 Minutes)

6. Technology Requirements

1. Create a more efficient customer focused ordering, payment

and product fulfilment process.

2. Improve warehouse performance.

3. Provide an efficient end to end automated and accountable

stock management system.

4. Provide internal company visibility by integrating the new

system with existing technology where possible. Capture of

customer details for future marketing campaigns.

5. Provide a supplier compatible system.

6. Technology Requirements

Item Quantity Required Cost

Orderwise Software Package 1 € 7,500

Orderwise Licence’s 6 € 6,000

Website Upgrade 1 € 4,000

Desktop computers 4 € 3,500

PDA’s 8 € 3,200

Stock bar-coding printer 1 € 1,200

Updated server 1 € 4,000

Total € 29,700 + Vat

6. Technology Requirements

7. Impact on People

1. Ease of use of new ordering system will benefit both staff &

customers resulting in fewer manual tasks to be carried out

improving on current rework and error rate.

2. Staff training will be provided on the new system. Clearer

more defined job roles will emerge promoting staff

empowerment and motivation.

3. Less part time staff will be required during peak periods.

Office staff will no longer have to deal with order processing

and so can concentrate on core activities.

4. 6 staff will be redeployed in other value adding activities

such as sales and marketing.

8. BPR Project Risks

− People

− Staff Scepticism / Fear of Change / Cultural Resistance

− Failure to communicate the need for BPR project

− Failure to recognise End User needs/concerns

− Training not absorbed

− Processes

− BPR project misaligned with company strategies & goals

− Wrong Roll-Out Strategy selected

− Staffing issues

− Benefits not realised

− Technology

− Poor design and functionality / Not user friendly

− Poorly tested before implementation

− Software doesn‟t meet end users needs

9. Implementation Plan

10. Business Case Savings

Total order processing time pre-BPR: 64 mins

Total order processing time post-BPR: 16 mins

2010 2011 2012 2013 2014

Annual FTE

savings6.03 7.83 8.66 9.10 9.37

Fully Loaded

cost savings€243,503 €316,554 €350,006 €367,506 €378,531

Revenue from

10% sales

uplift

€64,800 €84,240 €93,506 €98,182 €101,127

Questions?