Case Study Deliverable 1
The first project deliverable includes the two critical items:
Using the list of processes that was compiled by your junior coworker, organize the processes at Marketing Advantage into a meaningful hierarchy. Since the list contains varying levels of granularity, you are allowed to create additional process grouping units, rename existing, or delete existing. Process hierarchy should be grouped according to a clear numbering reference.
Project Prioritization Matrix (aka QFD)
Based on interviews with owners, management, and staff, we have identified 4 processes at Marketing Advantage that are particularly important and are also struggling right now. The following table summarizes notes and observations about these 4 processes. Your job is to create a prioritization matrix (QFD) to help the team know where to focus attention on process improvement. Please label assumptions and provide additional comments on the evaluation scores. Write 2-3 paragraphs about your recommendations and justifications for your recommendations.
The following processes should be prioritized using the template for Process Prioritization Matrix (published online at Canvas). The criteria for prioritization are:
· Internal Impact (employees)
· External Impact (Customers)
· Improvement Feasibility
· Current State Performance
· Financial Value from Improvement
Rick (the owner) expressed the relative importance of these criteria as follows:
· Internal Impact (20%)
· External Impact (40%)
· Improvement Feasibility (10%)
· Current State Performance (10%)
· Financial Value from Improvement (20%)
Proposed Scope of Improvement Project
Based on discussions with members of Marketing Advantage’s management team, the processes related to Wholesale Large Format Accounts will be area of first focus. These customer accounts struggle with the following challenges:
1. Inventory Management
2. Rush Orders Management
3. Workflow Management
4. Quality Assurance
Process Name & Description
The fulfillment of orders for Large Format Printing generally requires two main inventory items:
1. Media. This is the fabric material upon which the client’s logo and design are printed
2. Hardware. These are the structural parts required for the tent or marketing stand.
In conversations with several employees, the process of Inventory Management was raised repeatedly as being a main problem. Since issues with inventory touch so many different people in the company, it causes widespread frustration when inventory is not available. One employee even estimated that 50% of orders experience some issue with inventory not being available at the right time.
Even though this process is critically important to the smooth flow of the business, it is unclear how Inventory is managed in the current environment. The process is performed in an ad-hoc and inconsistent way. Sometimes, the sales team will place an order for the media and hardware and other times the production team will place orders with their inventory suppliers.
Large Format orders for wholesalers are generally extremely time sensitive and most often a rush. When inventory is not available to fulfill promised orders, the sales team often must rely upon expensive rush orders with their suppliers. The media and hardware suppliers often need to overnight material to Marketing Advantage. The cost of overnight shipment quickly deteriorates the already-thin profit margin on Wholesale orders.
Inventory issues also cause unnecessary rescheduling by the Production Management team. When items are not available, they will need to reschedule all jobs to work on those items where inventory exists.
Generally speaking, the end client is not aware of the inventory issues that Marketing Advantage faces. The team generally scrambles enough that the client is shielded from the pain of mismanagement. However, the end client is impacted in a negative way when the extra rushing caused by inventory leads to poor quality on the finished product.
Rush Order Management:
The expedited processing of an order is intended to be used on a rare exception basis. Rush orders bypass the typical work queue and are placed at front of the priority list. Rush orders also involve shipment with overnight services.
Wholesalers who place orders with Marketing Advantage on behalf of their end clients often misunderstand the Large Format printing process. Wholesalers underestimate the work involved with creating Large Format items (such as tents and display stands). Very often, the end customer (the client of the wholesaler) does not have the right graphics and logos for use with large format items. Usually, their logo works great on small items (like pens and other trinkets), but does not work well on large items.
This lack of understanding by the Wholesaler about Large Format can occasionally create the need for Rush Orders. These rush orders play an important role in servicing the needs of wholesalers and the ability to deal with rush orders effectively is a key part of Marketing Advantage’s strategy to become a flexible and responsive partner for Wholesalers.
Rush Orders were originally intended to be an exception to the normal process, but lately the number of rush orders has made them more the norm than the exception. If not managed effectively, these Rush Orders have an extremely disruptive impact on the entire work flow for Large Format printing. As one order gets prioritized as a rush order, that necessarily means that the other orders in the queue get disrupted.
The Wholesaler and the end customer are often unaware of the internal challenges required to effectively deal with rush orders. Marketing Advantage generally does a good job of hiding and covering the amount of disruption caused by rush orders.
Rush orders have both direct and indirect cost impact. Direct costs involve overnight shipment and occasional overtime hours to ensure the order gets completed. Indirect costs involve a delay to other orders which then turns a normal order into a rush order as the company deals with the shuffling of internal prioritization. Other indirect costs involve an inefficient use of machines and people as they are reallocated and reconfigured to work on a rush order.
The process involved with managing the flow of individual orders from inception to completion. Also involves the interaction of multiple orders as they compete with other orders for priority, time, and resources.
Marketing Advantage has seen such strong growth in recent years that the processes involved with workflow management have not been well defined. In the current environment, customer orders flow in a halting, inconsistent, nonstandardized, and ad-hoc way.
As a sales representative takes an order from a wholesaler for an end customer there is no standardized way that the order will be completed as it flows through the various stages of design, printing, finishing, shipping, and invoicing. The sales representative generally works with each group individually to make sure his/her order gets completed. There is no centralized queue management process that guides the priority and flow of orders through all stages of the fulfillment process.
The lack of a standardized workflow process creates direct challenges for internal employees. First, employees constantly feel the pressure of pleasing individual sales representatives who come and advocate for the priority of their individual orders. Employees are often torn between pleasing one representative and disappointing another. Second, employees are interrupted by sales representatives who come asking about the status and progress of their individual orders. Since sales representatives have no system that captures the progress of an order through the lifecycle, they must bother and interrupt each fulfillment group to get a status.
Customers don’t directly feel the negative impact of a poor workflow process. However, the lack of standardized and robust workflow management contributes to quality issues and timing pressures when the company isn’t able to effectively balance the internal inefficiencies of an inconsistent process.
In the current process, each order is inspected for quality issues by the finishing team. After sewing the material onto the hardware, the finishing team inspects for printing problems and other formatting problems. If they identify problems, they notify sales representatives who work to correct or recreate the order.
In a recent interview, Rick the owner of Marketing Advantage expressed concern that too many orders experience problems that are ultimately detected by the end customer. The finishing team has been given a quality assurance role, but they do not detect and prevent all defects from reaching the end customer.
The sales, design, and printing groups have come to rely too much on the finishing team for quality assurance. These teams are not intentionally negligent or careless with quality, but they trust that mistakes will be caught by the finishers. This overreliance on a manual quality check at the end of the process causes about 15% of orders to experience rework and defect correction.
The end customer ultimately discovers quality issues when the order arrives. Unfortunately, given the sensitive and urgent nature of marketing campaigns, it is often too late to correct problems with orders before the marketing event.
Internal employees experience the frustration of rework when quality issues arise. It becomes demoralizing and discouraging when a job or order must be done twice (or more). This is especially true considering the amount of urgent work that already exists in the queue.
This first project/case study deliverable will scored on a scale of 50 possible points (25 for hierarchy and 25 for prioritization matrix).
The process hierarchy will be graded on the following points:
· Logical structure and organization of processes. There is no absolute best way to organize these processes, but your approach should be rational and logical and show that you understand the relationship among these processes and their placement in a hierarchy.
· Formatting. Is the hierarchy clear and understandable? Does the hierarchy follow a consistent numbering structure?
· Hierarchy Consistency. Is there consistency in the granularity among the processes at each hierarchy unit? For example, are the units at Level 2 consistent in the level of granularity?
The Process Prioritization Matrix will be graded on the following points:
· Scoring is Reasonable. Scoring is not an exact science, but you should demonstrate that the scores reflect the areas of emphasis from the interview notes. Scoring involves both the correct weighting on the relative priority of criteria and the scoring of each individual process against the criteria.
· Labeled Assumptions. Ensure that you offer some context about the assumptions you made on the scoring. Use the “Comments” column for these notes and assumptions.
· Recommendation. Write 2-3 paragraphs that describe the recommendations for action (with justification for the recommendation)