November 05, 2007

Operations Management Lesson 8 Exercise

Operations Management Lesson 8 Exercise

The objective of the 8th Blog is to evaluate a single step in a process in a “lean thinking” point of view, with attention on the delays wasting time and quality check points.

I have chosen the same example of 3rd blog, contract management process and, internally this process, I will talk about the “Software product contractual attachments” step, pointing out how this process does not match with “lean synchronization”.

“Lean synchronization” is the aim of achieving a flow of products and services that always delivers exactly what customers want, in exact quantities, exactly when needed, exactly when required and at the lowest possible cost (Slack et al, page 342).

In the case of the process here described, customers are represented by IBM people; this is an internal process and we talk about “internal customer”.

The main purpose of the process is to assure control, quality and speed about the delivery of contract attachments to IBM sales that is responsible of contract signing with external customer.

This process is pushed by the internal customer requirements and steps are:

-        configuration of software products (done by sales people)

-        preparation of MON - Master Order number (by a technical structure which validates the sales configuration, every time configurations are very demanding)

-        credit check request

-        MON data entry in Sap system (that will allow system in shipping products and charging License and Maintenance cost)s

-        print attachments.

Wasting time

This process allows wasting time because:

-        it is not able to manage peaks, people is not enough to manage all the requests and this is a first bottleneck

-        credit check tools are not updated, so often happens that the process slows down because of investigation, that requires more time

-        sap system is not flexible and do not allow to operate by hand when needed; then the system do not support “pdf” format printing, that could be done by scanner.

Flow control

The biggest problem is represented by the inadequacy of systems and lack of priority for employees.

A Kanban system could be implemented, in order to give the right priorities to each task. A new database could be create; sales people can insert their requests giving them a priority (the “kanban” colored card) and, basing on the “colour of the code” the requesting knows how much time needs to wait.

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