November 01, 2008

Operations Management Lesson 8 Exercise

Process map a process (or use one you have already compiled earlier) and assess each process step to decide whether or not each step adds value from a Lean thinking perspective. Pay particular attention to delays and to quality checking points. Assess the throughput efficiency of the process. Is a demand-pull or Kanban system used to control flow?


We are going to take the process of the booking and packing service of school books in a very well known big shopping company in Spain (El Corte Ingles), this process have already been defined in the others chapters (2,3 &4).

This process can be classified as a ‘pull’ style production control because the process does not start until a customer makes his purchase order with previous selection of “Bill of Materials” (his books or items). 

“Lean systems use ‘pull’ style production control, where downstream departments announce their requirements to upstream operations.” (OM Study Notes)

ECI process - Booking books


Each step of the process flows as follows:

  1. In the previous step to specifications phase, the company searches and receives the list of books required by the public school and the most important private schools for children from 3 to 17 years old.

  2. In the specification phase a saleswoman speak with the customer in order to determinate the school and years of his children. In this moment the saleswoman can reach an agreement with the customer and start the process through launching a order to the warehouse. In this step is important to remark as a lean thinking characteristic that depending of the date of booked or purchase order the customers have discount in price or no.  And only it is possible to make a order one month before the delivery of books.

  3. The responsible of filter the orders in the warehouse, approves or refuses the orders and after the orders are dispatched to specifics areas. In the case of booked orders of books is a pick and pack books area.

  4. Every day ERP system is verified by the responsible of this area in order to determinate the number of orders that can be completed the next days and launch the orders to the providers of books if the quantity per each provider is enough. In this point the system tries to increase the efficiency of the workers through of concentration of continuous days dedicated to do the packing.  One of the main measures against the stop the chain of packing is determinate the number of books remaining to complete the pack and establish a threshold from which the pack can be done assuming this situation.

  5. Once the group of pack is ready these are distribute to the stores the next step is make the notice and deliver to the customer and finally close the sale. In this case if the pack is complete the sale can be closed when is paid but if the pack is incomplete the process can be launch again.


From a lean thinking perspective the process we can say that is well defined, mainly for these reasons: the orders are launching when is needed, there are a specific levels of quality thinking in the completeness of the pack and finally the process tries to delete the waste in order to minimising the cost. Nonetheless the company could enhance this process in the following points:


Waste elimination

We have already said that is almost right but the process can be waste when there are problems in the reception of books and is impossible to complete the pack with the level of quality required. Another point is when the pack is incomplete, because cause duplication effort in the sales and production phase.


Employee involvement

Sometimes the delivery process can be better if the notice to mobile or telephone will be done  without forget to anybody. The employee involvement should help this company to enhance the throughput efficiency of the process and the customer satisfaction.


Continuous improvement

The company has some service levels agreements described in its proceses but this aspect can improve something. Some of them are the state of the books, the completeness or accuracy of the pack.

As we have comment the process looks efficient (for me is complicated to access at company data but in general terms is one of the more efficient Spain companies). We have commented too that until there aren't enough stock level the packing process don't start, that mode of management is appropriate for a Kanban system.


References:

Walley, P. (2008)  Operations Management Study Notes, Warwick Business School

Slack, N. et al. (2006) Operations and process management, FT Prentice Hall, London

El Corte Ingles. Web Site (http://www.elcorteingles.es/)



- One comment Not publicly viewable

  1. Desmond Yarham

    Luis, well done, you’ve made it!. I had a quick scan and you have included all of the important elements and provided 3 generic improvements-good.
    rgds
    Des

    05 Nov 2008, 17:14


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