Business Process Mapping Analysis for Achiffa Snack Foods - Essay Example

?Table of Contents BACKGROUND SECTION BUSINESS PROCESS MAPPING ANALYSIS FOR ACHIFFA SNACK FOODS PARETO ANALYSIS FOR ACHIFFA SNACK FOODS 4P ANALYSISFOR ACHIFFA SNACK FOODS SECTION 2 CATWOE ANALYSIS SECTION 3 Warehousing and Logistics Management coupled with Real time information approach Line Management and Equipment Maintenance programs Effective Communication Initiatives between Achiffa Management and its Suppliers Customer Relationship Management Initiative Problems that can be faced by the Achiffa Snack Foods CONCLUSION REFERENCES BACKGROUND After 35 years of operation, Achiffa Snack foods looks forward to rejuvenate its systems and operations, by pushing for the use of innovation through a number of measures. The company with more than 15,000 clients across various locations offers six variety of potato based frozen food products to its clients. Its clients include major retail brands, food restaurants, snack outlets, and farms. With decades of business integrated with running expansion, increase in sales and growth patterns, profits and loss has rendered the organization of Achiffa Snack foods a bit complacent. The company management has come across a number of gaps within the various systems and operations associated with the production, logistics, supply and warehousing departments. The management had in the past focused on increasing the product line by adding new products to its portfolio, and did not stress on improvement and service. Presently, there are a number of issues that are being faced the company on various fronts. There is an urgent requirement for changes in the facilities and the marketing fronts, customer handling, product pricing, product line system maintenance, packaging and storing of products. The image of being a quick service and supply chain of Achiffa Snack foods has been diminished of lately, resulting in losses to the profit margins of the organization. With pressure to get back on track with better profit margins, it is time that the Achiffa management thinks about implementing changes and improvements and devise a proper improvement strategy that focuses on enhanced operations and better customer satisfaction. SECTION 1 BUSINESS PROCESS MAPPING ANALYSIS FOR ACHIFFA SNACK FOODS Business process mapping is related to identification of activities that are involved in the business of Achiffa Snack Foods. The process map clearly defines what the business does, the various procedures that are involved. The business process mapping of Achiffa clearly defines the various tasks involved throughout the whole supply chain of the company, from the order placement to the final delivery of the order to the customer. Business process mapping will help the company to identify where the gaps exist within the chain and which task needs more attention from the management and whether or not improvements can be made to the current process, (Kim 2006). Below is the business process mapping for Achiffa Snack Foods. The entire business of the company is divided between six departments which are identified as below – 1. Customer department – This department is in charge of functions likes order generation and collecting payments from customers on time. 2. Sales Department – This is concerned with maintaining the sales of the company at competitive levels. 3. Credit and Invoicing department – This is concerned with the accounts of the entire business. 4. Production Control Department – This is concerned with the production management of the products manufactured by Achiffa Snack foods. 5. Copying Department – This is concerned with the production scheduling and warehousing and logistics scheduling of the final delivery product. 6. Assembly and Shipping – This department is concerned with proper packaging, labeling and shipping of orders on time. PARETO ANALYSIS FOR ACHIFFA SNACK FOODS One of the recommended quality tools for Achiffa Snack food case study is the Pareto Analysis that has helped in identifying and solving the most common problems and concerns within the Achiffa Snack food work environment. Pareto analysis helps to try and improve a process by abolishing shortcomings within a system by identifying the actual time wasters. The concept behind the Pareto “vital few versus the trivial many” or in other words, 80% of the problems are created by approximately 20% of the causes. The four steps undertaken to undertake the Pareto analysis at Achiffa Snack foods are as follows– 1. The first step was to analyze the categories. The various categories were established for the data that was to be analyzed. The various categories are follows - a. Warehousing (Storage, Packaging, and Scheduling) b. Logistics c. Line Replacement d. Equipment Maintenance e. Customer Handling f. Product Pricing 2. The second step was to specify the time period for which the data had to be analyzed. In this step, a snapshot of the data was taken and it was statistically assumed that this was the sample which was to be analyzed. 3. Third, a frequency table, or tally sheet was made which included three things - category, date, and total. 4. Finally, with the help of the collected data. The Pareto diagram was made. The main causes that were a concern for Achiffa Snack foods are listed on the X axis and the percentages are marked on the Y axis. 5. A bar graph was made with the help of average percentages for each category that was identified as a concern. This was superimposed with a line graph which showed the cumulative percentages for each category. The categories are placed in order of their priority. The ones that are major causes of concern are in the lef and the ones that create fewer issues are on the right. A. Warehousing (Storage, Packaging, and Scheduling) B. Logistics C. Line Replacement D. Equipment Maintenance E. Customer Handling F. Product Pricing It can be easily analyzed that warehousing activities at Achiffa Snack Foods is the major concern at the moment followed by Logistics. Line replacement issues are due to the variety of products that are being produced at the company site. Due to different requirements of each product, every time the product line has to be changed by the line management staff which leads to time waste and errors down the line. Further, irregular equipment maintenance by the maintenance staff has led to the deterioration of the machines and parts. Next the Customer handling department is taking too much time to handle a small number of queries generated by the customers. Lastly, there are issues in the product pricing mechanism of the Snack food company, which should be given due importance to maintain product competitiveness in the local market. 4P ANALYSIS FOR ACHIFFA SNACK FOODS Product -- Within the current competitive environment in the packaged foods industry, in order to gain advantage, Achiffa Snack foods should target attracting customers by employing attractive packaging of products. On the other hand, proper packaged products and environment friendly and authenticity marks and quality concern seals will definitely grab the customer attention in the market full of duplicate and lower quality products, (Kotler, 2004). Price – Achiffa has been a strong brand in the market for quite some time now and it possess a sort of monopoly in some local markets. In view of this, the company can afford to or experiment increasing its prices for some products that have strong market presence. However, the price hike needs to be accompanied by some added features that will attract the consumer like - better quality, attractive packaging, free personalized services etc. Place – This feature is related to the various distribution channels through which the customers buy and receive the company products. In order to promote this aspect, Achiffa management can shape up some market growth local groups and some local teams that can act as experts on local clients and vendors for the company distribution channels and units. The target of these experts will be to mend and shape up the marketing method, reinforce the relations with the local traders, and at the same time reveal fresh streams for product distribution. Promotion – Achiffa can easily target promotional programs like literature and leaflets, printed billboards, providing oral material about the product, sessions about business information and other products. These activities will add more value and increase the marketing presence and share of the company. SECTION 2 CATWOE ANALYSIS CATWOE is a modest checklist that is generally used in the soft systems methodology to initiate the thinking process on identifying the problems and solutions within a selected system. It is an acronym for clients, actors, weltanschauung, owners, and environment. The application of the CATWOE analysis rests the focus on the current system or processes that take place within an organization under study and how various activities area associated with each other and affect each other, (Stadtler and Kilger, 2004). Clients: Clients in the CATWOE analysis are the stakeholders who are the receiving end of the system changes or activities. These stakeholders will benefit or will be affected directly as a result of these implementation or modifications. This is the first step of the CATWOE analysis. The clients in this case as identified in the CATWOE analysis are the employees, clients of the company. Actors: Actors in the CATWOE analysis are those people who perform the modifications or the transformation within the existing system. In the case of Achiffa snack foods, the actors are the management staff, and the employees who will be directly involved as actors. Also, the customers (distributors, vendors and the end customers who use the company products) of the company can play the role of in-direct actors by providing feedbacks on the kind of service that is being provided by the company. Based on these feedbacks, the direct actors can implement some changes within the system. Transformation: Transformation is the modification which has to be brought about within the system to target better efficiency. A CATWOE analysis requires listing the inputs and the nature of change such inputs undergo to become outputs. The various fronts where the transformation or changes are required for Achiffa Snack foods are the Warehousing (Storage, Packaging, and Scheduling), Logistics, Line Replacement, Equipment Maintenance, Customer Handling and Product Pricing. Proper scheduling management softwares for warehousing and logistics can be introduced to improve efficiencies and remove errors that exist currently. Employee training for better time management and equipment maintenance for managing the product lines in an efficient manner is another transformation that is required. Lastly, customer handling department needs to be trained properly to handle the queries in less time and replying to queries in an efferent manner. Weltanschauung: Weltanschauung, or the “world view” provides the justification for the transformations that will be carried on by the actors identified by the CATWOE analysis. In this step, the various transformation methods and activities are put under analysis with a wider context to study the results of the transformations. These transformations are analyzed from the point of view of different shareholders. Improved efficiency of the warehousing department, and better deliveries (on time and quality), better scheduling of deliveries as a result of improved schedules, reduction in operational costs due to better line management by developing relevant systems conceptual models. Owner: In this part of the CATWOE analysis, the owner who will implement all the transformations within the system is identified. In this case, the owner is the Achiffa managers. Environmental constraints: This section of the CATWOE analysis analyzes the external constraints that can affect, hamper or restrict the transformations that are intended to take place within the system. These limitations or constraints can be financial, project scope limitation, regulations, resource limitations, etc. In this case, the environmental constraints can be financial limitations of the company, plant design that can hamper new changes or modifications or additions within the plant, warehousing space, co-worker issues and existing market environment. SECTION 3 Warehousing and Logistics Management coupled with Real time information approach Applying some relevant quality management techniques for avoiding the issues can bring greater flexibility and efficiency to the entire system. This will ultimately help to reduce gaps within the supply chain. Demand prediction techniques - Accurate Prediction of demand – It is required that the management is able to determine the long term visibility of customer demand during each period and be able to predict this with highest accuracy that is possible. Real time orders from clients / vendors / distributors within each period need to be known to the management so that relevant information required by the resource procurement, line management, warehousing departments is met on time, (Keller,1998). Order Batching – Proper batching of orders on time for the suppliers, line management staff, warehousing department, is absolutely necessary. The warehousing department needs to understand that in case of large variation of orders, or when there is bulk orders, it is usual that there exists a variance. To avoid problems due to the variance, order batching is followed. This reduces costs, errors, and offers ease of transportation. It is advisable that the orders should be sent to the warehousing for storage in small batches. Small batches lead to reduced cycle times which in turn reduce the inventory. ERP systems – Enterprise resource planning in coordination with Manufacturing Execution System (MES) will assist the management to easily meet demands of the client. Effective resource planning can also help to track the performance of the line management and warehousing, the two problem areas at Achiffa Snack foods, (Jacobson and Aker, 2000) Prediction of routine demand: The managers can make use of arithmetic forecasting models in order to decrease the forecast error that they have been witnessing their production routines. This will subsequently further reduce the late orders, returns from stores, and maintaining the buffer stock close to the levels of the desired customer level. Obtaining real time information in the downstream is also an effective approach. This hard data that is collected directly from the customers, help to reduce the variability in the stocks and demand patterns. Setting up efficient distribution network – the company has at times noticed some problems in distribution of products from its warehouse department. This has caused a number of issues like supplier problems, and space issues at the storage house. This in turn led to inability in demand prediction, forecasting, and inventory. Here the use of OLAP cubes will assist in analyzing the errors and losses within the chain, (Lambert and Stock, 2003) Line Management and Equipment Maintenance programs The current systems at Achiffa Snack foods production line department are intended for mechanized processing of resources, logistics, production and inventory. With time, the systems have depreciated and with increased demands, and variability. The main problems in line maintenance and equipment are; Old systems offering complex and difficult processing Line replacement issues for different products which leads to faster depreciation and errors Accurate precision, and data handling that is now necessary for high quality production, is now required by the production line. For this purpose, a centralized operational management system has been suggested to the management. Instead of a Push Type operational managmenet system, a “Pull Type” chain has been suggested. The major theory behind a Pull type management system is that the production is based only on the demand as per the client demands. A pull type production system will offer flexible production planning reducing blind procurement thus reducing inventories, work in progress, and unwanted finished goods stock which will help in reducing the total cost of production which also includes raw material. Expenditure on inventories, and finished goods stock ultimately reflects the competitiveness of the product. Effective Communication Initiatives between Achiffa Management and its Suppliers This section will put forward some initiatives which can be taken up by the company to improve the lagging communication levels at different levels to help improve the existing supply chain and better results are obtained. Centralized directory set up – This system can greatly assist the employees from various departments like production, resourcing, procurement and warehousing. This set up will help the employees to enter their daily routine schedule and other administrative tasks via intranet. Entry of this information through mobile phones onto the intranet centralized directory set up will make the task easier and will save staff hours. For example, if there is some urgent requirement of space, (Fiala, 2005) Peri Portal - This is a centrally based web-accessible knowledge based information system which can be used by employees to share, collect information on various issues that might be of concern for the daily operations of the system, (Samaddar, Nargundkar, & Darley, 2006).. Customer Relationship Management Initiative The Achiffa Snack food management has lately realized it has become more difficult to attract news clients than to sustain older ones. With this backdrop, the management applied some techniques for better customer relationship management. Better data management systems - For faster observation and analysis of customer data (queries, complaints), the management has decided to upgrade its data storage and retrieval systems. Moreover, regular upgradation of these systems is also important. Training imparted to customer relationship management staff at Achiffa will futher assist the employees in better management of their time with customer (both online and face to face). The management understands that until it owns an excellent team of motivated workers, it would not be able to achieve the set targets. Interpersonal and customer interaction skills are required to be taught to the customer handling staff. Problems that can be faced by the Achiffa Snack Foods Financial problems that can arise for the company – It might occur that the company may not be able to support the changes that are required by the system. In order to support, the company management can experiment increasing prices for some strong brands in the market. The company can also think about discontinuing some products that have not been performing well lately or are not profitable for the company. Employees Conflict – There exist some conflicts between managers at Achiffa and these conflicts need to be carefully resolved by the upper management through interface discussions between the concerned employees. Conclusion The case study on Achiffa Snack foods presents the fact that the utilization of systems and management techniques for the entire business operation through model techniques can certainly improve the business conditions and offer higher competitive advantage for the company and its customers. REFERENCES 1. Jacobson, R. & Aaker, D.A. (2000). The strategic role of product quality. Journal of Marlketing, 8,31- 44. 2. Keller, K.L. (1998). Strategic brand management: Building, measuring, and managing brand equity. London: Prentice-Hall International. 3. Kotler, P. (2004). Marketing management: Analysis planning and control (7th ed.). Englewood, Cliffs: Prentice-Hall. 4. Kim, D. (2006). Process chain: A new paradigm of collaborative commerce and synchronized supply chain. Business Horizons, 49(5), 359-367. 5. Samaddar, S., Nargundkar, S., & Darley, M. (2006). Inter-organizational information sharing: The role of supply network configuration and partner goal congruence. European Journal of Operational Research, 174(2), 744-765 6. Fiala, P. (2005). Information sharing in supply chains. Omega - The International Journal of Management Science, 33, 419-423. 7. H. Stadtler and C. Kilger: Supply Chain Management and Advanced Planning: Concepts, Models, Software and Case Studies, Indiana University Press, 2004, p. 25. 8. D.M. Lambert and J.R. Stock: Strategic Logistics Management J.J Coyle, E.J. Bardi and C.J. Langley: The Management of Business Logistics. Indiana University Press, 2002, p. 342 Read More