OPMT $2298-$ Business Process Improvement

Case study: Flour Power Organics

Background

Our fictional case study company, Flour Power Organics, sells organic, artisan flour and baking supplies online. Delivering quality baking foods & supplies at a good value is the mission of the small warehouse owned by Nina & Pisha. They started the online venture in Jan $2019.$ Despite increase in sales over the last $12$ months, the expenses incurred over the year have resulted in negative EBIT $($earnings before income taxes$)$ for the first year. Critical to the quality and variety of the products they supply it is essential they manage their operations at the lowest cost possible. Fortunately, as part of their business plan they developed few key performance measures and have been collecting data from day one of their business.

The Problem

To ensure the right product is delivered at the right time to the right customer is the primary focus of a distribution business. May sound simple but there are several underlying processes that occur to meet the above$-$mentioned objective. During the annual budget assessment Nina & Pisha identified a few areas where the cost exceeded than expected. They believe in data driven decisions, however since they are occupied performing several roles to keep the business running, they have not been able to dive into the data to analyze trends that will help them improve their business.

Opportunity

Your team has been selected to perform a $$Business Process Improvement$$ exercise using the data spreadsheet $($provided separately$).$

$**$Financial assessment noted in attachment

OPMT $2298-$ Business Process Improvement

Case Study: Flour Power Organics

Notes:

$$ Layout

$$ Flour power warehouse has standard racking with six shelves on each rack to store product

$$ There are $4$ racks in total, one racking each placed against the wall and $2$ in the middle with their backs against each other.

$$ Receiving & Put away

$$ Flour power receives delivery from the manufacturers $5$ times a week $($deliveries are dropped off all day long$)$

$$ Product is placed on shelves as it is received i$.$e$.$ same packaging

$$ Some products are received in bulk quantities $($packages of $6$ or $12),$ however at the time of delivery the bulk packages are cut open to ship single units

$$ Nina & Pisha do not have formal training and procedures in place on receiving and put away of products. The tasks listed in process steps are often performed in parallel

$$ Other

$87\%$ of the products have a shelf life of $3$ months

$$ In order to maximize on the volume discounts, certain products from manufacturers are purchased in large quantities which are stored in the small storage room.

$$ They are often repackaging products prior to shipment $($i$.$e$.$ not able to resell as is$)$

$$ Inventory & orders are tracked manually on a spreadsheet

$$ Provide deliveries to customers on a daily basis. All orders must be shipped by $3$ pm$.$

OPMT $2298-$ Business Process Improvement

Case Study: Flour Power Organics

Flour Power $$ Receiving to delivery tasks

Most tasks noted are performed on a daily basis. Nina took some time out of her busy schedule one day to identify the high level tasks and time taken on a given $8$ hour working day for both of them $($they take a half an hour break each$).$

Responsible

Process Step

Time $($minutes$)$

Minimum

Maximum

Average

Nina

Receive deliveries

$30$

$100$

$45$

Nina

Sort deliveries upon receipt

$28$

$160$

$102$

Nina

Put away supplies in respective locations

$68$

$240$

$202$

Pisha

Review and organize customer orders $($printed copies$)$

$25$

$120$

$78$

Pisha & Nina

Fill customer orders

$60$

$132$

$90$

Pisha & Nina

Pack customer orders

$120$

$265$

$242$

Pisha

Finish up on paperwork, billing, etc.

$60$

$120$

$86$

Pisha & Nina

Clean up$,$ prep for next day

$36$

$108$

$55$

Total

$900$ For the Business Case complete the following:

Analyze data provided

Prepare business case and provide recommendations for improvement

Demonstrate use of $1$ tool learnt in each of $6$ steps within PDCA cycle $($step $7$ is not relevant for this business case$)$

Submit PowerPoint presentation $($maximum $10$ slides excluding cover page$)$

Include written notes and audio as part of your submission.

Important $$ apply tools$/$methodologies learnt throughout the course! Financial assessmemt