PE

EL

GEORGE

GAUTENG

BBA

ABP

INDIVIDUAL ASSIGNMENT DECLARATION

I, AYANKOYA, K A_____ DECLARE THAT THIS ASSIGNMENT IS AN ORIGINAL WORK AND ANY OTHER SIMILAR WORK HAS BEEN APPROPRIATELY REFERENCED IN THIS ASSIGNMENT.

MODULE:

Operations Management.....

ASSIGNMENT:

1...

LECTURER:

Prof. Koot Pieterse ......

DATE SUBMITTED 11th July, 2012.......

INITIALS AND SURNAME: K A AYANKOYA

STUDENT: 212400096

SIGNATURE:

.
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Contents
1.0 INTRODUCTION ................................................................................................................................. 3 1.1 Corporate Strategy - Our Business ................................................................................................ 4 1.2 Vision............................................................................................................................................. 4 1.3 Mission .......................................................................................................................................... 4 1.4 Business Strategy. ......................................................................................................................... 5 2.0 SERVICE DESIGN ................................................................................................................................ 6 2.1 Service Specifications .................................................................................................................... 6 2.2 Service Guarantees and Recovery ................................................................................................ 8 3.0 PROCESS FLOWS ............................................................................................................................... 9 3.1 New Customer Registration .......................................................................................................... 9 3.2 Support Call Logging, scheduling and monitoring process ......................................................... 10 3.3 Processes Efficiency Metrics and Measurement ........................................................................ 11 4.0 OFFICE LOCATION AND DESIGN ...................................................................................................... 12 4.1 Location ........................................................................................................................................... 12 4.2 Office Design ............................................................................................................................... 12 5.0 STAFFING......................................................................................................................................... 13 5.1 Skills Management Process......................................................................................................... 13 5.2 Employee Performance and Appraisal........................................................................................ 14 6.0 CAPACITY PLANNING ...................................................................................................................... 15 6.1 Forecasting .................................................................................................................................. 15 6.2 Capacity Utilization and Bottleneck ............................................................................................ 15 6.3 Buffering Strategy ....................................................................................................................... 16 7.0 SUPPLY CHAIN DESIGN .................................................................................................................... 17 8.0 QUALITY MANAGEMENT................................................................................................................. 19 References ............................................................................................................................................ 20

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DESIGN OF ERP SUPPORT AND MAINTENANCE CONSULTING OPERATIONS

1.0 INTRODUCTION
The Enterprise Resource Planning (ERP) system provides a variety of information that can be used to coordinate decision making processes within an organisation (Schroeder, Goldstein and Rungtusanatham, 2011). Thereby helping managers to streamline and properly structure their businesses for effective performance to gain competitive advantage by having the right information available to the right people at the right time. Hence they invest in the implementation of ERP Systems that can help them to run their organizations more effectively. However, because of the complexities of the ERP system companies that have implemented ERP systems require experts to provide technical and business process related support for their staff to be able to get the best out of their ERP system and to avoid very costly downtimes. This study will be looking at the design of the operations of a ERP support and maintenance consulting company based in Port Elizabeth.

It has been argued that the design of the operation and the business processes that drives businesses has become more of a strategic issue that is controlled at the executive and management level because of the demands of todays business (Binney, 2012). The pressure to reduce cost together with an increased demand to localize product/service offering is making many companies to design their operation in such a way that they can derive optimum benefits. The design of the operation for EPI Consulting CC will focus on how to achieve operational strategy that will position the business for a competitive advantage.

Since the global economic melt-down in 2008, the Information Technology Consulting business has been experiencing a slowdown. In a recent survey, the technology and business survey giant - Gartner, discovered that the budget for Information Technology is increasingly on the decline, especially for companies that see Information Technology as a tool for operational automation, integration and control. However, it was noted that effective leaders use technology, which includes Information Technology, to strengthen the customer experience and eliminate costly

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internal distortions. They are using technology to 'amplify' the enterprise (Gartner Executive Programme). With Schroeder, Goldstein and Rungtusanatham, 2011. defining operations strategy as a consistent pattern of decisions for the transformation system and associated supply chain that are linked to the business strategy and other functional strategies, leading to a competitive advantage for the firm. While Davis, Heineke and Balakrishnan rightly sees it as the development of a long-term plan and the configuration of the organizations resources in achieving the plans and objectives of the firm. This study will seek to design the operations of EPI Consulting CC An ERP Support and maintenance Consulting firm to achieve around the ability to be able help its clients to strengthen the customer experience and eliminate costly internal distortions.

1.1 Corporate Strategy - Our Business

Strategy is the direction and the overall scope of a firms activities to achieve advantage in the market place through a deployment of its resources (Barnes, 2008). And Davis, Heineke, Balakrishnan (2007) described the corporate strategy of a firm as the overall strategy adopted by the company at the top. This will therefore mean that the overall plans of action taken by a firm can be described as the Corporate Strategy that helps companies to focus on their core business. In the case of the company under study, the corporate strategy would be to help the its customers get the best out of their ERP investments.

1.2 Vision
The Vision of EPI Consulting is to be a one shop stop partner for ERP system support and maintenance with the manufacturing, warehousing & distribution (FMCG) industries by generating superior value for our customers.

1.3 Mission
Our Mission is to capture the ERP manufacturing, warehousing & distribution industries, through: Provision of top-notch technical and business processes support;

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Optimisation of ERP systems for our customers to maximize their ROI from their investment on ERP; The provision of a flexible service with the shortest possible turn-around time.

We will accomplish this by giving attention to understand the business processes of our client much more than they do.

1.4 Business Strategy.

The way a business plans to secure, deploy and utilize its resources will determine the extent to which it can pursue and achieve its objectives (Barnes, 2008). The business strategy that will be pursued by EPI Consulting will be that of a product innovator. The company would provide value for its clients by focusing on flexibility, quality of service and delivery turnaround time. The effort of the company should be to deliver flexible, top-notch services within the shortest possible time and not just on its technical abilities. It should focus on how it will do what it does. Hence, how services is delivered to the clients will be the core value proposition and all functional areas of the business should be designed to align with this objective.

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2.0 SERVICE DESIGN

The prospective clients of EPI Consulting will come from different industries with different needs. In most cases the technical support might be almost the same, but the business process support requirement might vary greatly from one client to the other and the offering to clients will mostly be intangible service.

2.1 Service Specifications

Although the services that the company will provide to its clients in most cases might not result in physical items that can be seen, felt or touched, it services can still be divided into explicit and implicit service offerings. This will allow it to focus and develop each area of our service specifications. Its explicit service offerings will include; Resolving of technical problems on client site Providing training for employees of its clients on how to use the ERP systems Helping its customers to reduce the down-times caused by software failure in their factory and business. Optimization of client business processes with ERP system

While the implicit service offering will include; Timely resolution of problems Providing a one-stop solution always The client should be able to depend on the firm to solve their problems Provision of adequate information All services to be provided in a friendly and professional manner

This study will design a service system that will assist the firm to be able to deliver to the customers expectation. As described by Schroeder, Goldstein and

Rungtusanatham (2011), that system includes that processes that the company will use to deliver services through the use of the resources available to it. To be able to serve client properly and define the type and level of service that the customers can expect, the company should have the following standard options that the clients can choose from;
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1. Gold Category: Customers in this category will receive premium unlimited support for all support calls. This category will require an annual contract and service level agreement.

2. Silver Category: Customer will receive 50 hours monthly of premium support for all calls received. Extra hours will require the approval of the IT manager or designated official in the clients company. This category will require an annual contract and service level agreement.

3. Bronze Category: Customer will receive 20 hours monthly of premium support for all calls received. Extra hours will require the approval of the IT manager or designated official in the clients company. This category will require an annual contract and service level agreement.

4. Adhoc Category: Customer will be assisted on the adhoc basis and clients with a contract and SLA will always take preference to clients in this category.

From service design perspective, the proposed service options falls in the co-routed service design on the service matrix as adapted by Schroeder, Goldstein and Rungtusanatham (2011). This service design will allow for only four standard choices that the customers can choose from, with each of the choices following a standardize work procedures. The company should therefore focus its effort more on having the right systems and human resources that will deliver the best service to the clients. The following systems are suggested in order to achieve the best services.

1. Automated Support Call Logging, Monitoring and Scheduling System 2. Service Level Feedback System 3. Knowledge Sharing/Transfer System among the employees 4. Skill development for employee

Each of the systems will be discussed in details in this document. Overall, the services, processes and employees of the company need to understand that the
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direct impact of the companys services on the clients business. Also, every contact with the clients via telephone, face to face or even with the systems and processes of the company must portray the companys values and deliver the value propositions beyond technical support to the customers. Based on the companys vision and objectives, its services should be geared towards the human experience and making the services look tangible and visible to the clients.

2.2 Service Guarantees and Recovery

In order to manage the level of service, ensure the satisfaction of client and be continually positioned differently, service guarantee and recovery plan should be put in place that will be linked to the different service options and the overall service offering to the client. The level of service to be offered to clients would be measured properly the metrics will be discussed later in this study. Guarantees will be put in place to ensure that the services are delivered as expected. The clients are offered a one stop service; this means that the company would try as much as possible not to refer the client to another company for any of their needs that have to do with their ERP system. The company should also guarantee that the consultants would know their process enough to optimize and improve as and when needed. And that the problems will be resolved with the shortest possible time.

In cases where customers feel that this guarantees are not met, the feedback system should be used to measure the success or failure of service and hour spent will be credited back to the customers in such cases with a written apology.

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3.0 PROCESS FLOWS

To achieve the service objectives that have been mentioned above, the company should control its operations with policies and procedures that properly coordinate into a system of interrelated processes. The Enterprise Process Support website defines a process as a collection of interrelated work tasks initiated in response to an event that achieves a specific result for the initiator of the process. While Schroeder, Goldstein and Rungtusanatham (2011) describes a system as a collection of interrelated elements. Although each client with have an Account Steward that will be responsible for ensuring that the client is always well looked after, it should be the responsibility of every employee to ensure that problems at client site is solved as soon as possible. Because of the nature of the business of the company, it is important that every employee is also involved in customer satisfaction and finance. The following are the identified processes within the companys business that should be focused on and aligned completely with the companys business strategy and objectives for competitiveness.

3.1 New Customer Registration

This process should always involve a cross functional activity of technical, marketing and the management teams. The management team should be involved in decision making on which clients to prospect or not to prospect based on the companys corporate and business strategy. While the marketing team working with the technical team or better still, the marketing employees should have a good technical and business background of ERP system and a good knowledge of the manufacturing. The chart below shows the process to be followed in prospecting, winning and registering a new customer

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Start

Management Review Prospect

Prospect aligns with strategy

Yes

Client is Prospected

Client Agrees to do business

Initial Site Analysis conducted

Client accepts recommendatio n signs contract

Client is registered on system

Prospect Ends

No

No

No

Account Manager appointed

Initial recommendation is executed

Customer registration completed

3.2 Support Call Logging, scheduling and monitoring process

The support call logging scheduling and monitoring process is the main business of the company. When clients encounter problems in their site, the contract should stipulate that all calls must be logged using the companys website will as much details as possible. This will completely remove the customer having to wait on telephone. The calls that are logged from the website should automatically by logged into the companys support call logging system. This system should automatically allocate the call to the Account Stewart if he does not have a call allocated to his name. If he does have, the call should be allocated to the support department manager that would then choose either to allocate the call to the Account Stewart or anyone else in the team.

When a call is allocated, the consultant should call the owner of the problem at the client site either to get more details on the problem or to let the company know that the call has been received and is being attended to. In the Support Contract, the client must agree to provide the support team with a remote access into the network. This will reduce the need for the team to travel to client site by 90%. Only very critical issues should require the physical presence of a consultant.

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The support team should also have a monitoring system that displays the all the open calls logged by each customer, call that has not been allocated and the cycle time (Actual vs Expected) of calls that the team is working on. This will ensure that the team is focus on prompt service delivery and will also help in measuring the efficiency of the consultants. The diagrams below show the flow of the Support call process.

Client Logs call via internet

System Allocates call

Account Manage Available

Account Manager receives notification

Call Appears on Monitoring screen as active

Consultant Calls the Call logger

Consultant Starts work on the project

Supervisor Receives Notification of new call

Completes work and notifies customer

Supervisor allocates call to alternative staff

Consultant Receives call Notification

Customer is satisfied

Consultant is notified

End

Call is close and removed from monitoring screen

Client rates Service

Client Account is updated

Consultant updates the system with solution and no of hour spent

3.3 Processes Efficiency Metrics and Measurement

The use of the technology in the support call logging and scheduling provides an opportunity for measurement of efficiency and continuous improvement of the system. A weekly and monthly report showing the throughput time, capacity of the team and the feedback report should be generated and analysed by the management for continuous improvement of the overall system to align it with the business strategy of the company.

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4.0 OFFICE LOCATION AND DESIGN

The location of the business and the design of the office space should align with the companys strategy. The Lean enterprise tenet identifies unnecessary transportation and motion as one of the key source of waste in enterprises. Hence the company would emphasize the use of technology to in get the job done and provide the clients with the value without the consultants having to leave the office. The location and the design of the office would also support this concept.

4.1 Location
The office should be located in Port Elizabeth. This will give the business access to manufacturing companies in and around Port Elizabeth. Because of the nature of their businesses, most of the clients will prefer to have their ERP support consulting company as close as possible for them to be able to reduce the turnaround time and to reduce their down time to the barest minimum. The location of the business in Port Elizabeth will give the client more sense of dependability and accessibility which is one of the values offering that the company is pursuing. Although, the plan should be to solve most of the clients problems using remote access into their computer networks using the internet, the location of the business in Port Elizabeth will reduce the cost of travel when it becomes necessary to visit the client sites.

Beside the ease of accessibility to the clients, the location of the company in Port Elizabeth can provide the company with an opportunity to access employees that will be will to live in port Elizabeth for reasons besides financial gains. Port Elizabeth provides a type of life that attracts many that want to get away from the rush-rush in other cities like Johannesburg and Cape Town.

4.2 Office Design

The office should be designed to facilitate quick exchange of information. It is therefore suggested that an open office be implemented especially for the support staff to facilitate a communication. Also, this will help in the sharing of knowledge among the employees and help in reducing the cycle time in resolving problems at the client sites.
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5.0 STAFFING
In the service industry such as ERP support and maintenance, productive employees are essential in delivering value to customers (Schroeder, Goldstein and Rungtusanatham, 2011). It will take the companys ability to attract, develop and retain knowledgeable employees to be able to deliver on its promise of one stop service and resolving problems at the shortest possible time. It must be understood that each employees, especially the account managers carries valuable knowledge about clients business environment. From the point of recruiting an employee, the selection criteria must include the choice of the employees to work in Port Elizabeth so that employees that are passing time or not comfortable living in the city will not be employed.

In order to retain the employees of the company, the company should implement programmes that will ensure that the staffs are satisfied. This should include the work environment, availability of resources, and easy accesses to information, regular training, and internal support system that will ensure that employee are able to excel in their tasks. Also, a clear definition of the roles and responsibilities of each of the employee will go a long way in improving the productivity of each of the staff and the organization as a whole. Beside, a reward programme that is attached to the turnaround time and customer feedback should be implemented to give the staff the sense of value that the company attach to service delivery and satisfying the customers.

Despite that programmes mentioned above, it is obvious that at some points, employees will leave the company for different reason. Therefore, the company should ensure that consultants update the call logging system on how they have been able to solve the problems at the client site. This will form a knowledgebase that can be used for training purposes and as a backup in case the employee is no longer available.

5.1 Skills Management Process

Since the knowledge and skills level of the organisation influences the value stream and offering to the customers, a process to manage the skilling of the employees will be imperative. This process should make provision for two categories at entry point into this company. 1. Fellows: This will be college graduate with only fundamental knowledge in the Information Technology field. The fellows should be attached to other employees that will provide mentorship about the ERP system, then the basic business processes in the ERP system and a focus on a particular client. Employees at 13 | P a g e

this category will only attend to simply technical problem and should NOT have customer contact. While the technical and business process management skills of the fellows are being developed in-house, each of them must complete a definite soft-skill development programme before they can be regarded as consultant. 2. Consultant: A consultant would be an employee that has the required

experience in deliver technical and business related solutions in a way that meets the objectives of the company. It is suggested that the company develop its Consultants in-house through the fellowship programme and keep them satisfied to ensure retention. Employees from other companies with relevant experiences can also be brought on board. However, there must be an adequate communication of the companys objective and value proposition to the clients beyond the technical and business solutions.

5.2 Employee Performance and Appraisal

A proper system to measure the progress of employee would be put in place. Each of the employees should have goals that correlate with the organizations objective to deliver topnotch service at the shortest possible time. These goals should be measured by the metric available through the Support Call Logging system and the customer feedback on the calls handled by the each of the consultant. Motivations that are valuable to each employee should be used to reward performance and non-performing employees should be analysed properly to determine what sort of training or otherwise that they require to perform optimally or if they should be off-loaded from the companys employ.

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6.0 CAPACITY PLANNING

Capacity is defined as the maximum output that can be produced over a given period of time (Schroeder, Goldstein and Rungusanatham, 2011). Therefore the total number of man hours that the company has is its capacity. This will generally be measure by the number of hours each employee is expected to contribute over a period of time. For example each employee will be expected to contribute 40 man hours weekly. However, the total man hours available need to be properly aligned to the customers requirement and billable man hours. Caution should be taken to ensure that the company does not over or under staff at any point in regards to the expected customer requirement. To be able to achieve this short and long term capacity decision must be made using adequate forecasting and planning process.

6.1 Forecasting
Proper forecasting helps to determine what will happen in the future. Through the use of Service Level Agreement (SLA), the service options that the customers have selected, the company will be able to predict the monthly man hours requirements. However, scientific forecasting using time series model to determine the expected requirements of the customer especially in the long term. This will help in the scheduling of labor resources especially for premium clients. For example, the time series model can assist in determining periods that premium client require maximum attention due to their internal processes like stock taking etc.

6.2 Capacity Utilization and Bottleneck

Capacity utilization is the percentage of actual output relative to capacity. Getting more productivity from the resources available without hurting the service chain will reduce waste and increase profitability. This is the reason why utilization should be measured and analyzed constantly. The Support Call Logging system should be used to measure the billable hours of each employee against the total number of hours worked. This should be measured and analyzed weekly, monthly and annually. Bottlenecks are factors that imped the optimal utilization of capacity. In the planning the capacity of the company, factors such as the speed and availability of internet access and availability of the right tools can become bottlenecks and should be watched and taken cared of to increase utilization.
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6.3 Buffering Strategy

Because of the nature of the business, steps must be taken to ensure that at least an employee is available to answer questions and provide critical assistants to customers outside the normal office hours. Also the company can make plans to have stand-by independent contractors that will be able to assist the company in cases where the customer demand exceeds the capacity available.

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7.0 SUPPLY CHAIN DESIGN

The concept of supply chain is seen as the set of entities and relationships that cumulatively define materials and information flows both downstream towards the customer and upstream towards the very first supplier (Schroeder et al, 2011). In the past, little focus have been given to the supply chain management in the service industry. However, from the definition given above, the supply chain for the service industry can be seen as a set of relationships that defines the flow of information from the suppliers through the company to the customers.

In this case of an ERP support system, the most important contribution to success in the industry will be the building of strong relationships with the customer base (Cook, DeBree and Feroleto, 2001). Hence the supply chain effort should be geared at creating loyal customers, increasing the companys revenue, low customer turnovers, winning new customers through referrals and generally keeping the customers happy.

Again, It is understood that the employees of the company will play the major role in the business of this firm. The quality of the employees of the company will therefore determine what the company is able to offer to its client and its ability to reach its main goals. In this regard, the company through its employee would seek to control the costs of doing business, Quality it is able to offer, delivery of its services to the customers and the actual service that is offered. The continuous training and mandatory updating of the skills-set of the employees is therefore very important and must be address at the management level with definite programmes like career path management. As a knowledge-based service provider, the company would control the source of information and skills to it employees in order to manage the content of the information that flows to the customer. This can be modelled as shown below

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SOURCES OF INFORMATION

CUSTOMER REQUIREMENTS

Skills Development service providers

Technical Requirements

Internal Knowledge transfer HR and Skills Development Process Employees

Business Process Optimization

Quick Service Delivery

ERP Manufacturers Quality Control

internet

Effective Cost Management

Besides understanding the employees as the key factor in the supply chain, other factors that must be considers for the success of the supply chain include forecasting, capacity planning/utilization and the active monitoring of the Support call logging and scheduling process.

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8.0 QUALITY MANAGEMENT

Quality is the ability to satisfy or surpass the expectations of the customer requirement. Although the level of satisfaction varies from one customer to another, the strategy adopted by the company will require that the highest level of service quality be delivered at all time. To be able to achieve this, a proper quality metrics would be put in place to measure the dimension of the service offered. The feedback system should be used to measure the quality of service received by the customers using the SERVQUAL framework as define below; 1. Tangibility of Services: This would measure the customers perspective of the solution proffered by the employee and the speed at which the employee was able to resolve the problem. 2. Reliability: The amount of reworks will be measure against a target of zero percentage 3. Responsiveness: The customers perception of how helpful the employee was should be measure for each transaction and analysed regularly. 4. Assurance : The level of confidence that the customer has in the service provided by the employee would be uses to measure assurance 5. Empathy: The level of attention received during each transaction would be measured to from time to time.

This will be achieved through the use of survey at the end of each transactions and periodical quarterly of bi-annually survey to monitor the quality of the of the services provided by the company. From the use of surveys the aim of the company would be to measure and continuously improve on the value that the company adds to its clients, how this achieved and reduction of cycle time that the organization spent in solving problems without leading to reworks.

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References
Barnes d., 2008. Operations Management: An International Perspective. Cengage Learning EMEA.

Binney D. , 2012. From operations to Strategy: the new business process design agenda [Online]. Available at: <http://strategytheoryandpractice.com/fromoperations-to-strategy-the-new-business> [Assesses 07 July 2012].

Cook J. S., DeBree K., Feroleto A., 2001. From Raw Materials to Customers: Supply Chain Management in Service Industry. Sam Advanced Management Journal, PP 14-21.

Davis M., Heineke J., Balakrishnan J., 2007. Fundamentals of Operations Management. 2nd ed. McGraw-Hill/Irwin. Gartner Executive Programs, 2012. Gartner Newsroom [Online]. Available at: <http://www.gartner.com/it/page.jsp?id=1897514> [Assessed 20 June 2012].

Schroeder R. G., Goldstein S. M. and Rungtusanatham M. J., 2011. Operations Management: Contemporary Concepts and Cases. 5th ed. McGraw-Hill/Irwin.

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