Application Exercise # 1 (Common to session1 to 5) (50 marks) A. Draw a flow chart of any one function/process in your organization. (Marketing, Operations, Finance, Accounting, Human Resources and Information Systems) Use special symbols to draw the flow process chart for the above question Analyze the flow chart drawn above using the basic question. (How, What, When, Where & Who) Suggest improvements for increasing the efficiency or effectiveness of the above chosen function. B.
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For the function/process chosen, measure WIP and throughput and calculate cycle time of the operation applying Little’s law. Analyze reduction possibility of cycle time C. For the function/process chosen, identify all possible sources of variability. For any one source of variability, list the likely reasons. Identify the corrective action to ensure the permanent removal of these reasons from the system. Solution A: The process that I am choosing is of broking account opening in our new Wealth Advisory co. ) Account opening forms sent to the client along with all the other necessary forms with cross marked at places where the client needs to sign, for client convenient since the form has more than 25 signatures including other additional documents which are not part of the account opening form. – Day 1 2) The form would be with the client for 3-4 days since it had too many signatures and the form was very confusing. – Day 1 – 4 3) After the form is received from the client, the form is scrutinized and its sent back to client since the signatures are missed the next day. Day 6 4) After 2 days forms received again after all the necessary changes. – Day 8. 5) Day 9 – Day 11 the form is with SA as WIP since there are other internal process that needs to be fulfilled before the form goes for account opening like PSE limit, brokerage charges, EA mapping etc. 6) Day 12 the form reaches the account opening unit. 7) Day 13 the form is checked by the account opening unit and is returned to SA on Day 14 with other discrepancies that are there in the form which needs to be rectified before the account is opened. 8) Day 15 the form goes to the client back for further rectification. ) Day 18 – The form is received from the client and is sent to the account opening unit the same day. 10) Day 19 – The form reaches the account opening unit. 11) Day 20, the account opening form is checked for completion and sent for data entry. 12) Day 21 all the linkages is done and the account is opened. The flow chart for the above process is as drawn below: SYMBOL Description DAYS Account opening form (AOF) sent to the client along with other forms. D The AOF is with the client since the form has more than 25 signatures. 4 The form received by the Service Advisor (SA) & he/she scrutinises the form. 2 The AOF is sent back to client for missing signatures. 1 D The AOF is with the client for additional / missed out signatures. 2 The AOF is received by SA for Account opening. 1 SA checks and does other internal processing. 2 AOF sent to operations for account t opening. 1
Operation checks the form for completion. 2 AOF sent back to SA and SA sends it back to client for rectification. 1 D AOF with the client pending for signatures. 2 AOF received from the client and sent back to operations for A/c opening. 1 Operations checks the form and opens the account. 2 The form sent to RMU for record purpose. The lead time committed to the client is one week for the whole account to be opened on the system. However the total cycle time or time taken for account opening was 21 days.
This use to be usual process whereby a lot of time use to get wasted on account opening which use to cause a lot of customer angst due to the to & fro of the form and that the form was very confusing and that it had a lot of signatures. The co use to lose business since our business is related to market and market are volatile and at times the client use to get irritated and would do investments with another wealth advisor or would decide not to do business with us. Hence to reduce the Cycle time or the time taken for account opening, below mentioned steps were undertaken to reduce the account opening time. ) The SA were trained further in the account opening process and trainings were done jointly with the operations team so as to smoothen the account opening process. 2) Instead of physical forms travelling to the operations units, forms were scanned to them and the original forms would only reach the operations once the form was complete in all aspects. 3) SA were trained to go to clients whereby they would get all the documents signed from the client in one go, thereby reducing the no. of to and fro and the time the form would lie in the clients office without any action. B.
For the function/process chosen, measure WIP and throughput and calculate cycle time of the operation applying Little’s law. Analyze reduction possibility of cycle time. Solution B: Through Put rate: It is defined as the average rate at which units flow past a specific point in the process. Cycle Time: Cycle time is a time when a unit spends as Work in Process. As per Little’s law Cycle Time = Work in Process / Throughput time. Throughput time = Output / Time unit Hence, at any given time the no of accounts opened in a month would be around 7 to 8 and at any given point no.
Of account in process would be 10. Hence Throughput = 7/30 Cycle time = 10 / (7/30) = 10*30 / 7 = 300 / 7 = 42. After implementing the steps mentioned in point A, the time take for account opening was reduced to as follows. 1) The SA would meet the client and get his signatures on the AOF on day 0. 2) Do the internal processing and scan the AOF on Day1. 3) Ops would get back with Discrepancies on Day 2 and SA would resolve the same latest by day 4. 4) Account would get open latest by day 6. C.
For the function/process chosen, identify all possible sources of variability. For any one source of variability, list the likely reasons. Identify the corrective action to ensure the permanent removal of these reasons from the system. Solution C: The variability’s are as follows. 1) SA lacked proper training in account opening due to which lot of to and fro happens of the account opening form between the client, SA and operations unit. 2) Physical forms travelling to operations at another location. 3) Less staff due to which forms were not checked on time. ) The client needed to sign other forms including the AOF which were not part of the AOF and hence at times the SA would miss out in sending the same to the client. 5) Delay by the courier in delivering the forms to operations / back to SA. Due to the above mentioned variability’s we changed the AOF and all the other additional documents were made part of the AOF so no documents were missed when sending to the client. Also, trainings were imparted to the SA team so as to ensure that there was not much to and from of the AOF and instead of sending the forms in courier, forms were scanned to operations so as to reduce the time.