I was fortunate to be asked to contribute to an article in the Herald Sun late last year entitled "Express too slow? Try the slow queue to speed things up"
I enjoy looking at retail processes but still surprised that Australia lags so far behind the rest of the world.
Cheers,
TPN
When I was a student one of my favourite pastimes was browsing through CD shops. I would spend many a spare hour doing so. Fast forward 15 years and CD shops are now almost complete a relic of a former age. But despite the fact that they're gone I don't miss them at all.
I now buy all my music via itunes and I can sit in the comfort of my own home, browsing my ipad, listening to samples of the music then purchasing and downloading the music instantly. The outcome of the process essentially remains the same over 15 years - buy music. But the process itself has become simpler, faster and more enjoyable. Technology has acted as an enabler, but this also required some customer centric thinking to get the mix right.
Soon we'll see the demise of bookshops (iPads and kindles will take care of that), Retail & Rental DVD shops (itunes and netflix will cream that) as well as post offices (dwindling postage numbers & prepaid options will kill them). And I won't miss those either. Sure we might all end up couch potatoes that don't have any need to move, but it will also free up all that wasted time traveling to retail stores so that we can do some exercise!
So what are the lessons from a process point of view?
The outcome may remain the same, but if we focus on the customer experience of the process, the customer gets what they really need, not what we think they want - or as Henry Ford once put it...
"If I'd asked people what they wanted they'd have said a faster horse".
Cheers,
TPN
I recently had a run of bad luck. Not only did I lose my iPod, I dropped my digital camera and broke the lense. Luckily I'm with AAMI Insurance, and luckily I chose to take out their personal valuables cover. This allowed me to claim both items on my insurance.
What followed is a tale of process that will astound you!
I checked online to see if I could lodge an online claim - no such luck. Although AAMI has an online policy manager, there is no portal to submit an online claim. So I call AAMI and I am promptly put through to the claims section. The friendly lady takes the details of my claims. Note the plural - claims. She then advises me that my two claims will be handled by two separate case managers and provides me with their contact details.
Wait a minute - two claims managers - why?
The friendly lady explains that as one is a loss and the other is a damage claim they are under two different policies and this must be handled by two different departments and hence two different claims managers. I bite my tongue. She then asks me to forward proof of purchase for the ipod to one claim manager (via email) and to obtain a quote for repair for the camera claim and send this quote (via e-mail) to the other claim manager. I informed them that it may be a few weeks until I was able to obtain the quote for repair.
A couple of days later I e-mailed the purchase receipt for the ipod to the e-mail address provided and put the camera into the repair shop to obtain a quote for repair. Unfortunately they advised that this would take around 3 weeks.
On the 2nd of August I e-mailed the proof of purchase of my ipod to AAMI for processing of my claim.
About two weeks later I received 2 voicemails on my mobile asking me to call AAMI, then a couple of days later two letters through the post. Strange given that I had sent the details via e-mail and also had advised of the delay in receiving the quote for repair.
On the 3rd of September I received the quote for repair and e-mailed it through to the other claims manager. I heard nothing so on the 16th of September (6 weeks after my initial contact) I called AAMI to ask what was going on.
"We're waiting on your information Mr Reid" said the confused lady.
"But I sent it several weeks ago to the e-mail you provided" I said
"Oh because we are a phone based business we rely on you to call us up to tell us that you've sent the e-mail so we can check for it" said the lady, matter-of-factly.
At this point my head was filled with images of the 1950's - the last time any business on this planet was "phone based". At this point I also went on an irate diatribe about the benefits of process and basic workflow systems to which she replied impotently
"I'm very sorry Mr Reid but I can see your e-mail now, I'll just process that repair and we will send you the money".
"Can't you just refund it to the credit card you have on file for me or just process it as a credit on my account?" I said.
"No sorry Mr Reid we have to refund it as cash - can I have your bank details and that will be processed in 5-7 working days..."
So I did, but what about my other claim?
"Oh I'll just transfer you to the other account manager Mr Reid..." said she.
"But can't you just refund that along with the transaction you are about to process?" I said in amazement.
"No Mr Reid, I'm sorry but that's a different type of claim handled by a different area - I have to transfer you to your claim manager". And so she did.
"Hello this is AAMI, how can I help you?"
Cue repeat of previous long winded story. Needless to say she also was a convert to the new revolution in phone based businesses and had also chosen to ignore my e-mail until I called in an irate condition.
"I will process that for you now Mr Reid and someone from the store you bought it from will be contacting you within 5-7 working days" she said.
"What? Can't I just have a cash refund like the other claim I just made?" I spluttered.
"No I'm sorry Mr Reid, this is a different type of claim and we aren't allowed to provide you with cash - it has to be in the form of a voucher for the store you bought it from".
Eventually I was called by the store, was posted a voucher and the rest is history, but think of the pain involved for both sides:
Take the time and cost of two almost identical processes and the manual effort required and multiply this by the thousands of claims processed in a year and you quickly see millions of dollars going down the drain.
But here's how to fix it:
It's really not that hard or that complicated, but some people really have a talent for making it seem that way.
Cheers,
TPN
P.S. This is my last post until early 2011 - thanks for listening to me in 2010 and I wish you and your families a fat and happy Christmas and new year (I know mine will be)!!!
One of the biggest wastes of time in the world of process is the excessive attention paid to the AS-IS state. Now before you scream and shout at me and call me a process heretic, I would like to add that I think looking at the as-is is essential. I have seen organisations that have skipped to the to-be state and it is nothing short of disastrous.
What I have an issue with are organisations spending vast amounts of man hours documenting as-is process in detail. Unless the as-is state is felt to be close to being optimised already, spending time documenting it in detail is a bit like writing a book then burning it.
When you know you are going to be improving a process, don't waste time on the as-is - do a workshop with stakeholders to define and agree the process, but there is no need to waste time documenting or modelling it. Taking a photo of the agreed process is sufficient.
What will separate you from the herd is moving to the improvement phase as rapidly as you can and delivering change which will bring business benefits - not creating more useless documents.
Cheers,
TPN
I struggle to think of a worse process than the one I'm about to discuss. It's a worldwide process - active in almost every country in the world, if not all. Wars are fought over it, businesses built on it and from my point of view it's inefficient and unnecessary in this day and age. What is it? It's cash.
Yes, those little coins that swim around in your pocket and which you throw into fountains to make your wishes with - they have been with us for thousands of years and I now believe the time is right to get rid of them forever. Let's think about a world without cash - a cashless society.
Cash transactions represent an highly inefficient process and one which adds little value from a customer experience point of view. It's a legacy thousands of years old that has come to be accepted, but which should not be tolerated any more. It's time we eradicated its use and made our lives simpler. And as for the fountains, well, they'll find something else to throw in them...
- TPN
There is often the misguided thinking that by simply automating a process we are optimising that process. After all if we remove the human element we often reduce time and cost, right? And this improves the process, right?
Wrong. The problem with simply automating the work fixes the effect and not the cause of work. Whilst the process may have disappered into system-land, it's not the fact that manual work has been reduced, it is the effect on the customer experience that needs to be considered.
Take a recent example: Cityrail, the NSW Australian train provider recently automated their ticketing to provide customers with the ability to purchase tickets from their website. Previously to buy a long term rail pass greater than 180 days you had to line up at a counter, collect a form, fill the form in then return the form and pay for your ticket. With cityrail's new automated system you could now buy your ticket online. Well, you could buy a ticket online: either monthly, quarterly or yearly. So, if, like me you wanted to buy a ticket for 5.5 months you'd have to buy a quarterly ticket, a monthly ticket (twice) then a fortnighly ticket.
So even though Cityrail automated a manual process to reduce queues at stations and make it easier for customers, they have increased the moments of truth by 4 times! The customer experience has deteriorated for many customers as they can't buy a ticket which suits their needs - so what do they do - go back and join the queue at the station!
So when thinking about automating processes, think about the number of moments of truth that are ocurring in the process, and look to eliminate or improve them. Process is not just about time and cost, it is fundamentally about the customer experience.
- TPN
When I was at University I studied the classic Human Resources stuff - Maslow's hierarchy of needs, etc. One of the classic studies (of which I have forgotten the name) always sticks in my mind.
The experiment measured how workers in a factory worked most productively. It essentially discovered that those who worked rapidly could only keep up the rapid work for a certain amount of time before they "burned out" whilst those that were most productive worked at a steady pace throughout.
What this shows is that the "fast" workers were probably operating near to 100% productivity, while the others were operating at, say 70%. When the fast workers burnt out they (for example) dropped to 30% productivity - so overall their productivity was less over the piece.
Where I am going with this is what I call the concept of "dead time". In any process where human beings are involved you will rarely or never have 100% productivity - it's just not our nature. "Dead time" is the gap between 100% productivity and actual productivity.
So why is this important? Well it needs to be considered when looking at processes. This is because it is a waste of effort, time, money, etc. to improve process steps that fall into "dead time". For example is it worth installing new lifts in a building that are super fast to enable employees to get to their desks quicker? I'd say probably not as this period of time may fall into "dead time". Is it worth spending money on a super fast coffee machine in the kitchen? Probably not because people will still stand around and talk to whoever is in the kitchen at the time.
These are simplistic examples, but it is always important to realise that there will always be percentage of "dead time" in every process - it isn't always worth optimising every stage of the process - making the judgement call of what fits into "dead time" is the tricky part.
- TPN
You'd think that in the midst of the "GFC" companies would be looking at ways to make their processes more efficient, yet there are still many companies out there that like to throw money away hand over fist.
One of these companies is a furniture chain called Fantastic Furniture ("The package deal kings"). I like fantastic furniture. I don't like all their products, but I get what they are trying to do. They are the budget furniture company and they've pretty much got hold of their target market by the short and curlies. Now this isn't a story about customer service - it's a story of internal process. I'm not going to whinge about them from a personal point of view as when you buy something cheap you often get cheap service - I can live with that if the price is right. But what I find amazing is when a company like theirs wastes money. OK, here's the story...
I looked online at their website and found a bed and cabinets that I wanted to buy. Actually I'd already seen it in the store. I would have loved to have bought online, but alas, no online store.
Mistake no 1: no online store.
So I call my local store and ask if it's in stock. Yes the bed is in stock he tells me but the cabinets will take longer. OK, says I, can I buy the bed now and collect the cabinets later? Yes, says he. All I need to do is pay a deposit over the phone go to the store, pay for the bed and then go and collect it at the warehouse?
Excuse me? says I. Can't I just pay for it over the phone and collect it from the warehouse? No says the man.
Mistake no 2: Poor process design fed by bureaucracy.
So I go to the store they look me up in the computer and alas I'm not there. We spend 10 minutes wrestling with the system and several calls to a mystery voice of god that tells them that that particular till doesn't work. They then find me and I actually get to pay for my bed.
Mistake no 3: Poor communication & IT support processes.
They then tell me that my items are all in stock - but wait didn't they tell me that my bedside cabinets were out of stock only 2 days ago?
Mistake no 4: Poor stock control and inventory processes
So I finally complete my transaction. Or at least I think so. The staff then take a manual docket pad and write out my receipt. Let me repeat that - THEY WRITE OUT MY RECEIPT. What on earth does their system do if it can't track stock and it can't print a receipt?
Mistake 4: Manual processes due to poor system functionality
So I take my hand written docket and drive to the warehouse. They give me an inaccurate map which gets me lost before I eventually find it. I get there and give my receipt to the chap at the warehouse. He looks at it and asks why I don't have a green slip. I tell him that's all they gave me. He grumbles that as they didn't write it out fully it will take longer to find the stock. He then proceeds to look up the computer and...write out another receipt. Did you get that HE WRITES OUT ANOTHER RECEIPT and gives that to me.
Mistake 5: lack of quality controls to ensure processes are followed
I eventually get all my stuff. It only took me 1.5 hours. But what did it cost Fantastic?
Total "lost" time = 17mins FOR ONE CUSTOMER AND ONE TRANSACTION!!!!
If you think about this in terms of the cost for 17 minutes of staff time multiplied by thousands of transactions you can envisage the amount of money fantastic are throwing away. Of course they could have avoided this entire 17 minute cost if they had an online system. But even if they didn't all they need is to update their system to be able to track stock in real-time and to eliminate the inefficient paper based system that they have become accustomed to. This would allow online tracking, reduce admin costs, control stock flow more efficiently and reduce customer touch time to allow their staff to concentrate on selling rather than performing laborious admin.
Fantastic, the Ninja has spoken. Please stop throwing your money away.
We have one of those hot water taps at work where you press the button and you get instant hot water.
After my recent post about how to save money and reduce time spent at the supermarket I decided to have a look online at the apple web store to see if there was anything that could improve the efficiency of my shopping process (after all, a paper template is so 1985).
Craig Reid is known throughout the business world as "The Process Ninja". He is a passionate advocate of business process management.
