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G.W Elgin Case Study Solution

G.W Elgin Case Study Solution

Executive SummaryG.W Elgin Case Study Solution

G.W Elgin is involved in the business of supplying high-value sports bicycles both indirectly to the retail industry and directly to consumers under the name of Elgin Framistat since 1915, the business has witnessed four generations of personal relationships with the industry. The business operations have been of a niche supplier to the market and also supply some parts to other equipment manufacturers. The market stability of the firm is threatened by the changes in the commercial practices which include competitive pressures, industry overcapacity, Internet purchasing practices, and just-in time inventory management. These changes have affected the sales and in turn profit drastically.

The business has been running on personal relationships with the customers and taking their orders over the phone. The drawbacks of the current business operation included placement of order during standard business hours. The customers neither had access to any update of the status of their orders nor could they verify it in any way. The error rate and cycle time was increasing over time. The documents were transferred at a very slow pace via inter office mail and consumed a lot of time. The credit reports were received via fax. In order to overcome these problems a change was required in the way Elgin operations were carried out. This change should include elimination of all the paperwork and automate the process flow of the operations. Customers should be provided with 24 hour access to verify and order products.

The “to be” process is the same it is just that it has been automated. The operating system should be integrated well and updated. This would result in all the departments to be on the same page and they would be able to view all the updated details of an order and would avoid duplication of work and confirmation from customers. Elgin should bring flexibility to the system; they should have various means via which the customer could place the order. Maintain a record of customer’s data base and send them updated catalogues as soon as they arrive via email or by mail so that they know what’s available and what’s not. Plus the orders made by the customers should be updated on the operating system. The automated system would decrease paperwork, errors, and cycle time.

BPMN Model of the “as is” Process

The order processing consists of one high-level process and three sub processes:

  • High-level Sales Order process
    • Customer order
    • Obtain credit information
    • Review credit

The Sales Order method consists of the progression of taking the customer’s order over the phone, and scrutinizes it for credit being on hand for that customer. If credit is available (20% of the time), the order is fulfilled by issuing a work order. If credit is not available (80% of the time), then the process of getting the credit information is followed, where ratings are obtained from a credit rating agency. Upon receiving the report with risk classifications of high, medium and low, a process of reviewing credit is followed.

This has quite a few potential considerations. If the risk is low, then the order is processed. If the risk is high, then the order is discarded. When there is a medium level of risk, a manager does thorough checking and decides whether to accept the order or discard it.

All sales order of Elgin and associated forms are written by hand, which every now and then causes major misinterpretations. The structure of inter-office mailing system is designed in a way that has two pick-ups and two deliveries everyday at four-hour gaps. The sales, order-processing, and accounting organizations work one shift daily between 8:15 AM and 5:15 PM Monday through Friday. A sales order that is acknowledged on a Friday afternoon is generally accepted by the end of business on Tuesday.

With the exemption of the count of a fax machine in 1989 to the method in which credit rating is obtained from credit rating agencies, Elgin’s Sales Order method has remained a handbook procedure since it was last revised in 1937. Employees organize all forms by writing information on preprinted forms and sending the finished forms with copies of sustaining forms in the inter-office mailing system to the next task in the course.

In the period of business-to-business (B2B) e-commerce and web based buying and selling, Elgin accepts orders via telephone only and that too in its time zone and only between Monday morning and Friday afternoon between 8:15 AM and 5:15 PM. Although a few of its contributions are striking to other automotive equipment manufacturers (OEMs), Elgin’s sales to the OEM sector are miniscule. Elgin’s BPR panel erudite that many suppliers and retailers think it as it is a complicated company to deal with for the reason that they have either heard of or had trouble in inserting an order with Elgin.

Elgin’s accounting association is accountable for assessing the credit value of each customer upon acceptance of an order. Accounting requirements is an external credit-reporting association to put in order a credit-risk analysis from the information that Elgin provisions. An order-processing clerk sets up a paper form that constitutes pertinent sales information that includes the customer’s name, customer-contact information, model number, quantity, unit cost, sales representative’s ID and promised delivery date. The information is verified by the order-processing clerk with the customer’s purchasing agent before dispatching, the sales-order form to the accounting clerk via inter office mailing system. A credit rating request is then prepared by the accounting clerk who contains the customer’s name, customer-contact information, and order amount, and faxes the request and a sales-order copy to the external credit-reporting organization. The reporting agent classifies it as a low, medium, or high risk to the customer’s purchase request and within two hours faxes a copy of its rating to Elgin’s accounting clerk. A new updated sales order is prepared by Elgin’s accounting clerk that constitutes the credit-rating information and dispatches it to the accounts receivable clerk via inter office mailing system. The customer is well thought-out a low risk 20% of the time, a medium risk 60% of the time and a high risk 20% of the time.

 G.W Elgin Case Study Solution

Data Analysis

In order to simulate the data it is very important conduct a detailed analysis of the firm, so that the areas that are causing issues can be highlighted and be resolved accordingly. This analysis would cover the details of the company, the view point of employees and the customer feedback. The top executives of the firm consider the current ordering system as a unique selling proposition for their firm which distinguishes them from others and has been adding the “personal touch” to their products to which customers have been relating to over these years. It was also seen that the employee turnover rate was pretty high and that the employees working were de motivated as they were not compensated well for the work they did, they were paid low salaries, and there was less room for advancement and growth. So when the workforce is not happy with the work they are doing the direct affect is on the customers, the unwilling employees did not try to build good long term relationships with the customers and did not make an effort to go an extra mile for them in order to satisfy them.

Customers of Elgin had issues with the accuracy of the operating system, they would respond late and then different clerks would call them up to verify the same data, that means the management did not have the systems integrated where one could see that the data has been verified already. Another issue faced by the customers was regarding visibility of the orders that were placed with the firm. There was no one assigned to update the customers regarding the status of the orders. Even if they were communicated about the status was when the order was refused and that too was with an unspecified reason as for why the order was refused or wasn’t completed. The customers were allowed to place orders at the firm’s convenience and not customer’s convenience. Elgin had a fixed schedule of time and out of that time period they did not take any orders from the customers. A couple of times it happened that the customer called in to place the order from the catalog and was then informed that the product is no longer available and that they had the old catalogue due to which the desired ordered could not be placed.

Taking in view the perspective of the employees that were working, they showed signs of frustration. They felt that a lot of mistakes took place when the data was copied from one form to the other and that it was a monotonous job where their skills were not utilized properly. In a couple of cases the whole data was transposed when copied from one form to another and the need to contact the customer arose so that the details of the details of the order could be verified so that it could be processed correctly. The current operating system increased paperwork, errors, and cycle time that frustrated the young computer literate professionals that these could be reduced by state of the art technology and modern techniques but still the historic way of recording data was in practice. The order processing system was very error prone in today’s era; it worked well when Elgin had fewer product lines and were processed by technicians who knew the entire product line and its uses. But now the similar numbers of the parts and catalogues and similar names of product lines. The cycle time could not be reduced using the inter office mail and the paper forms. Even in the case where fax machine is used there should be someone who should be available at the receivers end to verify it and process it further.

Analysis of Key Problem Areas 

There are a couple of problems that arose at EIgin which led to the decrease in sales of the products and the profits of the firm hence the growth of the firm was deeply affected. The problems faced by Elgin are discussed below:

Hesitant to change: The top management of Elgin believes that the operating system of the firm should have changed ten years ago but have not done so as they believe that the way they work adds a personal touch to the brand. So they are hesitant to change the system.

Dissatisfied Employees: The employees working at Elgin are not happy with their jobs and how things work at Elgin. That is why it has been seen that the employee turnover rate was pretty high and that the employees working were de-motivated as they were not compensated well for the work they did, they were paid low salaries; there was less room for advancement and growth.

Inaccuracy of the operating System: the customers of Elgin faced a lot of issues with the inaccurate operating system. The customers complain that they would respond late and then different clerks would call them up to verify the same data, that means the management did not have the systems integrated where one could see that the data has been verified already.

Invisibility of orders: Invisibility of orders is another issue that was faced by the customers was regarding visibility of the orders that were placed with the firm. There was no one assigned to update the customers regarding the status of the orders. Even if they were communicated about the status was when the order was refused and that too was with an unspecified reason as for why the order was refused or wasn’t completed.

Inconvenient and Inflexible: The customers were allowed to place orders at the firm’s convenience and not customer’s convenience. Elgin had a fixed schedule of time and out of that time period they did not take any orders from the customers.

Non-updated Customers: A couple of times it happened that the customer called in to place the order from the catalogue and was then informed that the product is no longer available and that they had the old catalogue due to which the desired ordered could not be placed.

Increased paperwork, errors and transposition of data: The employees working showed signs of frustration. They felt that a lot of mistakes took place when the data was copied from one form to the other and that it was a monotonous job where their skills were not utilized properly. In a couple of cases the whole data was transposed when copied from one form to another and the need to contact the customer arose so that the details of the details of the order could be verified so that it could be processed correctly.

Operating System: The current operating system increased paperwork, errors, and cycle time that frustrated the young computer literate professionals that these could be reduced by state of the art technology and modern techniques but still the historic way of recording data was in practice. The order processing system was very error prone in today’s era; it worked well when Elgin had fewer product lines and were processed by technicians who knew the entire product line and its uses. But now the similar numbers of the parts and catalogues and similar names of product lines. The cycle time could not be reduced using the inter office mail and the paper forms.

Inter-Office Mail: the inter office mail at Elgin is very time consuming and very slow. The employees involved in processing the order believe that using paper forms and interoffice mail the demands are not met in order to reduce the cycle time.

Request and Receipt of Reports: The credit reports are requested and received by fax. Where fax machine is used there is no one available to receive the report and process it in time.

Solutions to the Problems 

The problems faced by Elgin are majorly due the reason that they did not adopt the changing technology. The people are the same but their needs and wants are different now, they expect more from the same brand. And if that specific brand is unable to provide them with what they require, they would, and this poses a big threat to the firm as there is a lot of competition in the market and it is very easy for the customer to switch the brand.  The proposed solutions to the above mentioned problems are defined below:

Adaptation: Even though the management of Elgin believes that the operating system of Elgin is and has been adding the personal touch to the brand they should change the operating system because if they continued with the same system there is a greater chance that the brand might not even exist. The customers are demanding more from the brand, the brand should work towards the goal to deliver what is demanded from them.

Satisfy Employees: The employees are a key asset to any business, as they are the ones that add value to the firm that is why the employers should make sure that their employees are happy and motivated. When the workforce is not happy with the work they are doing the direct affect is on the customers, the unwilling employees did not try to build good long term relationships with the customers and did not make an effort to go an extra mile for them in order to satisfy them. The employees can be satisfied by compensating them well with the work they do by justified salary, award ceremonies and prizes, so that they could know that their hard work is noticed and appreciated. The employers should give each and every employee an equal chance to grow and advance. Happy employees would give out better output and would not only satisfy the consumers but will provide them with consumer delight.

Integration: The operating system should be integrated well and updated. This would result in all the departments to be on the same page and they would be able to view all the updated details of an order and would avoid duplication of work and confirmation from customers. The data in the system should be updated all the times so that errors can be reduced.

Transparency of orders:  the orders made by the customers should be updated on the operating system. There should be a helpline number available where customers can call in and check the status of their orders with their respective order numbers. This facility should also be available online at the website where customers could punch in their order numbers and know the status of the order. If any order was to be refused it should have a specific logical reason attached to it that why it is being refused or not completed.

Flexibility: Elgin should bring flexibility to the system, they should have various means via which the customer could place the order, one way is during working hours, the second way is via helpline numbers that are available 24/7 what could be processed the next working day, thirdly the website, customers should be able to place orders on the website also which could be processed on the next working day. The clerks from the office can call up the customers next day and verify the details of the order from the customer who placed it via helpline or website.

Keep your customers posted: Maintain a record of customer’s data base and send them updated catalogues as soon as they arrive via email or by mail so that they know what’s available and what’s not. Plus the orders made by the customers should be updated on the operating system. There should be a helpline number available where customers can call in and check the status of their orders with their respective order numbers. This facility should also be available online at the website where customers could punch in their order numbers and know the status of the order. If any order was to be refused it should have a specific logical reason attached to it that why it is being refused or not completed.

Reduction in paperwork and errors: The database should be maintained via automated system which would reduce any chance of error or duplication. When the data is received it should be directly entered into the system, so that there is no chance of it being lost or erroneously copied or duplicated.

Automated Operating System: The automated system would decrease paperwork, errors, and cycle time that frustrated the young computer literate professionals. The operating system should be integrated well and updated. This would result in all the departments to be on the same page and they would be able to view all the updated details of an order and would avoid duplication of work and confirmation from customers. The data in the system should be updated all the times so that errors can be reduced. The young professionals would be able to enhance their skills with the automated system in place. The system should have separate numbers and names for the data that is inputted which would avoid any duplication.

Email: The concept of inter office mail at Elgin is very time consuming and very slow this should be replaced with email, which would reduce the cycle time.

Request and Receipt of Reports: The credit reports requested and received by fax should be replaced with emails also.

BPMN Model of the “to be” Process

The “to be” process is the same it is just that it has been automated. The inter office mail would be discontinued and would be replaced by emails. The operating system should be integrated well and updated. This would result in all the departments to be on the same page and they would be able to view all the updated details of an order and would avoid duplication of work and confirmation from customers. The orders made by the customers should be updated on the operating system. There should be a helpline number available where customers can call in and check the status of their orders with their respective order numbers. This facility should also be available online at the website where customers could punch in their order numbers and know the status of the order. Elgin should bring flexibility to the system, they should have various means via which the customer could place the order, one way is during working hours, the second way is via helpline numbers that are available 24/7 what could be processed the next working day, thirdly the website, customers should be able to place orders on the website also which could be processed on the next working day. The clerks from the office can call up the customers next day and verify the details of the order from the customer who placed it via helpline or website.

Maintain a record of customer’s data base and send them updated catalogues as soon as they arrive via email or by mail so that they know what’s available and what’s not. Plus the orders made by the customers should be updated on the operating system. The automated system would decrease paperwork, errors, and cycle time that frustrated the young computer literate professionals. The operating system should be integrated well and updated. This would result in all the departments to be on the same page and they would be able to view all the updated details of an order and would avoid duplication of work and confirmation from customers. The data in the system should be updated all the times so that errors can be reduced.

G.W Elgin Case Study Solution

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