evaluated applications from academics bidding for research grants available under the ‘cooperation and foundations’
scheme of the European Union. This scheme distributed relatively small grants (less than A100,000) to fund the early stages of cooperative research between universities in the European Union. Based in Brussels, the CEU’s objectives were to make decisions that were consistently in line with directory guide rules, but also to give as speedy a response as possible to applicants. All new applications are sent to the CEU’s applications processing unit (CEUPU) by University Liaison Officers (ULOs) who were based at around 150 universities around the EU. Any academic who wanted to apply for a grant needed to submit an application form (downloadable online) and other signed documentation through the local ULO. The CEUPU employs three ‘checkers’ with three support and secretarial staff, a pool of twelve clerks who are responsible for data entry and filing, ten auditors (staff who prepare and issue the grant approval documents), and a special advisor (who is a senior ex-officer employed part-time to assess non- standard applications).
Véronique Fontan was the manager in charge of the Central Evaluation Unit’s applications processing unit (CEUPU). She had been invited by the Directory chief execu- tive, Leda Grumman, to make a presentation to senior colleagues about the reasons for the success of her unit.
The reason for her invitation to the meeting was, first, that the systems used for handling new grant applications were well proven and robust, and, secondly, that her operation was well known for consistently meeting, and in many cases exceeding, its targets.
Véronique set a day aside to collect some information about the activities of the CEUPU. She first reviewed her monthly management reports. The information system pro- vided an update of number of applications (by week, month and year), the number and percentage of applications approved, number and percentage of those declined, the cumulative amount of money allocated, and the value of applications processed during the month. These reports identified that the Unit dealt with about 200 to 300 applica- tions per week (the Unit operated a five-day 35-hour week) and all the Unit’s financial targets were being met. In addition most operational performance criteria were being exceeded. The targets for turnaround of an application, from receipt of an application to the applicant being informed (excluding time spent waiting for additional information from ULOs) was 40 working days. The average time taken by the CEUPU was 36 working days. Accuracy had never been an issue as all files were thoroughly assessed to ensure
Case study
The Central Evaluation Unit
that all the relevant and complete data were collected before the applications were processed. Staff productivity was high and there was always plenty of work waiting for processing at each section. A cursory inspection of the sections’ in-trays revealed about 130 files in each with just two exceptions. The ‘receipt’ clerks’ tray had about 600 files in it and the checkers’ tray contained about 220 files.
Processing grant applications
The processing of applications is a lengthy procedure requiring careful examination by checkers trained to make assessments. All applications arriving at the Unit are placed in an in-tray. The incoming application is then opened by one of the eight ‘receipt’ clerks who will check that all the necessary forms have been included in the application.
This is then placed in an in-tray pending collection by the coding staff. The two clerks with special responsibility for coding allocate a unique identifier to each application and code the information on the application into the informa- tion system.
The application is then given a front sheet, a pro forma, with the identifier in the top left corner. The files are then placed in a tray on the senior checker’s secretary’s desk.
As a checker becomes available, the senior secretary provides the next job in the line to the checker. In the case of about half of the applications, the checker returns the file to the checkers’ secretaries to request the collection of any information that is missing or additional information that is required. The secretaries then write to the applicant and return the file to the ‘receipt’ clerks who place the additional information into the file as it arrives. Once the file is complete it is returned to the checkers for a decision on
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Source: © Getty Images
the grant application. The file is then taken to auditors who prepare the acceptance or rejection documents.
These documents are then sent, with the rest of the file, to the two ‘dispatch’ clerks who complete the documents and mail them to the ULO for delivery to the academic who made the application. Each section, clerical, coding, checkers, secretarial, auditing or issuing, have trays for incoming work. Files are taken from the bottom of the pile when someone becomes free to ensure that all documents are dealt with in strict order.
Véronique’s confidence in her operation was some- what eroded when she asked for comments from some university liaison officers and staff. One ULO told her of frequent complaints about the delays over the process- ing of the applications and she felt there was a danger of alienating some of the best potential applicants to the point where they ‘just would not bother applying’. A second ULO complained that when he telephoned to ascertain the status of an application, the CEUPU staff did not seem to know where it was or how long it might be before a decision would be made. Furthermore he felt that this lack of information was eroding his rela- tionship with potential applicants, some of whom had already decided to apply elsewhere for research funding.
Véronique reviewed the levels of applications over the last few years which revealed a decline of five per cent last year and two per cent the year before that on the
number of applications made. Véronique then spent about ten minutes with four of the clerks. They said their work was clear and routine, but their life was made difficult by university liaison officers who rang in expecting them to be able to tell them the status of an application they had submitted. It could take them hours, sometimes days, to find any individual file. Indeed, two of the ‘receipt’
clerks now worked full-time on this activity. They also said that university liaison officers frequently complained that decision-making seemed to be unusually slow, given the relatively small amounts of money being applied for.
Véronique wondered whether, after all, she should agree to make the presentation.
Questions
1 Analyse and evaluate the processing of new applications at the CEUPU:
– Create a process map for new applications – Calculate the time needed to process an individual
application cycle time for the process
– Calculate the number of people involved in the processing of an application
– Explain why it is difficult to locate an individual file.
2 Summarize the problems of the CEUPU process.
3 What suggestions would you make to Véronique to improve her process?
These problems and applications will help to improve your analysis of operations. You can find more practice problems as well as worked examples and guided solutions on MyOMLab at www.myomlab.com.
Read again the description of fast-food drive-through processes at the beginning of this chapter. (a) Draw a process map that reflects the types of process described. (b) What advantage do you think is given to McDonald’s through its decision to establish a call centre for remote order-taking for some of its outlets?
A laboratory process receives medical samples from hospitals in its area and then subjects them to a number of tests that take place in different parts of the laboratory. The average response time for the laboratory to complete all its tests and mail the results back to the hospital (measured from the time that the sample for analysis arrives) is 3 days. A recent process map has shown that, of the 60 minutes that are needed to complete all the tests, the tests themselves took 30 minutes, moving the samples between each test area took 10 minutes, and double-checking the results took a further 20 minutes. What is the throughput efficiency of this process? What is the value-added throughput efficiency of the process? (State any assumptions that you are making.) If the process is rearranged so that all the tests are performed in the same area, thus eliminating the time to move between test areas, and the tests themselves are improved to halve the amount of time needed for double-checking, what effect would this have on the value-added throughput efficiency?
A regional government office that deals with passport applications is designing a process that will check applications and issue the documents. The number of applications to be processed is 1,600 per week and the time available to process the applications is 40 hours per week. What is the required cycle time for the process?
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Problems and applications
For the passport office, described above, the total work content of all the activities that make up the total task of checking, processing and issuing a passport is, on average, 30 minutes. How many people will be needed to meet demand?
The same passport office has a ‘clear desk’ policy that means that all desks must be clear of work by the end of the day. How many applications should be loaded onto the process in the morning in order to ensure that every one is completed and desks are clear by the end of the day? (Assume a 7.5-hour (450-minute) working day.) Visit a drive-through quick-service restaurant and observe the operation for half an hour. You will probably need a stop watch to collect the relevant timing information. Consider the following questions.
(a) Where are the bottlenecks in the service (in other words, what seems to take the longest time)?
(b) How would you measure the efficiency of the process?
(c) What appear to be the key design principles that govern the effectiveness of this process?
(d) Using Little’s law, how long would the queue have to be before you think it would be not worth joining the queue?
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Chopra, S., Anupindi, R., Deshmukh, S.D., Van Mieghem, J.A.
and Zemel, E. (2006) Managing Business Process Flows, Prentice-Hall, Upper Saddle River NJ. An excellent, although mathematical, approach to process design in general.
Hammer, M. (1990) Reengineering work: don’t automate, obliterate, Harvard Business Review, July–August. This is the paper that launched the whole idea of business processes and process management in general to a wider managerial audience. Slightly dated but worth reading.
Hopp, W.J. and Spearman, M.L.(2001) Factory Physics, 2nd edn, McGraw-Hill. Very technical so don’t bother with it if you aren’t prepared to get into the maths. However, there is some fascinating analysis, especially concerning Little’s law.
Smith, H. and Fingar, P. (2003) Business Process Manage- ment: The Third Wave, Meghan-Kiffer Press, Tampa, Fla.
A popular book on process management from a BPR perspective.
Selected further reading
www.bpmi.org Site of the Business Process Management Initiative. Some good resources including papers and articles.
www.bptrends.com News site for trends in business process management generally. Some interesting articles.
www.bls.gov/oes/ US Department of Labor employment statistics.
www.fedee.com /hrtrends Federation of European Employers guide to employment and job trends in Europe.
www.iienet.org The American Institute of Industrial Engineers site. This is an important professional body for process design and related topics.
www.opsman.org Lots of useful stuff.
www.waria.com A Workflow and Reengineering Association web site. Some useful topics.
Useful web sites
Now that you have finished reading this chapter, why not visit MyOMLab at www.myomlab.comwhere you’ll find more learning resources to help you make the most of your studies and get a better grade?
Introduction
Products and services are often the first thing that customers see of a company, so they should have an impact. And although operations managers may not have direct responsibility for product and service design, they always have an indirect responsibility to provide the information and advice upon which successful product or service development depends.
But, increasingly, operations managers are expected to take a more active part in product and service design. Unless a product, however well designed, can be produced to a high standard, and unless a service, however well conceived, can be implemented, the design can never bring its full benefits. Figure 5.1 shows where this chapter fits into the overall operations model.