Business Management Business Operations and Systems
The objective of this study is to outline the essential components for effective business operations management for a UK business whose products are delivered to the door. The parcel delivery conundrum will be examined using an appropriate system and methodology and a discussion will be provided to support appropriate business operations models. Included will be CATWOE, Root Definition and a detailed picture to illustrate the answer. This study will further recommend how the business should respond to this conundrum keeping in mind the possible technological and environmental impact. The changes will be illustrated by include the 'as is' and 'to be'. Finally, this work will discuss the managerial qualities and resources that are necessary for effective implementation of the new process and will use relevant models to discuss how the business performance can be measure post implementation.
Part I -- The Parcel Delivery Conundrum
Electronic commerce has made shipping more important than ever and this is not only in terms of the cost of shipping but of the how, when, and where of shipping. There are a vast majority of shipping companies to choose from and the ads all promise great results however, this is simply not the case. Research has shown that the number one reason that online shoppers abandon their shopping cart is that of shipping costs. (Forrester Research in: Bomford, 2012, p.1) In addition, it is shown in research that the entire purchase will be cancelled by 61% of customers if free shipping is not offered. (comScore, in: Bomford, 2012, p.1) It is also reported that free shipping is offered by 62% of all online retailers and 49% of all ecommerce transactions during 2010 included free shipping. Free shipping day of December 16, 2011 is reported to have "generated more sales online than any Friday in U.S. history" totaling more than $1 billion. (Freeshipping.org in: Bomford, 2012, p.1) The shipping conundrum however, is not necessarily concerned with costs of shipping. For example in the work of Andrew Bomford (2012) entitled "The Parcel Conundrum" it is reported that the parcel conundrum is "an experience almost all of us seem to share. The swift efficient world of online ordering meets the messy realities of the analogues world we actually live in. And it all seems to grind to a halt." (Bomford, 2012, p.1) The article goes on to report the experience of Richard Wilding, professor of logistics and supply chain management at Cranfield University and a victim of the parcel conundrum. Wilding states: "We were expecting a gift to arrive, and the courier firm told us it had been delivered. We told them we hadn't received anything, and the company said it had been delivered to a hedge. We haven't got a hedge." (Bomford, 2012, p.1) It is reported that the box was finally discovered weeks later and in a hedge approximately one-half of a mile away from Wilding's house. It is reported that some companies count a missed delivery card through the door as a successful delivery when making claims about their performance. However, the missed-delivery problem costs money as well as infuriating the customers. It is reported that in the UK "12% of deliveries fail first time, costing the industry an estimated £1bn in re-deliveries. For most people it's the frustration of a Royal Mail missed delivery card lying on the doormat. People frequently complain that some postmen deliver them without even knocking in order to save time. The same allegation is made of commercial couriers. Then there's the occasions when couriers delivering laptops or other valuables leave us waiting around all day before turning up at 17:59. A trip to the Post Office depot at 7am can be an irksome burden. And some couriers take your item back to warehouses on industrial estates many miles away." (Bomford, 2012, p.1) According to the Courier, "It's difficult for us too. You turn up at a house and no one's in. So you phone up the company and they try to get in touch with the customer and find out if it's OK to deliver it next door for instance. Often they can't get hold of the customer and you're standing there for half an hour or more wasting time. As with most service industries of course you get what you pay for. Customers paying for premium services can expect to get phone calls chasing them if delivery can't be made." (Bomford, 2012, p.1) One company stated that they would be more than happy to "follow people all over London trying to deliver a parcel as long as the customer paid for it. But most people opt for the cheapest option, or indeed free delivery, and that's where repeated attempts to deliver parcels make no financial sense." (Bomford, 2012, p.1) The majority of courier firms will reportedly deliver three times and no more. A deliverer for eCourier, a business started when tennis tickets were failed to be delivered is reported to have had its founder searching for a better method of delivery. It is reported that the company formulated a tracking system online, which uses GPS enabling customers to view the precise location of their shipment from the time it is shipped until it is delivered. When clients are able to view the driver being stuck in heavy traffic they at least feel that they are 'in the know' and to some extent this soothes their frustration. According to the report "There's nothing unusual in the technology. All courier companies can track their drivers. What's unusual is giving customers the power to do the same. Big courier firms will tell you if the parcel is in a depot or out for delivery, but not the precise coordinates." (Bomford, 2012, p.1) The report goes on to state that vague delivery times that the majority of companies commit to does not assist those who are at work during the day in knowing what time to expect their packages. However, companies are reported to be "increasingly narrowing down delivery times" and using text and email to inform customers about the time to expect their delivery. (Bomford, 2012, p.1) There is a large motivation for the retailer to get its delivery right in one try. Tracking technology is reported to be such that can be used "in other ways too…..how about tracking the customer?" (Bomford, 2012, p.1) Blackbay is a company reported to be providing services to courier phones and to have developed an application for the Smartphone that results in delivery firms locating their customers although the customer is somewhere other than the delivery address. The technology is reported as being "quite straightforward…we're taking advantage of social media. Lots of people on Facebook or Twitter for instance can expose their location in a controlled way. This application uses that information to track you." (Blackbay, 2012, p.1) It is reported that the delivery address is specified by the customer who then decides closer to time for delivery that they will be somewhere to accept the delivery. The individual is able to use an application allowing the courier to track them using a handheld device to a location that is only a short distance from the address given for delivery. It is reported that it is possible to build in safeguards to place limitations on the time that someone can be tracked and face recognition technology along with a requirement for use of a PIN number are both possible. Blackbay reports that the application is still under development but that it should be available in the next year with a premium of course. The solution to deliveries that are missed is reported as being such as a "combination of low and high tech innovations. From neighbor delivery, to better communication with customers, to GPS tracking, slowly the misery of wasted time and wasted journeys to depots to collect parcels will hopefully become a thing of the past. And fewer wasted journeys will also help to save the environment. Studies by Heriot Watt University have found a courier could try around 18 times to deliver a parcel and still emit less CO2 than someone driving to their local depot to collect it." (Blackbay, 2012, p.1)
Part II. Root Definition and CATWOE
The work of Karve (2012) entitled "Root Definition and CATWOE Model -- The Soft Systems Approach" reports that the first step in Soft Systems Methodology is to formulate the Root Definition of the System you are studying, analyzing, designing, evaluating or even quality assuring, inspecting or certifying. A Root Definition is a structured description of a system. It is a clear statement of activities which take place (or might take place) in the organization being studied." (Karve, 2012, p.1) A properly structured root definition is reported to be comprised by three elements and those being: (1) what; (2) how; and (3) why. (Karve, 2012, p.1) It is written in the following form:
A System to do X, by (means of) Y, in order to achieve Z.