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ITSS 3300, Professor Kevin Short Assignment: Business Process Modeling (30 points)

Duration: 2-4 hours

Consider the following scenario: Steve’s Lumber Company on the Missouri River features a large selection of materials for flooring, decks, moldings, windows, siding and roofing. It is a small family business that is looking to expand. The prices of lumber and other building materials are constantly changing. When a customer requests a quote for pre-finished wood flooring, sales representatives consult a manual price sheet and then call the supplier for the most recent price. The supplier in turn uses a manual price sheet, which has been updated each day. Often the supplier must call back Steve’s reps because the supplier does not have the newest pricing information immediately on hand. Steve has hired you to assess the business impact of the situation and see what can be done for them to make this process more efficient. Complete the following: 1. Business Process. a. List at least 3 issues with the current process. (3 pts, 1 pt each) Process is manual (rather than automated), supplier is not always up-to-date on the pricing information causing the sales rep to misinform the customers, neither supplier nor sales rep have immediate access to guaranteed current price at all times

b. Explain the impact of the existing process on operational efficiency. (3 pts) With this current process, simple transactions between the company and the supplier are delayed because the mode of communication. Because of the fact that everything is manual and not always current, the supplier—as well as the sales representative—could easily misinform the customer. Due to the fluctuating lumber market, a more accessible system needs to be put in place in order to provide suppliers and sales reps with the correct current price.

2. Diagram the existing Process. Using a diagramming tool (Visio, Lucidchart, PowerPoint) to create a Business Process Model of the existing process (Current State). Copy/Paste the diagram in the space below. (7 pts)

3. Metrics. Identify 3 metrics that could be put in place to measure the impact of the existing process on operational efficiency. (6 pts, 2 pts each) 1) Tracking how long between the customer requesting a quote and the sales rep returning the CORRECT/CURRENT pricing 2) Tracking how many times the supplier has to call back to inform them the price was incorrect 3) Customer Churn Rate (misinforming or taking a long time to get back to a customer most likely causes some people to seek out other companies)

4. Process Improvements. a. Discuss the changes that could be made to make the process more efficient. (4 pts) First things first, convert as many processes as possible from manual to automated. Introducing some sort of software/business intelligence will ease communication between all three groups—supplier, sales rep, and customer— monumentally less complicated. Instead of having to call the supplier, the most current price should be inputted into the system which would cut down the time between someone requesting a quote and receiving word back. This would also reduce/completely get rid of the amount of time used when the supplier has to contact the rep to correct the information (given that the newest rates are promptly inputted into the system).

b. Explain how information systems could support those changes. Discuss what data the systems should capture and what decisions the system could improve. (3 pts) Using ITS, communications between the customers, Steve’s company, and the supplier should hypothetically run a lot smoother. In addition to this, information is more universally accessible. The system should contain data such as: cost of lumber for supplier, rate at which supplier is selling lumber, rate at which Steve’s company sells (based on a theoretical algorithm considering (1) rate at which lumber was bought and (2) projected profit margin in percent for each job), and labor cost/ square ft. With the previously listed information, Steve’s company could gather data and possibly lower expected profit for the sale of the lumber, and/or if customer churn rate is unexpectedly high based on the quote, Steve’s company could possibly look into switching suppliers (this is also given the company is keeping an eye on the supplier’s competitors).

c.

Create a second Business Process Model for a Future State. Copy/Paste the diagram in the space below. (4 pts)...