Question

Consider the booking-to-cash process at a photography company

(Fotof) described in the following case study. Which types of waste can you identify

in this process? (500-700 words)

Fotof provides photography services in the fields of family photography, personal event

photography (e.g. weddings and party photography) and commercial photography (e.g.,

corporate events). One of the core processes of Fotof is its booking-to-cash process, which

goes all the way from the moment a customer makes a booking for a photo shooting session,

through the order placement, to the moment the customer pays and obtains the ordered

pictures. In the last year, Fotof received 10K orders from commercial customers, and 80K

orders from private customers.

The booking-to-cash process starts when a customer makes a booking for a shooting session

at a photo studio. A booking can be done via phone or via email addressed directly to a

specific photo studio. The request is handled by a customer service representative at the

photo studio. Each studio employs two customer service representatives: a senior one, who

is also manager of the studio, and a junior one. The customer service representative enters

the details of the booking into the photo studio information system.

The booking is assigned to one of the photographers of the studio. After a photo shooting

session, the photographer uploads the pictures to a file server. Eventually, a technician

cleans up the pictures by deleting duplicates and failed shots. Later the technician edits

the remaining shots and arranges them into a photo gallery using a dedicated photo studio

software tool. Once the gallery is completed, the customer is notified by email. The

notification includes a URL of the gallery.

Customers can view the gallery, select the pictures they wish to order in print (and how

many copies) and those they wish to get in digital copy (full resolution). Customers can also

annotate a selected picture in order to ask for additional editing (special requests). When

placing their order, customers can specify whether they will pickup the printed copies at

the studio or have them delivered by post. In the latter case, a shipment fee is added to the

order. Once the customer has submitted the order, a technician performs additional editing

(if required by the customer). In the case of special requests, the technician may need to

communicate with the customer by email or phone to clarify the request and to determine

how to fulfill it, and whether the special request will entail an additional fee and how much.

If printouts are required, the technician prints them out, puts them in an envelope, and drops

them at the studio’s counter.

Pictures from a shooting session are kept in the corresponding gallery for up to 30 days (a

reminder is sent to the customer 5 days before the expiry date). If a customer has not placed

an order past this period, an invoice is sent for the minimum billing amount (see below).

Invoices are payable within 7 days of their issue. A customer service representative sends a

reminder when an invoice is overdue.

Once the pictures are ready, a customer service representative determines the amount

to be invoiced (including additional fees for special requests). The customer service

representative then produces an invoice and sends it to the customer. Once the invoice

has been paid, the customer service representative packs and sends the printouts for postal

delivery (if the customer ordered printouts) and sends a URL to the customer where

the customer can find the full-resolution digital pictures they ordered. The matching of

incoming payments to invoices is done automatically by an accountancy system (the same

system that is used to issue invoices).

Booking or order cancelations can occur in three ways: (i) prior to the shooting session

(booking cancelation); (ii) in case of no-show (the customer did not show up to the shooting

session and did not reschedule it); or (iii) after the shooting, if the customer does not order

any pictures within 30 days. Cancelations prior to the photo shooting session do not incur

a fee. Cancelations due to no-shows do not attract a fee if they are in-studio; they attract a

fee of e 50 if they are “on location”. In case of a no-show, the customer may reschedule

the booking to a later day but the no-show fee for on-location shootings is charged to the

customer in any case. If a customer does not order any picture after a shooting session,

the customer is invoiced a photo shooting fee of e 100 for in-studio sessions (e 150 for

on-location ones).

Answer 1

Booking to cash or Oder to cash at fotof

Fotof provides photography services in the fields of family photography, personal event photography (e.g. weddings and party photography) and commercial photography (mainly corporate events photography). With a portfolio of 25 photo studios, Fotof Studio is the largest chain of photo studios in Northern Europe. Fotof's 2014 turnover was 17.6 Million euros, out of which 25% from sales to corporate customers and the rest from private customers. One of core process of Fotof is its booking-to-cash process, which goes all the way from the moment a customer makes a booking for a photo shooting session, through the order placement, and up to the moment the customer pays and obtains the ordered pictures. In 2014, Fotof received 10K orders from commercial customers, and 80K orders from private customers. Booking-to-cash process The process starts when a customer makes a booking for a shooting session at a photo studio. A booking can be done via phone or via e-mail addressed directly to a specific photo studio. The request is handled by a customer service representative at the photo studio. Each studio employs two customer service representatives: a senior one, who is also manager of the studio, and a junior one. The customer service representative enters the details of the booking into the photo studio information system. The entered data includes - Customer data (full name, phone number, e-mail, and if applicable company name, company address and company registration number for invoicing purposes) - Booking data: start of the session, duration, type of shooting (family, personal event or corporate event) whether the shooting session is in-studio or "on location", special equipment required (e.g. lighting equipment) The booking is assigned to one of the photographers of the studio (there are on average 3.5 photographers per studio). On average, an in-studio session lasts 45 minutes, while an on-location session lasts 3.5 hours (including transportation time). 20% of private customer shootings and 100% of corporate customer shootings are onlocation. After a photo shooting session, the photographer uploads the pictures to a file server. Eventually, a technician (2 technicians per studio on average) cleans up the pictures by deleting duplicates and failed shots. Later the technician edits the remaining shots and arranges them into a photo gallery using a dedicated photo studio software tool. Once the gallery is completed, the customer is notified by e-mail. The notification includes an URL where the customer can find the pictures. Customers can view the gallery, select the pictures they wish to order in print (and how many copies) and those they wish to get in digital copy (full resolution). Customers can also annotate a selected picture in order to ask for additional editing (special requests). When placing their order, customers can specify whether they will pick-up the printed copies at the studio or have Once the customer has places an order, a technician performs additional editing (if required by the customer). In the case of special requests, the technician may need to communicate with the customer by e-mails or phone to clarify the request and to determine how to fulfill it, and whether the special request will entail an additional fee and how much. If printouts are required, the technician prints them out, puts them in an envelope and drops them in the studio's counter. Digital copies are placed on a dropbox folder with the order number (but the link is only shared with the customer after payment). Once the pictures are ready, a customer service representative determines the amount to be invoiced (including additional fees for special requests), produces the invoice and sends it to the customer. The customer can pay by bank transfer or directly at the studio, for example when they come to pick up printed copies. When a customer service representative detects that payment has arrived by bank transfer, they mark the corresponding order as paid. If required they pack and send any printouts orders for postal delivery and if applicable they send the Dropbox link with digital copies to the customer. Pictures from a shooting session are kept in the corresponding gallery for up to 30 days (a reminder is sent to the customer 5 days before the expiry date). If a customer has not placed an order past this period, an invoice is sent for the minimum billing amount (see below). Invoices are payable within 7 days of their issue. A customer service representative sends a reminder in case they detect an overdue invoice. Similarly, a customer service representative sends a reminder if they detect a customer has not collected printouts more than 7 days after these have been ready for pickup. Booking or order cancellations can occur in three ways: (i) prior to the shooting session (booking cancellation); in case of no-show (the customer did not show up to the shooting session and did not re-schedule it); or (iii) after the shooting, if the customer does not order any pictures within 30 days. Cancellations prior to the photo shooting session do not incur a fee. Cancellations due to no-shows do not attract a fee if they are in-studio; they attract a fee of EUR 50 if they are "on location". In case of a no-show, the customer may re-schedule the booking to a later day but the no-show fee for on-location shootings is charged to the customer in any case. If a customer does not order any picture after a shooting session, the customer is invoicing a photo shooting fee of EUR 100 for in-studio sessions (EUR 150 for on-location one). Stakeholder analysis Customer viewpoint. In 2014, customer satisfaction stands at 80% (declining from 85% in 2013) and net promoter score at 70% (declining from 80% in 2013). Common customer complaints exist in regards to: (i) turnaround times between the photo shooting session and the availability of pictures for review, as well as the turnaround times for delivery of digital copies and printouts; (ii) turnaround times for resolving customer complaints particularly with regards to perceived defects in the delivered digital and printed copies; (iii) mishandled or “forgotten” orders or special requests. Customers often make changes to their orders or additional special requests via phone or e-mail and these changes/requests are sometimes not recorded (or recorded incorrectly) in the order management system. Changes to orders are currently handled manually. taff viewpoint. Staff satisfaction with the current process is low. Over 60% of customer service staff consider that their job is stressful. The staff turnover rate overall is at an all-times high: 20% of staff involved in the process as of 1 January 2014 had resigned by 31 December 2014, up from 10% the year before, with more than 80% of the resignations coming from customer service staff and the remaining from photographers and technicians. The average Cost-To-Company (CTC) of a photographer at a Fotof studio is 41K per year (35K for technicians and 37K for customer service staff). The CTC at Fotof is generally in line with industry averages. The company additionally employs 20 staff at the company headquarters at an average CTC of 46K. Interviews with staff have highlighted the following issues in the process: - Customer service staff perceive that appointment management is too timeconsuming. Customers sometimes call or e-mail multiple times to find a suitable appointment time. Customers also call frequently to change their appointments for shooting sessions or to cancel their session. About 1% of corporate orders result in a cancellation prior to the shooting, while 5% of private orders are cancelled prior to the shooting. - The late-show and no-show rates for appointments are high: 10% late-shows for in-studio sessions, 2% for on-location sessions, 3% of no-shows for onstudio sessions, and 1% for on-location. - There are numerous customer enquiries via phone and e-mail (on average 3 per order, in addition to booking-related calls or e-mails), be it to enquire about the status of orders or deliveries, to make changes to the order, to discuss special requests, pricing questions, as well as to report complains with received pictures. Management viewpoint. The company strategy of Fotof for the years 2015-2018 is focused on revenue growth. The company seeks to achieve a revenue increase of 50% by end of 2018 organically, meaning via growth of the the existing business, without company acquisitions and without opening additional retail outlets. To achieve this goal, Fotof's management is receptive to ideas to improve customer service and to expand the range of added-value services, such as offering "slideshows" to customers of personal events, creating customized artistic galleries, allowing customers to easily order reprints of photos, etc. Fotof's management perceives that additional revenue could come in great part from wedding photos, parties and ceremonies. At present only the customer who initiates the booking can place orders. But in the case of personal events and if the customer consents, there is an opportunity to sell to other event participants. Fotof's management also perceives that faster cycle times could also help to enhance sales. Sending more frequent reminders to customers to place their order, or re-organizing work to reduce cycle time are options that could be considered. Tasks. · Identify and analyze issues in this process, covering each of the three stakeholder perspectives. · Identify improvement opportunities to address the identified issues ­ use the principles of BPR.