Sound Processes Resonate With Music Maker
Peak Process Consulting
Recorded music has come a long
way since the days of vinyl and eight tracks. Although impressive
in their time, these media are primitive when compared to
today’s digital formats. Technological progression
is continuing at a breakneck pace in the field, even as
people listen to MP3s on their iPods and notebooks. Therefore,
music-focused businesses must constantly update and refine
their processes to keep pace with the competition.
E-MU, an electronic musical instrument manufacturer, sought
to redefine its business processes, cut costs and achieve
greater customer satisfaction. It turned to Peak Process
Inc. to facilitate a pilot project in optimizing its material
returns process using collaborative solutions.
E-MU has enjoyed a 30-year history as a leading provider
of electronic music instruments. Boasting its own design
and manufacturing facility, it provides affordable music
emulators for the global market.
In an effort to align the project with E-MU’s business
objectives, Peak Process recommended a meeting of key stakeholders
to determine the company’s ultimate goals and needs.
The meeting was convened to complete Peak Processes’
“Vision Match,” a tool designed to document
the goals, needs, issues and requirements for each project.
E-MU designated primary goals of improving customer satisfaction
and reducing expenses.
Following a strategy session to prioritize the business
processes that had the highest relative negative affect,
the company focused on material returns--labeled XRAs to
indicate multiple types of returns--as the most painful
for E-MU and its customers.
E-MU’s return process was cumbersome and extended.
When a customer or dealer had a problem with a product,
a return authorization was requested from company headquarters.
The request was typically routed through a sales representative
and was often delayed due to scheduling; missed phone calls;
and misinformation at the customer site about part, serial
and model numbers, as well as warranty information. Many
other returns came through a sales incentive program called
“Power Player,” in which dealers could return
unsold products within a year of buying them if they purchased
a corresponding amount of new products. This often resulted
in the return of hundreds of units at once, some of which
weren’t covered under the program. The result was
chaos at the receiving dock with inventory reconciliation,
scrap issues and significant delays in material repair and
handling processes.
After implementing the Vision Match template to assess
E-MU’s needs and goals, the Peak Process team conducted
in-depth interviews with cross-functional employees to determine
the company’s current XRA processes. Peak Process
then used its automated flowcharting tools to map the processes,
document the results and present the information to XRA
team members. The resulting illustration was a complicated
jumble of overlapping processes and information paths.
With a clear picture of the problem, E-MU and Peak Process
set out to rectify the situation. E-MU documented its business
rules, finding cases that lacked consistent rules for the
business processes in question. The team identified processes
appropriate for automation, such as routine handling, RMA
number assignment, reason codes, information screens available
from a central database and downloads from the corporate
ERP system.
Brainstorming sessions spawned an assortment of new methods
to combat inefficiency, including:
The addition of user-requested fields to the database
Bar-coding and reading serial numbers at shipping for greater
accuracy
Automatically generated XRA numbers by the XRA system
A new business rule that Power Player restocking fees are
withheld from rebate checks
After using the new processes for only three months, the
company identified more than $80,000 in annual savings,
which didn’t include many of the potential savings
in areas slated for analysis. E-MU virtually eliminated
inventory write-offs due to returned material reconciliation
issues, reduced credit memo issuance time from two days
to less than one hour, and reduced the time required to
issue reduction-of-credit memos from days to minutes. The
company’s future plans include providing customer
self-service for returns, affording customers instant information
access.
“Peak Process was extremely effective in helping
us improve our product returns management processes,”
says Fred Thompson, vice president of operations at E-MU.
“Their approach enabled our personnel to actively
participate throughout the process, ensuring that we preserved
the effective elements of our existing processes while incorporating
industry-best practices to reduce cycle time and increase
profitability.”
Peak Process Consulting
- Comprehensive process analysis
- On-site assessments
- Proprietary flowcharting tools and methods
www.peak-process.com
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