Applying Office Lean Principles to Empower a Department's Performance on a Luxury Ecommerce Company

Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company Rafael Cardoso Ferreira do Amaral Figueiredo Dissertação de Mestrado Orientador na FEUP: Prof. José António Rodrigues Pereira de Faria Orientador na Farfetch: Eng Sara Guerreiro 2016-07-01 Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company ii Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company iii Resumo A farfetch é uma empresa de comércio de luxo online que tem vindo a crescer exponêncialmente desde a sua criação em 2008. Este facto contribui para dificuldades que respeitam ao ajustamento que a nova dimensão exige em termos de operaçãos de back office. O grande volume de trabalho que o sucesso da empresa trouxe para os departaments, assim como dores de crescimento que advêm da falta de procedimentos que acomodem a nova dimensão, contribuem para perdas de efficiência dos colaboradores. Este projecto estuda, analisa e implementa soluções dentro do departamento de delivery, responsável por tratar das situações que envolvam transporte de encomendas e é por isso uma equipa crucial para a entrega de um serviço de qualidade ao cliente final. Após um estudo minucioso dos métodos de trabalho da equipa, assim como dos seus processos, esta tese de mestrado explica tanto as oportunidades de melhoria encontradas nesse estudo, como as duas soluções escolhidas para aproveitar essas oportunidades e convertê-las em ganhos de performance. Estes ganhos advêm de medições quantitativas que reflectem os tempos de trabalho da equipa e também de medições qualitativas que medem a assetividade e consistência do trabalho do departamento. Enquanto uma das soluções foca o melhoramento da comunicação e as suas práticas correctas, a outra baseia-me na reengenharia e standardização do processo de retorno a origem, uma tarefa que tem um grande impacto no trabalho da equipa e que afecta directamente a qualidade do serviço prestado. Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company iv Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company Abstract Farfetch is a luxury e-commerce company that has seen its size grow exponentially since it’s existence. This contributes for some difficulties to adjust to the new size demands in terms of back office operations. The high volume of work that the success of the company brought to the departments inside farfetch, as well as growing pains that come from lack of procedures that accommodate its growth, contribute for lost of potencial efficency of the company’s employeers. This project studies, analyses and implements solutions insides the delivery team, a back office department that is responsible for dealing with transportation related issues, and so it’s a crucial department to delivery the expected service quality to the end customer. After a closer study to the teams working methods and processes, this master thesis explains both the improvement opportunities that were considered relevant in order to improve the delivery teams efficiency, and it proposes two solutions to use those opportunities and transform them into performance gains. These gains come from both quantitive measures that address the team’s timing targets, but also some qualitative indicators, that will reflect the assertiveness and consistency of the team’s work outcome. While one solution focus on the communication improvement, targeting implementing best practices, and reduce work variability, the other one is based on reengineering and standardizing the return to origin process, a task that has a big impact on the team’s performance, and that represents one crucial point in terms of delivering a quality service to the customer. Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company v Agradecimentos Para agradecer a todos os envolvidos neste tese de mestrado, seria necessário algo mais do que apenas uma página, e portanto isto é apenas uma pequena representação desses agradecimentos. Em primeiro lugar queria agradecer à empresa, Farfetch, como um todo. Foi uma surpresa positiva desde o primeiro ao último dia, e o ambiente fantástico que se vive lá dentro contribuiu de forma grande para a minha motivação no desenvolvimento deste projecto. Um foco especial para os meus orientadores Sara Guerreiro e André Martins, pela sua abertura e acompanhamento. Um agradecimento especial também à Susana Pereira, pela dedicação e disponibilidade constante e também pelo seu espirito positivo diário. Queria também agradecer a todos os docentes da Faculdade de Engenharia da Universidade do Porto que contribuíram para o desenvolvimento académico da minha pessoa, e especificamente ao Professor José Faria pela pertinência dos seus inputs e pela sua disponibilidade. Finalmente queria agradecer a todas as pessoas que contribuem para o desenvolvimento diário da minha pessoa, uma vez que sem elas não estaria onde estou. Um grande obrigado á minha família e amigos por estarem lá sempre, especialmente naqueles momentos em que não sou uma companhia agradável de aturar. Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company vi Table of Contents 1 Introduction............................................................................................................................. 1 1.1 Farfetch Portugal ...................................................................................................................................... 1 1.2 Farfetch Structure .................................................................................................................................... 1 1.3 Farfetch Business Model Canvas ............................................................................................................. 2 1.4 Delivery Team .......................................................................................................................................... 3 1.5 Problem Description ................................................................................................................................. 3 1.6 Methodology ............................................................................................................................................ 4 2 Literature Review ................................................................................................................... 5 2.1 Luxury Ecommerce .................................................................................................................................. 5 2.2 Office Lean ............................................................................................................................................... 6 2.3 Process Reengineering ............................................................................................................................ 7 2.4 Measuring Process Performance ............................................................................................................. 8 3 Delivery Team ...................................................................................................................... 10 3.1 Overview ................................................................................................................................................ 10 3.2 Team’s Structure .................................................................................................................................... 10 3.3 Core Activities ........................................................................................................................................ 11 3.3.1 Order Process .............................................................................................................................. 11 3.3.2 Return Process ............................................................................................................................ 12 3.3.3 Slots ............................................................................................................................................. 13 3.3.4 Other Activities ............................................................................................................................. 13 3.4Working Methods .................................................................................................................................... 13 3.5Team’s Pains .......................................................................................................................................... 16 3.5.1 Tickets and Backlog ..................................................................................................................... 16 3.5.2 Growth Consequences ................................................................................................................ 17 3.6Improvement Opportunities ..................................................................................................................... 18 3.6.1 Communication Improvement ...................................................................................................... 18 3.6.2 RTO – Process Reengineering and Standardization ................................................................... 20 4 Solutions ............................................................................................................................... 23 4.1 Communication Improvement ................................................................................................................ 23 4.1.1 Scope .......................................................................................................................................... 23 4.1.2 Action Plan................................................................................................................................... 24 4.1.3 Requirements Gathering .............................................................................................................. 24 4.1.4 Configuration ............................................................................................................................... 28 4.1.5 Pilot Project.................................................................................................................................. 29 4.1.6 Roll Out ........................................................................................................................................ 30 4.2 RTO ....................................................................................................................................................... 30 4.2.1 Reengineering ............................................................................................................................. 31 4.2.2 Standardization ............................................................................................................................ 32 5 Conclusions and Results .................................................................................................... 36 5.1 Communiation Improvement .................................................................................................................. 36 5.2 RTO – Process Reengineering and Standardization .............................................................................. 37 6 Future Work .......................................................................................................................... 39 6.1 Developed projects ................................................................................................................................ 39 6.2 Ticket Handling System ......................................................................................................................... 39 Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company vii Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company viii Index of Tables Table 1 – Delivery Team’s Zendesk views and categories .............................................. 14 Table 2 – Communicaton Problem-Solution ................................................................... 25 Table 3 – Communication Project - Pilot’s results ......................................................... 30 Table 4 – Communication Project – Final results ............................................................ 36 Table 5 – RTO Project – Final Results ............................................................................ 37 Table 6 – Evolution of % of Created Returns .................................................................. 38 Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company ix Index of Figures Figure 1 – Farfetch’s Business Model Canvas................................................................... 2 Figure 2 – Business Representation ................................................................................. 10 Figure 3 – Delivery Team’s Structure.............................................................................. 11 Figure 4 – Order Process .................................................................................................. 11 Figure 5 – Return Process ................................................................................................ 12 Figure 6 – Zendesk’s Ticket Pool .................................................................................... 14 Figure 7 – Zendesk’s New Ticket Window ..................................................................... 15 Figure 8 – Zendesk’s Use Case ........................................................................................ 15 Figure 9 – Delivery Team’s Backlog by Category on April 31st .................................... 16 Figure 10 – Business Volume Growth ............................................................................. 17 Figure 11 – Damaged Parcel Process Map ...................................................................... 18 Figure 12 – Damaged Parcel Use Case ............................................................................ 19 Figure 13 – RTO Process Map (Delivery Team Perspective) ......................................... 21 Figure 14 - RTO Process Map (Order Support Perspective) ........................................... 22 Figure 15 – Communication Project’s Action Plan ........................................................ 24 Figure 16 – Ticket Handling Guidelines .......................................................................... 25 Figure 17 – Applying a Macro to a Ticket ....................................................................... 26 Figure 18 – Zendesk’s New Ticket Window (updated) ................................................... 27 Figure 19 – Identifying Macros Process Map .................................................................. 27 Figure 20 - Zendesk’s New Ticket Window (Final Version) .......................................... 28 Figure 21 – Macros’ Structure ......................................................................................... 29 Figure 22 – Section of RTO To-Be Process Map ............................................................ 31 Figure 23 – Creating a Return – Decision Tree ............................................................... 33 Figure 24 - Creating a Returns Process Map ................................................................... 33 Figure 25 – Creating a Return – Older Method ............................................................... 34 Figure 26 – Creating a Return – Newer Method .............................................................. 34 Figure 27 – Creating a Return – Solution ........................................................................ 35 Figure 28 – Creating a Return Process Map To-Be ......................................................... 35 Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 6 details, and that its objective is clearly written to put the consumer’s mind at ease (Wu, Chen and Chaney, 2013). The same authors have also stated, although customers usually are unaware of details, if you pay attention to them while developing and updating your website, that will ensure your credibility next to them. Another crucial point for e-commerce luxury companies to secure their branding perception is through a well made design of their outbound logistics. This consisting of the delivery process of the end product to the customer. In order to create this, companies should pay attention to processes that guarantee the right product, right amount, right size, the condition of the delivery, and lead-time to the customer. Having all of these concepts finalized correctly to assure they are as close to perfection as possible in order to make the customer's trust owned by the company. “Perfection is not attainable, but if we chase perfection we can catch excellence.” – Vince Lombardi To sum up, in order to guarantee customer trust in a luxury e-commerce environment, companies need to observe all possible details as they lose the power to marketing their status throughout their physical existence as a market place. For that, a continuous improvement and critical position needs to be adopted by the employees to obtain the best outcome possible in terms of customer experience and service providing. This is important to understand the methodology used in this thesis, that seeks to increase the service quality of the back-office operations to deliver a premium quality service. 2.2 Office Lean A methodology that has been used for a long time to achieve efficiency, reduce waste and focus on value adding work is Lean thinking. Quoting from Kagioglou and Sapountzis (2007), Lean thinking begins with driving out waste so that all work adds value and serves the customer’s needs. Identifying value-added and non-value-added steps in every process is the beginning of the journey towards lean operations that were born in Japan, more specifically in the automobile industry. Given its effectiveness, it spread all over the world reaching every type of manufacturing industry and its benefits where acknowledged in such a way that in order to obtain those same benefits, it has more recently been adopted by office-based functional areas, such as research and development and customer service (Chen and Cox, 2012). As mentioned, Lean thinking's main focus is the reduction of waste, in order to focus on the value adding processes. The idea being to take as much advantages as possible from them and eliminate the ones that are time consuming and add little to no value. To do this, companies need to identify their main waste sources to then evaluate and reengineer their processes in obtaining a more efficient workflow. According to Ohno (1978), there are seven types of waste in manufacturing: transportation, inventory, waiting, defects, over-processing, excessive motion, and over-production. While talking about office lean, to identify these different types of waste is considerably more challenging as we are dealing with a much more volatile environment. Processes are much less standardized and much more humanized, and the concepts of inventory, production and defect aren’t easily defined. In fact, taking an example given by Chen and Cox (2012), in an office environment, most of the tasks are translated via email or fax, causing more variation in time consumption, and correct arrival and departure times are difficult to determine. Also supporting this point, Bowen and Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 7 Youngdahl (1998), add that while mass manufacturing operates from a technocratic perspective focused on goals and tools, office based activities focus more on personal attendance of others. This makes office tasks’ upgrades dependent on the improvement of skills and attitude of service performers. The challenge of applying this vision into an office and service reality is to pick up its subjective environment and be able to extract concrete information about its processes, in order to understand where improvements can be achieved. Many authors support that the causes of variability and inconsistency behind the work performed in the offices of a company come from the company’s own reality. Picking up from Locher (2008), many companies have a functional structure designed in such a limitative way that it causes employees to have a very light relationship with the information they produce/process. This makes it hard for people to have a focused mindset on continuous improvement of the overall processes that guarantee efficient results for the company. Instead of having people responsible for specific functions only, lean thinking suggests they should work more towards a cross-functional approach, opening new possibilities for maintaining the quality of the information flow. This brings us to the importance of work standardization. In order for employees to work towards a process optimization perspective, it is mandatory for them to be trained in the same way to obtain the desirable output. Standardized work is a foundation of lean thinking. Therefore, an initial focus of a lean effort is to implement true standard work practices throughout a business process, (Locher, 2007). Whether it's to train new employees, or to make sure that the existing ones work within the best practices, both process mapping and reengineering are fundamental areas for a company seeking to introduce the practices of lean inside its offices. These tools are going to be crucial to standardize the working methods of people and they will contribute to the foundation of the company’s continuous improvement mindset, (Locher 2008). Kagliogou and Sapountzis (2007) state that in order for lean principles to succeed, leaders must first work to create an organizational culture that is receptive to lean thinking. Starting from the top and spreading the values through the company to create a culture of continuous improvement, leading to the process redesign to improve flow and reduce waste; always with the target set on developing the overall system. For this project to be possible, it was guaranteed that the mindset lived inside the operations of Farfetch was open to adopt this procedures, and so process mapping is a vivid necessity that exists inside the minds of the employees, which makes it possible to apply office lean principles by having the help of the people inside the company. 2.3 Business Process Modeling and Reengineering Business process modeling and reengineering is a methodology different than existing improvement schemes. These schemes generally fail to go beyond the functional boundaries which exist in organizations structured along traditional lines. In BPM, a business process is seen as a horizontal flow of activities while most organizations are formed into vertical functional groupings, sometimes being referred to in the literature as “functional silos” (Childe, Maull and Bennet, 1994). This type of approach will help companies to overcome some of the problems of implementing Lean in an Office that were stated before. Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 8 As quoted by Heinrich and Henneberger (2007), process models are widely used in practice. The analysis and the reorganization of processes are essential prerequisites to improve the efficiency of operational procedures. In fact, business process modeling has been propelled by the claims of these companies to have achieved up to 80 percent savings on time and costs by restructuring business processes and organizations (Tinnila, 1995). This then confirms even more the previously taken conclusions that in order to successfully adopt a mindset to drive a company through a continuous improvement path, one needs to understand, standardize, and reengineer the processes composing the reality of the workflow. According to Childe, Maull and Bennett (1993), The movement towards lean production cannot be made without understanding how processes operate. In the absence of such an understanding, no attempt can be made to identify added value. Despite its high capacity to empower the efficiency of the work tasks inside the company, business process modeling sometimes can be overdetailed leading to confusing and misleading interpretations. One big challenge while working with this methodology relies on finding the correct balance of detail, in order to not produce complex and confusing maps, that might make them seen as a monopolized area by specialists. The goal when mapping and reengineering processes is in fact to serve as a communication and training tool for all people involved, (Becker, Rosemann and Uthmann, 2000). On the other hand, while mapping a process it is fundamental to remember that in order to obtain a well-designed and useful outcome, one must acknowledge the importance of criteria related to the organization itself, as well as economical, and aspects related to the overall IT infrastructure of the enterprise, (Aalst, Hofstede and Weske, 2003). Engineers need to understand that both complex and overly simple processes, lead to poor outcomes and to have negative implications. To avoid such situations, it is essential to agree on the level of detail. Rosemann (2006 pitfalls B) purposes two different paths about this matter: either to focus on the 80 percent case, or stop modeling activities involving just a single organizational unit. Another topic that is pointed out by many authors is the necessity to measure the performance of business processes, and to find correct ways to do it. After all, performance measures are the vital signs of the organization which quantify how well the organization achieves a specific goal (Seokjin and Behnam, 2008). So if we consider an organizational goal as being the efficiency of its processes, companies need to find a way to estimate that efficiency in order to understand how well their efforts are doing, as well as to define future work to address the lower points of that evaluation. What is known is that if the problems associated with Business Process Mapping and Reengineering are overcame, and modelers find the correct methodology to apply this tool in their workplaces, it will provide companies with a powerful asset to guarantee the quality of their workflow, as well as drive employees to work within their best practices always having in mind the focus on value adding activities. Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 9 2.4 Monitoring and measuring processes performance throughout the use of Key Performance Indicators (KPI’s) Key performance indicators are a valuable tool for measuring the health of the companies’ business, or a portion of it. Like Ganesan and Paturi (2009) have stated, KPI’s are a quantitative, periodic measurement of one or more processes, chosen from all of the possible metrics within a business, in such a manner as gather the most amount of information in a single indicator (“key” indicator). Its usefulness comes from the important conclusions that can be taken from an individual quota. KPI’s conclusions can be addressed to evaluate past process performance, as well as to identify present issues and/or to set goals for future work. These conclusions are also important channels for companies to communicate strategy to everyone and to make them commit to it as well as to drive them to pursuit goals. In fact, measuring and monitoring strategy throughout competent performance indicators will result in process improvement and consequently to organizational effectiveness, (Ganesan and Paturi 2009). In order for these indicators to be as useful as possible when being used to measure process performance, they should be thought through on the modeling/reengineering phase, so they can address the process reality, and work as a monitoring and evaluation tool at process execution time. This will also allow a more proactive reaction to events that might need intervention, (Wetzstein, Ma and Leymann, 2008). Without the incorporation of KPI’s on process modeling, one cannot optimize the business processes intelligently nor its response to strategic events to create an eventual valid process reengineering, (Pan and Wei, 2012). To conclude this section, it is presented that the KPI lifecycle defended by Ganesas and Paturi (2009), is comprised by four phases. First, identify what to measure that is relevant to the company and its processes. Secondly, define characteristics involving these measurements. Thirdly, associate the identified KPI’s with the different processes and stakeholder that might be involved. The fourth and final phase, track and monitor the results for a period of time and if necessary, repeat the cycle in order to make adjustments that refine the outcome of the desired standards. "Measurement is the first step that leads to control and eventually to improvement. If you can't measure something, you can't understand it. If you can't understand it, you can't control it. If you can't control it, you can't improve it." - H. James Harrington Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 10 3 Delivery team In this chapter it is presented the diagnose made inside the delivery team. The team’s daily tasks are explained, as well as the pains that are behind the performance gap and the improvement opportunities that were found, having origins in those pains. 3.1 Overview The delivery team works as a bridge between Farfetch and courier services. It is called to take action on issues that involve delivery services on a bilateral relationship where both other Farfetch’s departments and transportation companies require the team’s action when needed. This relationship is presented on the following diagram: Figure 2 – Business Representation Figure 2shows interactions between the outside stakeholders with the internal ones. While grey arrows represent interactions with the system (typical from normal procedures involving order processing) the black arrows represent situations where issues require internal departments to take action. While all internal departments communicate with each other, external stakeholders’ communications are assigned to different departments: Customer contacts CS, Boutiques contact PS, and Courier services contact Delivery (highlighted in blue). The Delivery team is therefore the bridge between Farfetch and transportation companies. Deeper analyses on the team’s role are developed further on. SYSTEM CS OS PS Delivery Customer Carrier Boutique Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 11 3.2 Structure The team’s structure is divided into three sections, spread throughout three cities (Porto, Los Angeles and Tokyo) in order to make its services available for all time zones. This is necessary due to the fact that the team’s responsibilities are non-stop, as delivery/transportation issues keep happening all over the world, and there’s a need to have the department online in order to solve them. 3.3 Core Activities 3.3.1 Order processing As stated before, the team’s responsibilities involve all the transportation/courier related issues. This includes a vast number of tasks and processes. The following scheme represents the order processing flow Supervisor + 9 Agents 3 Agents + 1 supervisor 1 Agent Figure 3 – Delivery team’s structure 1 & 2 3 & 4 5 & 6 7 Figure 4 – Order Process Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 12 The following explanation of the order processing flow, will help to understand better the types of situations that represent the daily work of the team: 1.Check Stock the boutique checks the availability of the product once the order is placed. 2.Approve Payment Payment’s legitimacy is analyzed, the order will only be accepted if the customer is concluded to be trustworthy; Delivery might be called to contact carriers in order to investigate a customer. 3.DecidePackaging the boutique decides the type of packaging according to the item(s) dimensions and prints the documentation related to customs that might be needed to include in the order. 4.CreateShippingLabel system automatically generates shipping documents. The order might get stuck in this step and Delivery needs to take action either to generate AWB’s that due to some type of errors didn’t get generated automatically or because order has some restrictions (import restrictions to some countries). 5.SendParcel the boutique prints the AWB, attaches it to the order, and the package is sent to customer’s address. If the carrier’s scanning misses, it’s Delivery’s duty to contact carrier to update the system. 6.Parcelintransitthe path of the order since it leaves the store until it reaches customer’s hands. Delivery proactively checks tracking status and also responds to requests coming from other departments to act on certain issues (Customs Holding, Missing orders, RTO’s, Redirections.) 7.OrderReceived Customer receives the order and this concludes the process, but if the customer isn’t satisfied delivery might have to take action either to investigate eventual damaged during transit. 3.3.2 Return Process The team also acts in the return process: 1.Book ReturnCustomer creates and books return on the system. 2.Return in TransitReturn is in transit to boutique, Delivery might be call to act in the same modules as when the order is in transit. 1 2 3 4 Figure 5 – Refund Process Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 13 3.Verify Return Boutique verifies return. If it’s accepted customer gets refunded. If its rejected customer (for example package may arrived with damage, to the wrong boutiques or it was returned without using Farfetch’s website to book and create the return resulting on unidentified returns and deliveries to boutiques involving charges)the delivery team is called to investigate the situation in order to evaluate if customer should be refunded or not. 4.Validate Refund According to the verification of the return, the customer’s refund is accepted or not, Delivery team might help in this validation. 3.3.3 Slots Slots are collections sent by boutiques to Farfetch’s headquarters to be photographed in order to create content for the website. These slots are then sent back to the boutiques after photographed. These are packages that are transported with very tight timings, and that involve big values. The delivery team acts in order to created documentation that might be needed to include in the transportation of the slots, as well as in any issue that might happen during the transportation. 3.3.4 Other Activities There are other processes that the team might have work related to. These processes include more specific situations, for example when a customer wants to send an item to repair, or when some countries need specific documentation to include with the order and the team proactively generates that documentation to send to the boutiques before the order gets sent. 3.4 Working methods Communication is the center of all work done by the team. Being an issue solving department that deals with the interactions between Farfetch and carriers, communication has a determine role on the teams daily job. Communication is made using Skype, when it involves informal nature, Outlook for general communications, and Zendesk for issue handling tasks, being the most important and used method of communication. Zendesk is a ticketing tool that helps process requests from both external and internal agents. It is also the center tool of communication for other Farfetch departments that work within a ticket solving nature. In the Delivery team, tickets enter and are categorized accordingly to the type of issues that they refer to, and wait in their respective pools for agents to pick them up and assign them to themselves. For internal tickets this categorization is made by the teams that send the tickets to the delivery team, for external communication this categorization is made by the agent who picks up the ticket first. Each Agent is assigned to a specific view that contains one or more categories in order to have a more organized work method. Table 1 represents the views and categories for tickets that enter Delivery’s account. The categorization of tickets will make them to be divided throughout the different views. This will help Agents to work in separate visions and have an organized workflow. Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 14 Table 1– Delivery team’s zendesk views and categories Zendesk’s View Categories Sub Categories RTO’s RTO’s Global Address Changes/Redirections Address Changes/Redirections Global Duties Being Charged Delivery Issues Duties Being Charged Delivery/Customs/Claims Delivery/Clearance issues ; Claims China Customs; EEI; FDA; Fish and Wildlife; High Valued Items; Mexico Import License; Proof payment; Docs Missing; Jewelry; Homeware; Beauty Missing/Delayed scans; Customer unreachable; Wrong Address; Shipment refused; Duties being charged; Damaged/missing Items; Wrong Item; Claims Returns via UK/Lost and Found Returns Via UK Queries; Lost & Found Queries Global Pick-up issues Pick-Up Issues Customer; Pick-up Issues Store; Exception Global Billing Billing Queries Global Editorials/Pack/Slots /Supplies Supplies requests; Pick-up requests Global Labels/JP post Labels/Invoices Global Boutique set up Account set up Global Zendesk’s overview can be seen in the following two pictures. The first one represents the pool of tickets with the one of the views selected. The second represents the window for creating a new ticket. Figure 6 – Zendesk’s Ticket Pool Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 15 Figure7 –Zendesk’s New Ticket Window To represent the usability of Zendesk it’s presented its use case: An agent can pick up a ticket from the pool in order to assign the ticket to himself, create a new parent ticket to start a new issue to be solved, create a child ticket, to send a new ticket associated with a parent ticket, categorize the ticket according to the category it is related to, share a ticket with one or more internal departments, and send the ticket to an external entity. Every time a ticket is picked up by an agent he/she becomes the assigned agent and every time an agent creates a new ticket he/she becomes the requester of the ticket. Tickets are also qualified with different status: the “new” status represents a previously unassigned ticket waiting to be picked up, "open” means that the request has been assigned to an agent who is working to resolve it. “Pending” means that the assigned agent has a followup question for the requester. “On-hold” means that the support request is awaiting a resolution from a third party (an entity that doesn’t have a Zendesk account) and solved means that the agent has resolved the support issue. Until a ticket is closed by the requester he/she can reopen the ticket. For example, the requester may not agree with the agent that the Zendesk Create Parent Ticket Create Child Ticket Pick-up ticket from pool Categorize ticket Share Ticket internally Send ticket to external entity Agent Figure 8 – Zendesk’s Use Case Parent ticket Ticket that first originated issue on the team’s side. Child Ticket  Ticket that is created based on a parent ticket. Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 22 Figure 14 – RTO Process Map(Order Support Perspective) Customer service as well as Partner service might also place RTO requests and both those teams are also not consistent to whom they ask for the return to be created. In fact, customer service has its Back Office section that has capability and responsibility of taking care of some problems related to delivery (RTO included) and this procedure isn’t being adopted by customer service. The identified problems (in red) are:  The required documentation (RTO letter, LOA, Invoice) is not standardized, and different versions are spread throughout the agents, many times not being the correct ones causing agents to lose time;  While monitoring the RTO, the ticket stays open contributing for unnecessary backlog as many times it does not need extra documentation and so the Delivery team’s action ends when RTO is confirmed;  CS Back Office is capable of performing the RTO requests that come from CS, but many of those requests still are made to the Delivery team.  The process to create the return on the system is not correctly defined, making teams to be creating it without knowing if the other team has already done it. Both teams receive requests to do it causing confusion, and wasting time;  The process to create the return is also ambiguous in terms of the system design and needs to be improved; What will be implemented is a proposal of improvement to the process that will solve the stated problems throughout the appliance of modifications including: standardization of some tasks and documentation, elimination of unnecessary steps and changing some responsibilities. Further developments of this matter will be developed on chapter 4. O S P S D L V Detect Fraud and flag customer Order until step 5? Send ticket to Ps to contact store Order still in store? Ask to stop order and inform OS Cancel order on the system Send ticket to DLV asking for RTO Inform OS RTO Succeed ? Inform OS Send AWB to OS Request refund to customer and create return on system YES NO NO NO YES YES Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 23 4 Solutions In this section there are presented the solutions chosen to solve the problems identified on chapter 3. The goal is to use the studied improvement opportunities to introduce value adding modifications to the team’s working method, in order to fill in the gaps created by the pains found inside the delivery team. 4.1 Communication Improvement As identified in chapter 3, internal communication is a matter in need of attention in the company as a whole, and therefore in the delivery department. What is explored in this section is a way of guaranteeing that the information flow is optimized, and that the identified flaws regarding communication are overcome, with the purpose of improving the team’s performance, both in qualitative and quantitative parameters. This gains an even bigger importance when we’re talking about a working unit that comprises people from different countries from different time zones and some differences regarding their working methods. Like it was shown on a typical and simple process that represents one of many that the team deals with on a daily basis (figure 11), there are some flaws in terms of communication that this project seeks to reduce and possibly eliminate. A lack of efficient communications costs organizations, representing a net drain on time, money and effectiveness. Gaps in internal communications also cause companies to miss opportunities and to disconnect messages to stakeholders and audiences. 4.1.1 Scope The need for this project comes from the whole purpose of this master’s thesis that is improving the overall performance of the team. By targeting the problems existing in the team’s communication environment what is desired is to obtain an optimum level of efficiency, and to reduce wasteful forms of communication that happen in the company. Taking from the conclusions of the literature review, a luxury market environment deals with demand for perfection, and so seeking flawless procedures is a goal that should be buit-in the employees’ motto. This should reflect a search for office lean that seeks optimization and reduce of waste. As it was stated before, after analyzing the processes and the working methods of the team, communication issues were found that were compromising the team’s performance given space for improvements to be developed. To solve these problems, this project involved a research onsite in order to propose a communication solution applied to Zendesk that would optimize the team’s workflow, as well as facilitated their work, and the work of teams that work alongside with Delivery. This improvement will be later analyzed. The KPI’s chosen to evaluate the success of this project were:  Average full resolution time average time spent since a ticket enters the pool for the first time until it’s closed;  Average handling time average time that a delivery agent is with the ticket opened; Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 24  Average number of reopens average number of times a ticket that was solved was reopened;  Average interactions’ number average number of times a ticket switches from a team to another; While the first two KPI’s try to measure the agent’s performance, the last two intend to measure the quality of the ticket (complete information and assertiveness). Naturally there are relationships between the KPIs. If any of them is improved, there will be repercussions extensive to the others. 4.1.2 Action Plan To illustrate the timeline that this project was based on, it is presented an action plan that reflects both the phases and their goals according to the project’s needs: Figure 15 –Communication’s project action plan As it can be seen on figure 15, the communication improvement project was divided into 4 main phases. The first refers to requirements gathering where the main issues where studied, and the first solutions where define and developed. Secondly, the configuration of the solutions was made. This includes structuring the solutions and configuring Zendesk to accommodate them. Thirdly the pilot took place, the pilot agents were selected and their work was followed proactively to improve the project and gather feedback. The pilot was analyzed so that finally the roll out to the whole team was possible with the gathered improvements. In this final phase the work was also observed in order to gather final improvements to finally evaluate the project’s results. 4.1.3 Requirements gathering Part of this section was already developed on chapter 3, when the problems where observed and identified, and the conclusions where three main problems: • Sharing of extra content with teams and/or multi-sharing; PILOT REQUIEREMENTS GATHERING March 13th Study issues Define solutions Understand the tool’s features CONFIGURATION April 11th Define solutions’ structure Insert data on Zendesk April 14th Presentation to pilot group Followup/Feedback (Skype group) Improvements implementation Data analysis Features configuration ROLL-OUT May 18th Presentation to the whole team Followup/Feedback Improvements implementation Data analysis - April 13th - April 10th - May 17th Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 25 • Messages sent with incomplete information; • Internal notes submitted after ticket is solved causing reopening; After close analyses to these problems, three solutions were found to help solve the issues stated before. Table 2 – Communication’s Problem-Solution Problem Solution Extra content sharing and multi-sharing Ticket Sharing Guidelines Incomplete information Macros Internal notes reopening tickets “My note” field Ticket Sharing Guidelines First, to fight unnecessary content sharing, the use of child tickets to communicate with different teams needs to be assured, as shown on use case represented on figure 8.The following picture represents the guidelines for ticket creations that assure that parallel conversations are not shared and that different conversations involving different teams and treated separately: Figure 16 – Ticket Handling Guideline. What this picture pretends to show is the flow of how tickets should be dealt with. If a ticket enters the team’s Zendesk, this could initiate three situations:  The ticket involves answering the same team that originally contacted Delivery, and for that the answer should be written in the same ticket;  The ticket involves sending a ticket to a different team that originally contact Delivery, and for that a child ticket should be created;  The ticket involves both answering the team that originally made the contact plus the sending another ticket for other department, and for this case the teams should answer the original ticket, and create a child ticket for the other department; Another case is if Delivery makes the original contact, and in that case if it involves sending a ticket to two or more teams, then different tickets should be used. These guidelines will solve the issues related to the first problem, and will make the sharing of information more optimized, so that communication assertiveness can be achieved. Parent Ticket Delivery Pool Answer receiver? Parent Ticket Same ticket Child ticket Same ticket Different team Same team Same &Different team Child ticket Child ticket Zendesk Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 26 Macros The second problem is related to information sharing being many times incomplete, causing tickets to have more interactions than they need, and incrementing time measures to performance indicators. The solution chosen to address this problem is a feature that Zendesk has, called macros. Macros are standardized texts that are selected while writing the ticket, that according to the issue will write the subject, body of the message and some fields, as well as select the receiver and the category, leaving the agent to only have to write some information that varies from every ticket. Figure 17 – Applying a macro on a ticket Figure 17 represents what the appliance of a macro to a ticket should allow. After selecting and applying the macro according to the issue, the ticket’s subject and message is automatically written, and the left side of the form is filled with the information needed. For this solution to be possible, a careful study involving both the Zendesk’s features and the team’s categories was made, in order to first, understand how the ticketing tool’s features could guarantee these functions and second, to understand which issues of each category can be standardized to be shaped into a macro. For the first point, after understanding the tool’s features, the ones that allow the desired features were: Macro tool  allows applying the macros to the ticket. Even though this feature was already available on Zendesk it was currently not being used by the delivery team; Auto-Categorize allows macros to automatically categorize the tickets according to predefinition; Select Receiver  allows macros to select receiver according to pre-definition; Placeholder it allows to automatically fill in the needed fields by retrieving data either from the parent ticket or from the custom fields the left side form. Most of the tickets that the Delivery Team deals with involve order number and AWB nº, if the team is creating a new parent ticket, the agent should fill in the form’s customs fields added to the left side with these numbers, and the macro will fill in the message body, whereas if it’s a new child ticket, the macro will retrieve these number automatically from the parent ticket, and fill in all spaces that contain this info. Subject Receiver Category Sub-Cat. AWB Nº Order nº Message body Opening greetings and issue explanation Info and/or attachments needed Closing greetings Apply Macro RTO request – Awb nº DHL RTO’s Global 5154554 OL5589 Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 27 Figure 18 – Zendesk’s New Ticket Window (updated) Figure 18 is a screen shot of the new solution to apply the macros. Two of the features from Zendesk that were applied are signed on the picture, the other features are built-in the macro itself. Once the program was ready to accommodate the solution regarding its features, the next step involved studying the issues dealt by the team. This means studying the different categories presented on table 1 and understanding the communications and tickets that are behind those categories in order identified which macros could be extracted from those tickets. Figure 19 – Identifying Macros Process Figure 19 represents the process followed to study and identify the possible macros. What was done was a study of every issue of each category dealt by Delivery, to understand if it is possible to standardize the message sent by the team in order to create a macro. If the message is possible to be standardized, than the message was noted down, alongside with the needed information, including identification numbers (order number and AWB number), needed attachments, to whom is the message sent and the logical subject. Macro Tool Custom fields to support the placeholders Select a commune issue dealt by delivery Is the issue’s text possible to standardize? Note down standardize text and info needed Are there any more issues to analyze? YES NO NO YES Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 28 The final result was a list with all of this information for the noted macros, in order to be possible to configure the software with the complete data that can be seen on Appendix A. My note Finally, to solve the reopening of tickets on other team’s caused by the submission of internal notes, it was added a field to the left side form called “My Note”. This allows agents to submit a note visible only for the submitting team, which will not cause the ticket to open after inserting it and therefore will stop incrementing unnecessary time measurements to ticket performance. Figure 20 – Zendesk’s New Ticket Window (final version) 4.1.4 Configuration This stage refers to the macro configuration in Zendesk. While the other two solutions involve easy configurations already done in the tool, configuring macros involves picking up all collected data regarding them and introduce it in Zendesk. This involves inserting every macro one by one in the tool according to the individual specifications (information needed, categorization, etc). Every macro that was obtained throughout the process represented in figure 19 was introduced in Zendesk with the information mentioned before, and the structure defined for the macros was to divide them by the destination of the ticket as it is shown on figure 21: My Note Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 29 Figure 21 – Macros’ structure Finally, to retrieve the information from the custom fields, the placeholders that were used were the following: Order Number {{ticket.ticket_field_24191375}} AWB Number  {{ticket.ticket_field_24150609}} These placeholders are small bits of code that retrieve information based on constraints and that are written in the places that this information should appear while configuring the macros. They will retrieve the information from the custom fields on the left side form (for parent tickets) or from the subject of a received message (for child tickets), and fill that information on the places that it’s supposed to appear, making the agent to save time by not having to insert it. The full list of added macros and what they are used for can be found in Appendix A. 4.1.5 Pilot The Pilot was a crucial stage of this project. In order to guarantee its success, the idea that this initiative would facilitate the agent’s work and save their time needed to be perceived by everyone in the team. Simply improving the team’s performance wouldn’t be enough of a message to make sure that the project would be adopted by the team, there’s the need of an extra incentive. For that, the idea of the pilot is not just for testing the project before the roll out for the whole team, but also to engage agents on the idea that their opinion matters, and so it was used to collect valued feedback. The agents are going to be the end users of the communication project and so to fit and shape it to their needs is crucial, not only for a better general success, but also to communicate the idea of their enrolment on its definition. Seven agents were selected to participate on the pilot for the duration of a month, five from Portugal and two from the US. A presentation was made with all the concepts and updates that were involved on the development of the project, as well as with the purpose of the transmitting the idea that this trial period would be used to collect information and feedback to improve it. •Macros to Customer Service CS •Macros to Partner Service PS •Macros to DHL DHL •Macros to UPS UPS •Macros to SANARA SANARA •Macros to Boutique BOUTIQUE •Macros to FEMA FEMA •Macros to TNT TNT •Macros to Editorials EDITORIALS •Macros to Pre-Alerts PRE-ALERTS Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 30 Table 3 – Communication Porject – Pilot’s Results KPI Before Pilot With Pilot Variation Average full resolution time (days) 5,0 3,7 -25,4% Average handling time (min) 12,6 5,8 -53,7% Average number of reopens 0,24 0,07 -69,3% Average number of comments 4,0 3,3 -18,1% The results involving the pilot where considerably satisfactory as it can be seen on table 3, and the tickets efficiency was improved as times got cut off, and it’s quality/effectiveness was also improved, proven by the indicators average number of reopens and average number of comments. Other satisfactory result was the number of macros added with the pilot, that can be seen during the pilot, that allowed the collection of 28 new ones. All the suggestions given were valid and were later included in Zendesk before the roll out was made to the whole team. 4.1.6 Roll-out After the project’s success was proven by the pilot analyses, and after configuring the suggestions and improvements that were collected from the feedback, the roll out for the team was made. This involved presenting the project to the teams in Portugal, USA and Tokyo requiring two separate presentations due to the different time zones. To keep proactively identifying possible improvements, data was analyzed regarding the tickets for which no macro was used, and for those tickets the possibility of standardization was studied. Also, to keep retrieving feedback, it was shared an online worksheet where agents could submit their suggestions. The final results that were obtained with this project can be found on chapter 5. 4.2 RTO - Process Standardization and Re-engineering As it was stated before, it’s important to look into the RTO process in order to solve the problems associated with it as it is the single process that contributes in a larger scale to the Delivery team’s backlog. But that’s not the only reason for that importance. The RTO process has implications that stretch to other teams and even to customers. If we look into unsuccessful RTO’s, they will result in fraudulent orders reaching the hands of the people responsible for the fraud, implicating charge backs to the company, and in wrong item’s sent by stores reaching customers’ houses implicating dissatisfaction and complains. It is therefore crucial to take a closer look to the problems identified on this process, and take action to solve them and improve its success. The problems mentioned on chapter 3 were: Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 31  Ticket stays open longer than necessary;  Lack of standardization in necessary documentation;  Incorrectly defined roles regarding creating manual return on the system;  CS Back Office should be in charge of RTO’s that are requested by CS Front Office; This solution will require actions of two types: reengineering and standardizing. 4.2.1 Reengineering Ticket Solving The action of solving the ticket should be done when the confirmation of the RTO is received from the carrier instead of when the package arrives to the origin. The monitoring of the package should be done with the ticket already solved, because most of the time no other interventions are needed, and it is only incrementing time to performance measurement indicators. Instead, what was implemented was that the agent should solve the ticket when he gets the confirmation of the RTO, and then fill in an excel file with information about it (reason, date, order, carrier and tracking number) and then there will be an agent responsible for monitoring the file and archiving the delivered RTOs. Only if extra action is needed should the agent create another ticket to solve the situation. Figure 22 – RTO Process Map - Section of To-BE Version Figure 22 represents the section of the TO-BE version that refers to the actions that the agent should do after receiving the RTO confirmation. Instead of monitoring the RTO and then solving the ticket, the agent should solve the ticket as soon as he/she has the confirmation from the carrier. Monitoring the process should be done with the ticket solved, and using the worksheet where the RTOs’ data is inserted. This worksheet was also reformulated in order to make it more organized so it can be used as a useful tool to manage the process. Before it had unnecessary information (example: RTOs already delivered to origin) and was missing other information. It allows now to insert the reason behind the RTO and it allows archiving the Archieve RTO on file Fill-in and send Docs Receive Confirmation from carrier Solve ticket and fill-in RTO sheet file Moniture RTO on worksheet Extra documents needed? Create return and inform requester NO YES Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 38 Another important aspect to be evaluated is the creation of manual returns on the system. What the modifications targeted was not only to make sure that these were properly created, but also that only three departments do them (accordingly to decision tree represented on figure 23). Table 6 – Evolution of % of Created Returns Department March April May CS BO 7,3% 4,2% 15,8% Delivery team 44,3% 50,0% 54,9% Order Support 48,5% 45,9% 29,3% Table 6 represents the percentage of manual returns created by the different departments, involving either RTO’s or situations that customers returned their orders without using Farfetch’s system. After the modifications that were introduced to this sub-process, what wanted to be achieve is that the requests for the creation of these types of returns, stopped being sent to the Order support team. They should only be done by Delivery or CS BO, as it was explain on chapter 4. As it can be observed on table 6, the modifications effects are noticeable, and the percentage of returns created by order support are decreasing. Before these changes were introduced, order support was responsible for about 49% of the created returns whereas in May, that number already represented about 29% of them. As other teams get more used to the new procedures, this number should continue to decrease until only the delivery team and CS BO are the only ones responsible for the creation of these returns. The RTO process reengineering and standardization was successful in its targets and goals, and it showed that a problematic process can be improved by understanding where the main flaws are, and addressing those flaws with a lean thinking methodology that targets efficiency. It also showed that while talking about a complex process like this one, sometimes smaller changes regarding reengineering and standardization and more than enough to obtain satisfactory values of improvement. The fact that the changes that were implemented weren’t drastic nor complicated, made it possible to do an easy change management in the team, so that the new workflow entered the teams routine without suffering too much inertia. This was crucial for the success of these measures. Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 39 6 Future Work 6.1 Developed projects Even though the success of the implement projects was guaranteed, the work needs to continue being developed for both cases. Being part of the continuous improvement department, the work is of a continuous matter and so with time, the implement solutions will require modifications in order to potentiate their gains. 6.1.1 Communication improvement Regarding the communication improvement, it is necessary to keep doing the follow up with the delivery teams for a longer period of time. Even though the 45% rate of communication being made using macros, the lower values of multi sharing as well as a good acceptance of the use of the “My note” field, preventing unnecessary reopening of tickers, this projects needs a longer accompaniment. The reason being this need is there are still new daily feedbacks given by the team every week, and Zendesk is also a tool that is constantly updating and therefore new features that can help make the project more complete might appear. The worksheet to retrieve the team’s feedback will continue to be available online with weekly check-ups to include the valid proposals on Zendesk, and this tool will continue to be closely followed in order to understand if it can provide new features that will allow communication efficiency and assertiveness. 6.1.2 Process Engineering As it was stated before, the RTO process reengineering and standardization was a success, and other than the normal follow-up that these types of procedures require involving change management to guarantee that the impacts of the modifications are only positive and that no negative causes come from changing working methodologies, there is not much to do or add to it. That being said, the lack of standardized and mapped processes in the company is a vivid reality and so what was done to the RTO process, should also be applied to many processes in order to obtain consistency and efficiency in all possible tasks. This is not an easy assignment as there is a large number of complex processes that the delivery team deals with on a daily basis. It is important to focus the work to be done into individual processes and address them orderly by how problematic they are. The same way this project targeted the RTO process for the reasons mentioned in chapter 3, there should be a study regarding the impact of each operation, to understand the ones that are in need of urgent study and modification. 6.2 Ticket Handling System Regarding other types of projects, one that was talked about for having relevance while talking about the team’s performance, is the development and implementation of a ticket handling system. Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 40 A ticket handling system would be a method that would allow the delivery team to address the different issues with different urgency. Since the team works by views that are related to categories, and naturally different categories have different levels of urgencies, it was understood that it would be important to define priorities among different categories, as well as specific SLA’s for each category and sub-category (instead of a general SLA for every ticket) To make this possible, what would have to be done is a combination of two things. First define priorities according to each tickets nature: Number of departments affected, number of resources required to solve the issue, what services does the issue affect, among others. Second, every category and sub category should be assigned with specific SLA’s that fit the nature of the ticket. 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(2009), “Key Performance Indicators Framework – AMethod to Track Business Objectives, LinkBusiness Strategy to Processes and DetailImportance of Key Performance Indicators in Enterprise Business Architecture”, AMCIS No. 726 Wetzstein, B. and Ma, Z. and Leymann, F. (2008), “Towards Measuring Key Performance Indicators ofSemantic Business Processes” BIS LNBIP Vol 7, pp. 227–238 Pan, W. and Wei, H. (2012), “Research on key performance indicator (KPI) of business process”, Second International Conference on Business Computing and Global Informatization Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 43 Appendix A: Delivery Macros Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 44 Appendix A: Delivery Macros (Cont.) Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 45 ANEXO B: New system Solution for Creating a Manual Return Applying Office Lean Principles to Empower a Department’s Performance on a Luxury Ecommerce Company 46 ANEXO B: New system Solution for Creating a Manual Return (Cont.)