​​ Victoria University BCO5501 Business Process Engineering – Semester 1, 2016 Case Study: Johnson Drilling Johnson Drilling Pty Ltd is a supplier of specialised drilling equipment for deep drilling rigs. They have a large number of repeat customers that rely on their drilling equipment, but they also cater for many other single purchases from other businesses. The equipment JD supplies varies in size from small screws with a weight of 5 grams each to drill engines of several metric tonnes. They manufacture drill attachments themselves, but source other components and equipment from other suppliers. Notably, Drill Engines and Gear Drives are manufactured to their design specifications by other manufacturers. Other drilling equipment is purchased from a range of suppliers. The nature of the equipment they sell requires the implementation of multiple methods of order delivery. A large range of smaller equipment and parts is kept in their central warehouse which is located in the Southwest of the US. Drill attachments, Drill Engines and Gear Drives are delivered directly from the manufacturers to the customer's drill site. JD's drill attachments are manufactured in Germany. They manufacture many standard drill attachments, but also prepare custom attachments as well. You have been employed by Johnson Drilling to prepare a new design for JD's order delivery process that will assist in scheduling of deliveries and reducing losses due to poor scheduling. An individual order from a customer can range in value from as little as $1 to $9 million. Some orders require cash up front, others are paid on installation or delivery. The method of payment depends on the value of the order and the internal credit status of the customer. Orders may include service and/or installation as well as equipment. When a sales representative takes an order, they must set the payment terms (cash, invoice, or on installation). Their choice depends on the size of the order and the relationship with a customer. All orders over $10,000 must receive a second approval by a senior sales manager. The delivery Process can involve several steps, with some borders requiring an installation technician to arrive to install the equipment. When the order is approved it is divided into several parts by a shipping manager – though not all orders require separation. The components of the order: warehouse delivery, deliver for manufacture [this may require several suborders], and installation / support. Each component of the order is shipped separately – though timing between them must be coordinated. For example an installation technician should not arrive before the rest of the order because considerable cost would be incurred to redeploy the technician or for the technician to wait for the rest of the order to arrive. In many situations it is also important that all the other parts of the delivery arrive within a short span of time, usually less than a week, to reduce the likelihood of misplaced parts of the order. When the shipping manager receives the order, the order is divided into its parts and the manager establishes the estimated dates of availability and delivery times for each part of the order. This information is added to each part of the order. Then each part of the order is forwarded to either the warehouse, manufacturing, and / or technical support. Each area then confirms (or not!) the ability to ship on a given date and advises the shipping manager. In the case of an inability to meet the specified date, the shipping manager will negotiate a new set of dates. Prior to shipping, each area checks the payment conditions, and if prepayment is required, but not received, the order is not shipped and the sales representative is advised . The sales representative then coordinates the required prepayment with a customer or marks the order has lost. When the warehouse receives an order a packer prepares the order for shipping and advises that the order is ready. If there's no other part of the order, the order is immediately shipped otherwise the order status is set as ready and the order is held until the agreed shipping date and other parts of the order (held by the manufacturers) are ready. When the manufacturers of Drill Engines, Drill Attachments, or Drive Gears receive their part of the order, they confirm their ability to ship with the sales representative, and the status of the order is set to ready. The sales representative has the responsibility of organising the details of transportation of the order and advises the Notes to students regarding the case study: The EPC and BPMN models are to represent a 'ToBe' process. Include a discussion for any changes you make to the originally described process. Students should feel free to add detail to this case study if it is needed or useful for the assignments. Often students may have different backgrounds and experiences that lead to different interpretations of the case study. The evaluation of assignment is based on your ability to use the techniques learned in class to describe your the interpretation of the case. Victoria University BCO5501 Business Process Engineering – Semester 1, 2016 manufacturers of the transport details, in particular the pickup date(s) and the logistics contractor details. When the order is shipped, its status is set to 'shipped'. In rare instances, a manufacturer may not be able to meet the agreed shipping date, so they set the status of the order to 'reschedule' and the sales representative is advised of the problem. The sales representative then has to determine if the order is to be cancelled or not. If the order is cancelled, the shipping manager recalls all other parts of the order and sets the status to 'lost'. If the order can be rescheduled, the shipping manager reorganises the shipping schedule for the remaining parts of the order. If the order requires installation by a support technician, the support manager assigns a technician to the order and arranges travel and accommodation for the technician. This must be done using the dates supplied by the shipping manager. In the case where either a manufacturer or the warehouse cannot deliver their part of the order on time, they must advise support immediately so that the support arrangements can be either rescheduled or cancelled. If new cost are incurred as a result of rescheduling, the sales representative must be advised of the amount and the reason they were incurred. Each area always sets the status of their part of the order to 'Shipped' when the goods are placed on transportation to the destination. You may, if it helps, decide to 'invent' managers, supervisors or clerks for the departments in this case study.