Organization Planning & Design

Employees Make The Call In C&IS Redesign Effort
Amoco Visions - 1991 - By Lonnie Emard

Striving for a 100 percent accurate, next-day invoice
What do our customers expect? How can we provide excellence in customer service and improve profits and cash flow? When management for the Commercial and Industrial Sales (C&IS) business unit and the associated Amoco Oil departments at the Amoco Customer Service Center (ACSC) responded, the answer was "Produce a 100 percent accurate, next day invoice."

For the C&IS business unit, a very complex interrelationship has evolved, one that is commonly unavoidable. The components that make up this relationship include a growing customer base, organizational structures, complex business functions, guidelines and policies, information technology, and employee needs. All of these components are changing and maturing at different times.

Is the situation confusing? Yes. Are the root causes of problems well disguised? Often, yes. Is the business changing? Yes. When reacting to changes, timing, budget constraints and seemingly sound logic usually lead to very localized solutions. C&IS has taken the initiative to adopt a proven methodology and review the entire process from the time an account manager first talks to a customer to the time the customer receives his invoice.

Organizational systems design (OSD) provides methodology
Paul Gustavson of Organizational Planning and Design, Inc. has consulted with Amoco Oil to review how the OSD methodology could be used in analysis and redesign. Specifically, this methodology is being used extensively in the ACSC in Des Moines. We already have started redesign efforts in the areas of credit and collections, remits, and commercial and industrial sales.

The three major parts of the OSD process are:

Set strategic direction

Analyze and make recommendations

Transition and implementation

The strategic direction is primarily the responsibility of a management steering committee who are common stakeholders in a particular business process. The steering committee sets a vision and clarifies the purpose for the redesign.

This group charters an actual design team, made up of experts representing different areas of the business process under review. Their written charter includes the scope of the redesign, the available resources, time parameters, and constraints surrounding the analysis and recommendations.

The design team is responsible for performing extensive analysis in the areas of detailed work flow, customer require ments, systems, and the human interface elements of the particular business process identified by the steering committee.

Diagrams 1 and 2 highlight the approach of the OSD concept.

Some of the key ingredients provided by this method can be placed in two major categories:

People

Bring a group of employees together with differing expertise and analyze an entire work process.

Educate those same employees to concepts such as variance control and value added vs. non-value added tasks.

Allow these employees to recommend ways to redesign work processes to help meet the current needs of the business.

Tools

Environmental scan: information about all of the external factors that will have an impact on the redesign process.

State Ghange diagram: shows the major points where the product or service changes form: shows the "handoffs." Diagram 3 shows an example of a state change diagram.

Variance matrix: provides a way of showing the relationship of variances between state changes tuPstream/ downstream).

Cause and effect analysis: shows the frequency of variances and links them to a major root cause.

Value-added activities and tasks: documentation of whether each task adds something to the product or service or merely verifies, moves or repositions it.

Redesign techniques: uses information from other tools to:

Minimize non-value-added tasks

Control variances where they occur originally

Provide for the effective design choice as shown in diagram 1

Have individual departments control all activities for a particular state change.

Highlights of the recommendations

On August 6-7, the C&IS design team provided a recommendation summary to the steering committee and Bob Gamrath, vice president C&IS, Dave Rendall, manager, ACSC, and John Samide, manager Amoco Oil SDS. Several other interested managers and supervisors also attended. The team provided 62 recommendations to address the control and elimination of variances across the stage changes shown in Diagram 3.

The design team used the variance matrix as its most important tool to identify potential variances and show causeeffect relationships. They also used actual data reflecting current delays and problems in producing a 100 percent accurate next day invoice. The current impact of reworking sales transactions and adjusted invoices after customer complaints was monitored closely in this process.

The process of setting up customer information was fragmented, with many different organizations carrying some responsibility. Instead of one organization and one process, areas such as tax, credit, traffic, pricing, product accounting and sales accounting ali must position Amoco's Oil systems and data bases to handle a sales transaction between Amoco Oil and a commercial customer. Because of this complexity, we are considering an account maintenance team or a customer service team, along with several systems solutions.

Many recommendations concerned the current Terminal Automation System redevelopment proJect. The terminal location, as the point where the product transfer actually occurs, plays a vital role in the C8eIS process. Recommendations from the design team have been included by Amoco Oil marketing and Amoco Oil SDS in their JAD process.

Several recommendations involved current systems solutions that have become part of the rank ordered work plans for the Data Edit and Csilection and Amoco Integrated Sales systems.

The team recommended improved feedback and monitoring systems to help ensure that upstream variances in capturing customer information and sales transactions are controlled in the area where they begin.

The steering committee has continued to provide guidance and direction. An oversight committee was formed, consisting of Randall, Gamrath, and Samide. Transition and implementation is now the responsibility of transition teams including members of the impacted areas and applicable members of both the design ar~d steering committees. This process is in the early stages of roll-out and will continue over several years.

Here are some comments about the OSD process from various members of the design team:

Tom Griffin, Sales Accounting Representative, Des Moines
"From this experience, I believe that any employee who is given an opportunity to review an entire basiness process, becomes a better employee because of increased understanding of the big picture ."'

Karen Schultz, Credit Department Representative, Des Moines
"Our results focused on the needs of our extema/ customers and I believe our recommendations will position us to be very competitive in the '90s."

Jack Lanman, Integrated Systems Representative, Chicago
"Adef the tools that the design team used set the stage for open and honest communication, which for me was the greatest benefit."

Larry Hern, Information Systems Representative, Des Moines
"Theprocess was both rewarding and frustrating as the matrix leads directly to roof causes of variances' but getting there proved difficult while interpreting relationships of so much informatfon."

Lonnie Emard, IT&QA Representative, Chicago
"This process provided one of the best methods I've seen to gather a complete set of business requirements and allow for more than just system solutions to be designed."

Kreig Smith, Human Resources Consultant, Des Moines
"Seeing the social side of systems included a design process is refreshing, and the concept of teams controling work processes will carry us a fong way toward ourgoa/s."

The benefits derived from this process lead to a more unified, team-oriented, customer-focused approach to doing business. Visions will follow the progress of the redesign projects as Amoco Oil SDS continues to walk in a growing partnership with its clients as they open new doors toward more self-directed work teams. As for C&IS, their attention is on the goal, and all indications show that this process has made it attainable.