Question: What was the utilization rate of each operating resource during last year's invite-only event? Task Time Unit of Lot Size Task Cycle time Capacity Capacity Utilizat (min/unit Analysis (units) Resource |Workers Machine Stations (min) (units/hr) | Demand | Average Demand = ONNIE JEWELLERS Demand/Capacity Step 1 Greet 0.5 Customer Carter 120 Question: Where was the bottleneck? Question: What was the system capacity of the store's invite-only sale event operational system? 1 Extend the same spreadsheet template to analyze the capacity utilization at different times during the event (4-5 p.m., 5-6 p.m., 6-7 p.m. and 7-8 p.m.). Use the numbers provided in the case for "demand" during each of those time periods. Capacity Task Utiliz. at Time Unit of Lot Size Cycle Capacity Average (min/uni Analysis (u Resource Workers Machine Task Stations time (units/hr| Demand | Demand (min ) t) Demand/ ONNIE JEWELLERS Capacity Step 1 Greet 0.5 Customer Carter 0.5 120 19 Using your analysis, answer: on Where is variability likely to occur in the upcoming invite-only sale event operations? How might variability impact the performance of the operational system and the previously identified business opportunities ? 27 Question What specific operational improvements would you undertake to address operating concerns? Briefly explain how you undertake these operational improvements. 29Onnie Harris, owner of Onnie Jewellers in Learnington= Ontario. and her daughter, Victoria, were preparing for their annual summer promotion event. Held in mid-August= the invitation-only summer promotion event had become hugely successful and very popular with Onnie's clientele. The first event had been held three years prior. and Onnie prided herself on building on each year's success by making improvements. It was 9:00 am. on April 1?, 201?. and Onnie and Victoria were having coffee before the store opened an hour later as they discussed potential ideas for that years event. As they sat dovm= Onnie commented to Victoria: There are a number of things to discuss. We need to make decisions about our theme for this year= decide on a date. and go through the guest list. However= I want to start with a discussion on potential improvements to the customer shopping experience. Frankly= I think we could have done a better job last year. There were long lines= which frustrated some of our clients. Our event needs to reect the quality and prestige of our brand and Iwant to do a better job this year. ONNIE JEWELLERS Founded in 1989. Onnie Jewellers sold fine jewellry. including bracelets. earrings= chains. and engagement rings. Dlu'ing her nearly three decades in business. Onnie Harris had developed relationships with premium suppliers in Europe and North America that provided her with exclusive access to elegant jewelhy. In addition. Onnie was an accomplished designer and offered custom-made jewelhy. Located in downtown Learnington= Onnie Jewellers: clientele included members of the local community. but Onnie also had regular customers from as far away as Toronto and Michigan. Trained as a jeweller= Onnie also had a knack for marketing. She described her strategy: My clients are discriminating. They recognize that we carry products with fashionable designs that are not available om other retailers in the area. At the same time. our price range is reasonable so the purchasing experience is not intimidating. We do have expensive jewelhy= but a Page? BEHDMIJ typical purchase is between $51301 and $1_DOU. Part ofmy marketing strategy is that we do not put our product on sale or provide discounts. I also do not promote individual pieces on our websiteI want customer's to visit the store. Our summer event is popular with clients because of the opportunity to socialize in a cocktail party environment. ln addition. anything purchased at the event is taxfree.' SUMMER PROMOTION E'H'ENT ln 2014, Onnie decided to experiment with a new event for her loyal customers. Victoria had graduated 'om university that year and joined her mother in the fanrily business. Onnie said, "I wanted to use Victoria's training at business school to help promote our brand. She understands social media: which was an area I had previously ignored. The event was a great project for Victoria, who used Facebook and lustagram to connect with our clients." Aer the first event in 2131-1: the summer promotion event had become larger and more elaborate. For example. Onnie estimated that 24D people had attended the 2016 event, compared to approximately IUD people two years prior [see Exhibit 1}. The event was held in midFAugust and only invited guests were allowed to attend. Invited clients were sent an invitation via email and could reply to it on the Onnie Jewellers Facebook page. Omrie reached out personally to some customers to make sure they were aware ofthe timing ofthe event. Onnie invited 30D people to the 2015 event. which had a Caribbean theme and ran om 4:130 pm. to Silt] p.m_ Omrie's son: Carter: who was in his third year of university at that time. acted as host at the front door and greeted clients as they arrived. Carter had a list of people who had conrmed attendance at the event. He checked the names on the list and noted the time of arrival [see Exhibit 1}. He also presented each person with a gift of earrings in a small velvet sack. Carter told each guest that complimentary cocktails were available at the bar. It took Carter approximately 30 seconds to greet individual guests. However. he sometimes ran into problems with guests who were not yet registered. He also 'equently had to deal with couples or large groups of four to eight people that attended the event together. Onnie hired Matt Hall to work as the bartender. In keeping with the Caribbean theme: Matt prepared a special mojito cocktail, but also offered an assortment ofwines, beer. and mixed drinks. The bar was set up in the back corner of the store. Requests for wine and beer were accommodated relatively easily. and the mojitos were prepared in advance. However: approximately onethird of the guests requested cocktails: such as martinis and mixed drinks, which took more time to prepare. _-"-'Ls a result. l'vlatt estimated that he could serve approximately 80 guests per hour: on average. Matt commented. \"I estimate that nearly 30 per cent of the guests come to the bar for a drink. lslost people stay for more than an hour to enjoy the event and socialize with friends. Probably one-half ofthe people I serve come back for a second drink." A local caterer provided hors d'oeuvres, and Karen Martin was hired by Onnie to serve the food: collect empty glasses and plates: and help Matt replenish his supplies at the bar as required. Karen typically moved through the store with a plate ofhors d'oeuvres and returned to the otce in the backroom where the food and dishes were stored: 13 minutes later with a tray full of plates and glasses. 1 All currency amounts are in Canadian dollars. ' The Ontario harmonized sales tax [HST] was 13 per oerIL Page 3 931TDD10 Four salespeople assisted customer's. Dnnie placed less expensive, more popular items on top of the display cabinets so customers could inspect them without assistance. More expensive and oneof-akind items were in locked glass display cabinets that required a salesperson to remove them for customer inspection. The tax-free inducement motivated many customers to purchase more than one item: allowing some to get an early start to their Christmas shopping. Unnie estimated that the salespeople spent an average of ve minutes assisting individual customers and that 3D per cent of attendees did not request assistance from a salesperson. Payment was processed at the back of the store opposite the bar. Sales records from the previous year indicated that approximately 90 per cent of people made a purchase at the event. Dnnie's sister: Emily, prepared individual: handwritten receipts that listed each item and the cost. The time required to prepare the receipt depended on the number of items purcha sad. but averaged 90 seconds. After the receipt was prepared: Emily handed it to Victoria. who sat beside her at the desk_ to process the payment. For approximately TU per cent of purchases: customers paid with either a credit card or debit card. which required the transaction to be processed using the store's terminal. Victoria would insert the customer's card in the terminal. input the amount of the transaction and pass the terminal to the customer so he or she could input their PIN. After the transaction was approved Victoria would staple the receipt printed by the terminal to the bill. Victoria estimated that ED per cent of customers paid using cheque and the remaining 10 per' cent used cash. She also estimated that it took her an average of 30 seconds to process a customer payment, and it took the terminal another 3D seconds to process a credit or debit card payment. Exhibit 2 summarizes the number of staff working at the event and the average times to perform the activities. ASSESSING GPPGRT U NITIES As Dnnie poured Victoria a cup of coffee, they looked at the data collected from the previous year and discussed where opportunities existed to make improvements to the customer shopping experience. To avoid congestion in the store: both women agreed that the EDI? event would invite the same number of guests as the previous year. Based on her business school training, Victoria had created a list of potential changes to the event for her mother to consider. First. she suggested that more information could be provided online ahead of time, such as merchandise that would be available for sale. Victoria hoped that this would help customers to be better prepared when they arrived at the event. Second, she wondered ifthe timing for the event could be staggered for example: inviting half of the guests to arrive at 4:131) pm. and inviting the remaining guests to arrive at 6:130 p.m. Lastly, Victoria thought that they might consider investing in new technology. She had done some preliminary research about iPads that could be used by the salespeople to create bills for customers. The bills could then be printed at the back desk after which Victoria would process the payment. Victoria estimated that the cost of the new systemT including four iPads: software: and one printer was $15,001]. Both Dnnie and Victoria hoped to quickly identify specic areas for improvement: as they expected that the 201? event would be the most successful ever. Page 4 9B17D010 EXHIBIT 1: CUSTOMER ARRIVAL TIMES AT THE 2016 EVENT* Time Number of Customers 4 p.m. to 5 p.m. 90 5 p.m. to 6 p.m. 75 6 p.m. to 7 p.m. 50 7 p.m. to 8 p.m. 25 " These data were taken from the list used by Carter to note customer arrival times. Source: Created by the case authors. EXHIBIT 2: ACTIVITIES AT THE SUMMER PROMOTION EVENT Resource Number of Staff Average Time to Perform Greeter (Carter) 30 seconds per customer Bartender (Matt) 45 seconds per customer Server (Karen) 15 minutes per tray Salespeople 4 5 minutes per customer Billing (Emily) 90 seconds per customer Payment (Victoria) 1 30 seconds per customer Terminal (credit and debit) 1 30 seconds per transaction Source: Created by the case authors