Frumherji Ltd

Case Assignment

SUBMITTED BY
RAMALU DINESH REDDY
1810122027
1. What were the primary challenges facing Frumherji's Vehicle department? Which ones were
most important and why?

Ans: Frumherji vehicle department is facing 4 primary challenges in maintaining enough staffing
levels.
a. Shortage in qualified mechanics who completed government mandate training program
b. Most employees taking vacation during summertime where demand for inspection is
high.
c. Higher employee turnover rate of 22 to 23 percent per year.
d. Compensation limitation to mechanics as per the government regulations.

Out of these four I feel the shortage of qualified mechanics and compensation limitation to
mechanics are important because the percentage of population of the country increasing every
year with the increase of more private vehicle which indeed will bring more customers. If there
is a shortage of qualified mechanics and if the employees go for summer vacation customer
waiting time increases which indeed leads to customer dissatisfaction.
Compensation plays an important role in employee satisfaction, if the employees are not
satisfied then the employee approach towards work will not be of perfection raising quality
issues. Already we can observe there is high attrition rate in the industry which is not good for
industry as well as for the firm.

2. What is your assessment of Sigurdsson's idea (mentioned at the end of the case) to create
separate lines for first and second inspections? What would be the arguments for and against it?

Ans: Sigurdsson`s idea to create separate lines for first and second inspection is a good one
according to my assessment. Since customers are already unhappy with the long waiting lines
for the inspection and top of it waiting for second inspection same as first inspection will be
problematic for customers. According to feedback given by one customer, they waited about 90
minutes for their inspection which lasted only for 5 minutes. Most probably the inspection they
had is second inspection as they were mentioning about the check for necessary repairs and if
they had a separate lane for second inspection which hardly lasts for 5 to 10 minutes customers
waiting time would be reduced.

According to statistics only 24.8 percent of the vehicles didn’t pass first inspection. So, we can
design a process of finishing all the second inspection vehicles and then the facility can be used
for first inspection vehicle meaning lane dedicated for the second inspection vehicle will have
priority for second inspection vehicle and if free can be used for first inspection vehicle.

3. Answer the following questions:

Ans: Bottle neck in this process is the waiting for service after the paperwork which is typically 5
to 78 minutes.
 b. What is the capacity of this process in cars per day?

Ans:

Base 2 to 4 Min Max

c. What is the total value-added processing time for Check-in, inspection, and data entry if we
ignore waiting?

Ans: Total value add processing time for small and large vehicles considering the maximum time

Processing time(min) Processing time(min)

4. In what ways does the performance of Frumherji's emission testing and inspection process
differ from the ideal? What ideas do you have for improving operational performance? In what
ways would your ideas enhance Frumherji's market position?
Ans: Frumherji focused more on service quality and its motive is communicated to all the employees
through company`s intranet site, Signs posted in workplace and training staff. Performance of
Frumherji's emission testing and inspection process differs from ideal starting from inspection
lane where the inspection is done based on the first cum first serve basis rather than based on
registration number assigned in the check in process. Some time even the second inspection
vehicles are given priority over the first inspection vehicles in queue.
Ideas of improvement would be to take control of vehicles from the owners after the check in
process and provide an estimate time to the vehicle owners so that the waiting time can be
utilised by the customers for some other work. This idea will be useful in improvement of
operational performance because the once the check in process is done inspection unit will have
full control of vehicle and they can decide better on what to be done. Waiting time of the
customers is the irritating part and if we follow this procedure customers can leave vehicle and
come for pick up at the informed time during check in process. Market position of frumherji
would be increased because of the new innovative process and reducing the customer burden
by involving customer only at initial and end point of process.
5. How would you implement the changes you have suggested? What challenges might you face?
Ans: Idea of implementing the process of taking the control of vehicle during the registration or
check in process can be implemented in pilot basis at one of the locations hesthals.
Implementation of new idea requires training for staff and new barcode system. New barcode
system requires a unique code generation of each vehicle and the token associated with the
barcode. This barcode can be acted as a customer tracking option by which they are aware of
the status of inspection process. We need few extra staff to drive the vehicle from reception
area to inspection lanes.
Challenges:
a. Implementing new technology requires technically qualified professionals.
b. Resistance to change from existing staff.
c. Educating customers about the new process and how to use new barcode system.
d. Recruiting new staff for transferring vehicle from reception to inspection lanes.
e. Accurate systems to predict exact delivery time which needs to be communicated to
customer.

6. What metrics would offer the best indicators of the success of your implementation plan?
Ans: Service quality GAP model would be a good metric to measure to check the success of the
implementation plan. Service quality gap model identifies the as a management our perception
about the customer issue is correct or not and also the solution proposed to solve the GAP is
actually accepted by customer or not.