Arrival Sampling up on

Deposit in Coffee branches

By:- Andinet Bibisso

1
Table of Contents

1. Statement of the problem

2.Conceptual frame work/value
proposition and significance
3. Methodology
2
Cont.....
4. Implementation strategy and
budget equipment
5. Cost benefit analysis

3
1. Statement of the Problem
Heavy cost that has been incurred
during loading and unloading
activities around sampling area.

4
Cont......Pictorial representation of
unloading around sampling area

5
Excessive spillages

6
Cont.......
 It creates Heavy burden on Daily labors
The same trucks twice unloaded and once loaded

7
Cont....
Arrival trucks are waiting for extra
hours to deposit (9788 trucks) and
extending SLA

8
Cont.......
Shortage of trucks to deliver the
commodity from coffee supplying
Woreda
Feb 01 -Mar 27, 2021 total arrival vs waiting    
trucks
Arrival Non-ECX Total Waiting Waiting for Waiting for Total waiting Remar  
Arrival for Grading deposit trucks k
samplin
g

78.4%  
6636 1652 8288 950 5202 4586 10738 DTW
waiting
for
Gradin
9 g
Cont.....
 Non-ECX (vertical integration, direct trade, grower..)
alarmingly increasing with reference to Dilla branch( for
instance from the total arrival coffee to Dilla branch in the
last nine month ( July 01, 2020 to Mar 31, 2021) 57% was Non
–ECX(13.8% increased from last year Same season) and 43
was direct to warehouse, pictorially...

Nine month`s inventory records status of 2019/20 VS 2020/21 with dif -

ferent modality

9000000
8000000
7000000
Weight in KG

6000000
5000000
4000000
3000000
2000000

10
1000000
0
BY deposit DTW DTW Delivery Non-ECX
2. Conceptual frame work

 generative frameworks that reflects the

thinking of the entire Innovative idea process
 It is expected to identify the problem, work
out the major factors involved and identify
possible causes and effects using different
diagrammatic presentation. Thus, the
following figure has more: 11
Cont......
2.1 Diagrammatic representation of CF
Causes

Some Operational procedure

Frequent Loading and
unloading activities...
Customer payment

12
Cont......
Problems

 Waiting extended hours to deposit

 Incurring cost
 More spillage
 Declining efficiency of daily labors
 Stretching SLA
 DTW diminishing
 Inflates non ECX schemes

13
Cont.....
Solution
Applying
sampling up on
depositing as a
Excellent
service for
DTW
14
Arrival sampling up on deposit
Usual Operation process seteps numbered at a glance
1. Receiving arrivals from coffee supplying Woredas

15
Con.....
2. Sampling Operation

16
Cont.....

Spillages

17
Cont......
3. Waiting for grading at office compound

18
Cont.....
4. Weighing

19
Cont.......
5. Depositing at shade

20
Cont.....
2. The new innovative idea entitled arrival sampling up on
deposit operational process
1. Receiving arrivals from supplying woredas

21
Cont......
2. Weighing using weigh bridge`s

22
Cont.........
3. Arrival sampling up on depositing at shades

23
Cont........
2.1 Significance of Arrival sampling up on deposit
Customer satisfaction is a key component
of a successful and prosperous
organization. Thus, we must continue to
double up of our efforts in cost saving,
revenue maximization, operational
excellence, delivery of superior customer
services and in working together and team
work
24
Cont.....
Sampling related Cost reduction at least by
50%(1.5Million cost will be reduced to 787,718
ETB if we receive only 291741bags
787,718 ETB revenue will be generated if we
deposit only 291,741bags(First rate service, WH,
Storage handling fee, compensation fee for 1.5kg
sample after first weight.......)
Totally avoiding or minimizing waiting trucks for
grading in our office compound for extended hours
Shortening SLA for deposit from 72Hrs to 48HRs
for specialty coffee and or to 24hrs for commercial
coffee 25
Cont.........

Diminishes loading unloading related operations

burden and or Increasing the operational
efficiencies of daily labor associations by around
25% or from Loading and unloading of 875,223
bags to only 291,741 unloading
Diminishing or making nil spillages
Tendency of theft and or Kisheba of commodity
will be diminished/avoided
Improved customer service and 5% increase in
DTW and customers will slide from Non-ECX to
DTW
26
Cont.....
Indirectly it shrinks transportation
shortage for carrying goods from an
area to other areas national wise
In directly arrival coffee Transportation cost
from supplying woredas to be reduced by 30%
due to trucks will be released with out waiting
for grading( Referencing Coffee supplying
woredas nearby Dilla branch)
This idea could be a good stepping ground for
other innovative idea....
27
3. Methodology
The Path through which the innovator
need to put the idea in to practice.
It shows how the innovative idea
outcome at the end will be obtained in
line with meeting the objective of the
notion.

28
Cont....
3.1 Innovative idea design
 Customer-centric: Service Design Innovation focuses on
understanding customer needs to make service user-friendly,
competitive and relevant to customers.
 3.2. Sampling Techniques and Procedure
Multistage sampling technique was employed for the notion, Dilla
branch was purposively selected due to financial and time
constraint to reach other branches,
in the second level sampling operations and warehouse deposit was
selected again purposively and
in the third level simple random sampling was employed to select
customers and staff members.
29
3.3 Data types and sources
Both Primary data and secondary data which are
quantitative and qualitative in nature were used for
this study.
3.4 Data collection
Unstructured interviews
(In-depth information, Freedom of flexibility
Accurate data)
Digital/mobile cameras for taking pictures
Observation

, 30
3.5 Data analysis
A Combination of...
Descriptive:- describe the basic features of
Data like 78.4% DTW trucks were waiting for
grading in the last two months
predictive (using previous data, Like 25% of
the arrivals of DTW uses arrival sampling up on
deposit
Prescriptive Analysis to determine which action
to take in a current problem or decision.
..... employed to discover Arrival sampling up on deposit
for business decision-making.
31
4. Implementation Strategy and Budget equipment
The process of launching a change to systems,
Pilot: implementing a change on limited basis in
order to reduce risk( To be implemented at Dilla)
Parallel run:- Operating the old and new version
of Arrival sampling..
 as it is giving less disruption to the usual
operations
no loss of business if the new procedure fails
suddenly

32
Cont......Budget
It also gives an overall picture of the
finance required for the innovative idea
to operate and contains the budget for
innovative idea finances and cost break
down of the innovative idea
The explicit cost and expected explicit
revenue from the notion...

33
Cont....

34
Expected Revenue
Benefit No bags to Cost(5.40) Arrival Remark
be sampling
Co unloaded up on
ffe and loaded deposit(25
Estimated
e during %) in
annual
Br sampling bags Cost(2.70)
deposit in
an
Bags
ch
es

6301729.8 50%
cost
1166987 291741 reduce
11 3,889,968 787718 d
       

35
4.1 Implementation schedule

36
Cont.....

37
 5. Cost Benefit Analysis
As its name suggests, Cost-Benefit Analysis involves adding up
the benefits of a course of action, and then comparing these
with the costs associated with it.
5.1 Pay back period
The results of the analysis are often expressed as a payback
period – this is the time it takes for benefits to repay costs.
Total cost / total revenue (or benefits) = length of time
(payback period).
.

38
Costs
Cont.......
Costs

Category Details Cost in First Year( ETB)

Preparing procedures Perdiem 4200

Awareness creation training Perdiem for contributor, driver and lunch perdiem for all
cost branch managers and o4 participants at each branch 61500

Pilot testing Lunch perdiem for a week for participants 15000

Professional fee for the Receiving professional advice from The division managers
concerned bodies and committee members of innovative idea 24000

Total 39 104700
Cont......
Benefits....

Benefit Within
Benefits 12 Months

Service fee 787,718

Improved customer service and 5% increase in DTW as a result

of Arrival sampling up on deposit 100000

Total 887,718 40
Cont.....
the payback time as shown below
Total cost / total revenue (or benefits) =
length of time (payback period)
104700/887715=0.11 year or 39.6 days

41
5.2 Net Present Value
This method considers the difference between the total
discounted benefits minus the total discounted costs,
which gives the Net Present Value.
The following formula is used to calculate NPV:

Where:

 Z1 = Cash flow in time 1

 Z2 = Cash flow in time 2
 r = Discount rate
 X0 = Cash outflow in time 0 (i.e. the purchase price /
initial investment)
  42
Cont....
Consider the implementation of arrival sampling up
on deposit which requires an initial investment of
104000, it is expected 887718 to generate in the first
year, 932103.9 in the second year(5% increment) and
978709.09 in the third year(5% increment) . The cost
of capital for this project is 10%, NPV= 2,207,968.79
Finally, yet importantly the Arrival sampling up on deposit will
be viable, improve organizational efficiency, cost effective,
revenue generated, user-friendly, long range benefit, adaptable,
no risk on the usual operation.....and need to be implemented
by enriching comments from IIRR......with a very list
cost( The planned cost can be minimized
as much Possible) 43
44