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Simplify Business Processes – Retail
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Simplify Business Processes – Retail

The client

The supply chain finance operation of a multi-national retail organisation responsible for maintaining transfer prices. This operation was accountable for creating inter-company invoices to allow products to be shipped throughout the global supply chain.

 

The challenge

5% of all orders had a delay in shipping to customers due to missing prices which did not allow invoices to be processed on time. The process for uploading and maintaining the different prices for SKUs was very complex. There was no one person who understood the end-to-end process and what all the interdependencies were. Each operational team understood their own responsibilities and managed to service level agreements but were unaware of processes being delivered up and down the chain.

Over 50 trading models were in place adding complexity into the data setup process. The average number of different prices required to allow trade through the subsidiaries across the organisation was four. Each price needed to be in place to trade and each was calculated differently. This may relate to the final retail price or the cost price or in many cases both. The supply chain was complex and involved hundreds of people globally supplying information at the right time and for data to be uploaded into the pricing systems.

 

The solution

The solution was dual-pronged and involved simplification of both the trading models and the end-to-end process. Reinvigoration supported the end-to-end operational process design work, partnering with another consultancy who specialised in trading model design.

In order to understand the current process it was necessary to map the end-to-end process flow, identifying all the tasks, who carried them out and in which sequence.

  • A value stream map was created which illustrated these three elements and also showed the current process was only capable of collecting, calculating and uploading a price in 23 days. This was the root cause of why 5% of invoices could not be processed
  • Workshops with key stakeholders were held to identify areas of duplication and where operational handoffs could be eliminated
  • 15% of process steps were eliminated and a further 10% were combined with existing steps to reduce handoffs between operational teams
  • Financial controls and signoffs were consolidated to reduce risk and improve speed of the end-to-end pricing setup
  • Triggers were created with I.T. to request data when required from individuals and then reminders set when appropriate
  • Process documentation was created explaining to local operating companies and suppliers the correct process for supplying price related data and the associated guidelines. This was launched with a help function and a dedicated web page hosting a newly created E-learning module
  • Any urgent shipments followed a dedicated escalation route between the invoice and data teams cutting out multiple dependencies and lines of communication

 

The results

The implementations were highly effective meaning missing price was dramatically reduced in Invoice Processing:

  • Over 99% of invoices were not affected by missing price at the time of customer request
  • Over 2,000 more shipments were despatched on time compared to the previous 6 months
  • The Invoice Query Team’s work level reduced by 24% compared to the previous 6 months, with price missing no longer their largest contributor of work
  • Average price step-up time reduced from 23 days to 8 days
  • New Product Launches achieved a 100% invoice right first time which is critical for availability of product to the market
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