How to build internal Operations Excellence capability at all levels of your organisation?
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.
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 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.
The implementations were highly effective meaning missing price was dramatically reduced in Invoice Processing:
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