If you’re like most manufacturers, you don’t track order processing. Yet focusing on this performance metric can identify operational inefficiencies that are cost-cutting opportunities. Another major advantage? Continued monitoring lets you keep those costs in check and predict future outlays. If you haven’t already, your company needs to develop a blueprint that delineates the tasks to be measured.
Tracking begins with a specialized enterprise resource planning (ERP) system or online workflow management program that can capture the workflow transactions involved in order processing. This is done in much the same way as you’d measure non-linear workflow in the production setting. As orders move from one person or terminal to another, they are automatically time-stamped and the number of times an order “changes hands” is recorded. Consider using a system that manages data about customer buying behaviors along with tracking order processing to create customer profiles and order histories. This will enable you to develop sales strategies based on demand and forecast opportunities to cross-sell and up-sell.
While computer programs are essential for gathering data, analyzing complex processes, and providing routine monitoring, don’t overlook the human element. Make order-processing improvements a priority, and charge a team of stakeholders with streamlining the process. The visibility that tracking brings to order processing reveals costly patterns that provide a basis for planning and scheduling. Furthermore, in discussions of order processing, tracking offers objective data that puts everyone on the same page. An analysis of the workflow metrics is handled by a business intelligence program that gives a non-IT person, such as a COO, the ability to “slice and dice” the data into a meaningful report. As the system gathers data over time, you’ll have a performance and cost record that can be used to analyze and fix inefficiencies. This ongoing analysis becomes an important tool for continuous improvement and forecasting.
You can learn a great deal about your operation when you know the steps involved in entering a new order. How many departments and individuals handle the order? How many pieces of paper change hands? What happens when an order changes? This lets you determine where bottlenecks exist and what transactions need to be changed, eliminated, or added.
Customer order management means different things to different people. It may be limited to account processing and the activities involved in the entry, maintenance, and fulfillment of orders. Some of the tasks include pricing, managing customer credit, checking parts availability, inquiring about order status, invoicing, and processing accounts receivable. In other words, customer order management includes every process from order to payment receipt. Our Manufacturing Services Group works with businesses in diverse industries from building materials, to food processing, specialty sporting goods, commercial lighting, health, beauty, pharmaceuticals, and more. Whatever the size of your venture, we can help you meet your goals, now and in the future. Contact our RBT team of professionals for more details about how a cost segregation study could improve your situation. Additionally, if you would like to submit feedback or topic ideas for future articles our team produces, please feel free to contact us at TLideas@rbtcpas.com.