Track Inefficiencies and Control Costs

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. And continued monitoring lets you keep those costs in check and predict future outlays.

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.

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.

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 on-going analysis becomes an important tool for continuous improvement and forecasting.

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.

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.

You can learn a great deal about your operation when you know, for example, 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.