To read part 2, click here.
To read part 1, click here.
Order entry and management is a particularly tricky automation challenge because it intersects and connects many different departments and cultures.
Properly done, an order is generated directly from a quote, which was created with a tie to inventory. The order is then passed to a staging area or a work ticket is automatically generated. At any point, when a customer wants to know the status of his or her order, a customer-service representative needs to be able to access this information directly.
It is common for smaller businesses not to have the process automated. An order is typically filled out by hand in the sales department, then typed in by an order entry person and ultimately walked down to the manufacturing floor or fulfillment environment. That creates a significant disconnect when a customer asks about their order’s status. The scenario is amplified when the production supervisor is on vacation and no one in the organization knows where the order is sitting. If there is an engineering or approval process, that creates one more source of discontinuity and error in the process, all of which could be eliminated with software automation.
Small businesses typically encounter a variety of challenges when considering automation of the order management process. For starters, automated quote generation can be extremely difficult. That is because of the challenge of integrating a sales-focused software program with an inventory and fulfillment program, but also because the complexity of the product being sold might not be affordably quoted in an automated way. Assuming quote-generation problems are solved, or ignored (in which case only sold orders are entered), the information required by the billing system is often insufficient for the production or fulfillment department. That means the order details still must be maintained on paper and hand-delivered to the operations area.
So how do we determine a return on investment for automating this process?
As before, the math is simple, but calculating the value of the automation may not be. Some common value drivers for this automation include:
- Reduced errors throughout the process;
- reduced incidences of orders slipping through the cracks at entry, engineering or fulfillment stages;
- reduced time the sales team spends generating quotes;
- importance of maintaining a version history of quotes as they are negotiated;
- importance of inventory visibility and production levels at time of quote;
- reduced customer frustration when trying to get answers about order status;
- value of being able to properly forecast requirements sooner, thereby producing and delivering sooner;
- value of customer service and management visibility into process;
- contribution to International Organization for Standardization or other types of certifications.
If we can assign a value to cost reduction or revenue increase because of any of these factors, we quickly can determine the payback period and return on investment of technology spending in this area.
Next week I’ll take a deeper look at the types of assembly or fulfillment operations commonly found in small businesses and identify factors that will make an investment in automation feasible.
This blog was originally posted on the Central Penn Business Journal Gadget Cube.
