During this assignment thesis project it became evident from various references that the source of errors appeared most often to be in the Customer teams and Solution managers. Therefore, as a part of continuous improvement, more training should be provided in the critical phases of the process to the front-end. There should also be presentations about the whole process and the responsibilities of different working roles to everyone involved to leverage information about the impacts and consequences of the errors done in the front-end on the entire order-delivery process.
It was discovered that the long process with several separated responsibilities and tasks bends badly when things do not go as planned. Especially in the case of an incorrect sales order noticed in the later phase of the process the fixing process takes as many process steps and people involved backwards in the order-delivery process as it takes normally to one direction. Compared to a short process the lead time eventually becomes the longer the more process steps and people with specific working responsibilities and rights are involved.
Better information and communication standards are needed to guarantee the effective and on- time information flow between the stakeholders in a complex order-delivery process. As the work in the case company is very e-mail intense some company-wide rules for communication would be useful to minimize the extensive load of incoming e-mails and eventually ease the workload. Agreed standards along with effective working practices in different working roles would benefit the performance of the process and improve the lead time.
The empirical results of this case study can be compared to the history data of incorrect sales orders collected by OE. As mentioned, the incorrect sales orders were previously reported via e- mail to OE. During the data collection of this research the incorrect sales orders were marked in
the Buyers’ order status Excel sheets. It can be assumed that the data collecting method with the help of order status Excel sheets is more effective than e-mailing giving more reliable information about the number of incorrect sales orders.
The impact of different data collection methods of incorrect sales orders on OE’s monthly reports is presented in Appendix 2. Because the incorrect sales orders were reported to OE by the new collection method during November and December 2009 due to the data collection for this research, the proportion of incorrect sales orders showed a change in the trend. For example with the previous error collection method the share of incorrect sales order was 25% in September and 20% in October whereas in November it was 46% and in December 31%. As the number of incorrect sales orders can be assumed to be somewhat stable regardless of the reporting month and depending mainly on the total number of incoming sales orders, the high variation of order correctness level can be seen as an indicator of an ineffective information collection method.
8 Discussion
Order correctness guaranteeing that the customer receives what has been agreed on is one important factor affecting customer satisfaction. The importance of prompt deliveries according to the original customer order has increased as companies are streamlining supply chains and seeking new ways to fulfill customers’ increasing demands. Companies that cannot keep their order correctness of order-delivery process performance consistently on a high level will fall behind of their competitors and risk losing customers. A highly competitive market environment leaves no room for errors. In order to improve customer satisfaction, it is a necessity to improve process lead time and quality.
However, long supply chains and global ordering processes including 3rd party suppliers are
major challenges that make this axiomatic target a demanding task. Therefore, effective continuous improvement practices are needed to react to changes in factors that impact order correctness and eventually customer satisfaction. More importantly, they are needed to exceed the previous performance levels and strive for higher quality in purchase process performance. This study explored the impacts of incorrect sales orders on the purchase order process in a global case organisation functioning in the telecommunications industry. The focus was to find ways the case organisation could continuously improve to minimize the number of incorrect sales orders. The objectives were to describe the current situation to support decision-making, identify the errors of incorrect sales orders, and find out the time and the cost of extra work spent on cleaning the sales orders. The empirical purpose was to find out the number of incorrect sales orders released for purchasing, how the incorrect sales orders are processed and measure the lead time of handling incorrect sales orders in the purchasing process. The empirical research was carried out as a case study by collecting error related data of sales orders released for purchasing, as well as through interviews, an inquiry and by participation-observation in the case organisation.
The research framework described how to improve quality, operational performance, and customer satisfaction by continuous improvement of internal processes by minimizing the order processing costs and improving internal order correctness. The theoretical section was build on the basis of literature on Total Quality Management, Supply Chain Management, Process
Management, Continuous Improvement, Performance Measurement and Information Management.