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Discovering the Business Impacts of a Process
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The team focused on Northwind’s Order Fill process—a process that the business analyst had identified as having the most potential improvement value for the least improvement cost.
Known Process Pains
Within this process, the COE team was especially concerned with two known process pains:
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The cycle time to fill an order |
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The labor cost to fill an order |
The COE team knew that the cycle time to fill an order was excessive. Northwind prided itself on a quick order turnaround, but around 20 percent of orders were not filled in a single day. During periods of high sales volume, the long cycle time caused order backlogs, delaying shipments, and forcing the sales department to decline potential orders. The lost sales and customer satisfaction issues represented a substantial opportunity cost for the company.
The labor time and cost to fill an order was thought to exceed benchmarked industry standards. This was partially due to Northwind’s antiquated Order Management System, which did not interface well with Northwind’s sophisticated Inventory Management System, and required unnecessary labor from the sales staff.
Analyzing the Business Impacts of the Current State Process
While the process pains were quite obvious, the business outcomes of the pains were not. To determine the true business outcomes of the Order Fill process, the team turned to the Order Fill process maps that they had imported into Visio. The team sought to quantify the total labor cost and cycle time for a single iteration of the Order Fill Process. Using this data, they would then be able to calculate the full business impact of the process.
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