Volume 7 Issue 5 May 2006
It Begins with a Lean Quote and Order Process
by Steve Cork
In our industry few would deny that getting the product produced consistently and delivered on time is perhaps the single most important—and also the most challenging—aspect to succeeding in business and winning customer loyalty. Most companies work diligently to reduce cost and improve product quality and feature benefits. Yet within the grand scheme, price and product don’t mean a whole lot if you can’t deliver as promised. When it comes to lead times, everyone within the supply chain has their integrity at stake. Make no mistake about it, maintaining lead times is crucial.
This issue begets the age-old question of, “When’s an order an order?” Well that depends on the individual perspective.
For example, your salesperson told a customer it would be four weeks from the minute he signed the contract or faxed the purchase order. But does the supplier’s four weeks include weekends or just business days?
It’s usually pretty obvious when there is a bottleneck in the plant. You purchase some machinery, move some people, reconfigure the plant, build some racks and tables, regulate and control the product flow, and viola, you have done some lean manufacturing. More often, lean manufacturing is achieved by investing in automation and technology. CNC machinery, glass optimization, bar-coding, radio frequency identification and insulating glass lines are just a few of the many solutions utilized on the plant floor.
Don’t Forget about the Front-End
Now that you have the plant fine-tuned, production time is still being lost on the front-end within the quote-to-order process. Isn’t it interesting that even with all of the investment in plant processes you still find that there are just as many “rush” and catch-up orders to make because the order did not get implemented efficiently on the front-end? Often times, the advantages made in the plant are in vain due to the lack of a lean quote and order process.
When comparing the time spent analyzing the complete order process from quote to invoicing, many organizations fail to devote the same amount of time and attention to the all-too critical front-end processes that they devote to the back-end. Like a runner in a race, each and every order requires getting out of the blocks as efficiently as possible in order to make it to the finish line in record time. It needs to get off to a solid head-start.
Front-end lead time is lost for a variety of reasons: unanswered specifications, inadequate pricing, poor math, transposing data, lost faxes, mis-communication in taking phone orders, the use of multiple forms and the details. Re-makes and many service issue orders typically are the result of the same variety of factors.
You may find that often times it is not always the processes that are failing, but that your customers are hindering your ability to process their order efficiently. Help them help you.
One solution is the use of technology on the front-end. Technology in the form of electronic catalogs and guided-selling tools can benefit you and your customers greatly. They create repeatable processes on the front-end just as you have implemented in the plant. Electronic catalogs and guided-selling tools are indispensable in order to achieve the ultra high-levels of expectation and satisfaction with today’s knowledge-rich, point and select consumer. Having repeatable processes in the form of consistent quoting and ordering are almost immeasurable in terms of the positive effects they will have throughout your organization.
Further Eliminating Waste
By making the quote and order process efficient, you eliminate waste for customers in the form of excessive transaction cost.
It is also critical that the quote/order policies and procedures with customers be clearly defined. In particular, policies on changes, cancellations, re-quotes, order cut-off times, holiday schedules and lead times should be in writing and clearly stated on company forms. Your entire organization should speak with one voice when it comes to supporting these policies.
By communicating from the outset how your company does business, along with a lean quote/order process consisting of repeatable processes, you are sure to find that getting orders to the lean-manufacturing facility will be efficient too. Your next dilemma will be how to handle all of the growth from being so successful.
Steve Cork serves as vice president of sales, building products, for Edgenet Inc. in Brentwood, Tenn. His e-mail is email@example.com.
© Copyright 2006 Key Communications Inc. All rights reserved. No reproduction of any type without expressed written permission.