Process Reengineering for the Revenue Value Chain

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One of our client internal sales process was very lengthy and it was taking 81 days on average from the time a business opportunity was confirmed with a client to the time a working solution was in place. During this time frame, our client could not invoice its own client, resulting negative cash flow impact and more importantly, the inability — due to the very large sums involved, to earn additional revenue on interest alone (time value of money).

For this particular project, an end-to-end process map had to be developed across specific ‘touch point’ departments and address (a) people, (b) process, (c) technology and (d) inter-department communication.

BvW Global reduced the cycle days by 71% reaching revenue turn on savings of $5.4 million and productivity improvement of $2.9 million.

Insight

Competitive advantage is realised by managing your internal customer-oriented processes (i.e. Operations & Logistics, Administrative Support, Customer Order Acceptance and Fulfillment)… and other non-linear linear functions (i.e. Procurement, Accounting, Distribution).

“BvW Global approach departs radically from traditional thinking with identifying “core” processes that cut across functional, geographic, and business units.”

While core business processes will differ from company to company, they all have one thing in common: they are the inherent basis of a company’s competitive position and, effectively redesigned, can produce new competitive distinctions.

Traditional improvement initiatives are often process-oriented, but they tend to be defined within a narrow scope, in a linear, functional way. BvW Global approach departs radically from traditional thinking with identifying “core” processes that cut across functional, geographic, and business units. Each core process is being initiated by a (internal) customer and ending when a need is satisfied.

We define (internal) customer “value” criteria as:

  • Quality such as meeting (internal) customer requirements, process integrity, minimum variances, elimination of waste, elimination of duplication, continuous improvement;
  • Service such as (internal) customer support, product service, product support, flexibility to meet internal/external demands, flexibility to meet market changes;
  • Cost such as quality assurance, auditability, distribution, administration, inventory, materials management;
  • Cycle time such as time to market (concept to delivery, order entry to delivery), response to market forces, lead time (design, engineering, conversion, delivery), materials, inventory.

Examples of core business processes include:

  1. Order to delivery to cash
  2. Product concept to design and development to marketing to purchase
  3. Service requisition to service delivery to receipt of payment

By taking an internal or external customer-centric (and/on consumer-centric) view of processes, we are able to redefine the optimal processes and technology enablers. And by adding costing methodologies such as Activity-Based Costing to monitor the commercial value of a particular activity within a process, and a process amongst other processes, we are able to create competitive and truly profitable organisational designs.

For more information or enquiries on “Profitable Process Reengineering”, please contact us to discuss if any opportunities exist within your organisation.

 

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