1. Fast Production, Fast Delivery
We conclude this chapter by looking at the time aspect of the order to cash process.
2. Dotted chart
We can have a first high level view by looking at a dotted chart.
3. Dotted chart
In this example, where we have ordered the cases based on their duration, we can clearly see that there are four different types of cases.
4. Dotted chart
Firstly, there are the cases with very few activities, those that don’t seems to take off. These are the cases where a request for quotation was declined by the sales department.
5. Dotted chart
Secondly, there is a small group of cases which take a little bit more time. But we can also see that their ending is markedly different from the other cases. In fact, these are the cases in which an offer is send out, but the offer is never converted in an order.
6. Dotted chart
Thirdly, there is group of cases which have entirely different activities compared to the previous group. These are orders which were received without a preceding offer.
7. Dotted chart
The last and biggest group of cases are those where the last two sets of activities occur both. As such, in these case there is both an offer which is made, and an order which is received and delivered.
8. Process stages
Given these different types of cases, it would make no sense to look at the overall throughput time from start to end of such a long process. Not all orders go through all the different stages of a long process, such that comparing them altogether would be unfair.
A more meaningful approach is to divide the process in stages, and to analyze each of them separately or compare them. By splitting the process in smaller pieces, differences between cases are neutralized.
9. Let's practice!
In the last couple of exercises, we’ll have a closer look into the throughput time for the order-to-cash process.