The order entry department of Dano Associated Industries is considering improvements in the order entry process, which includes preparing quotations based on customers' requests (via the sales representative) and processing orders received from customers.A typical sequence of events might begin with a sales representative meeting with a customer to discuss the type of system desired. The sales representative then fills out a paper form and faxes it or phones it in to an order entry associate, who might make several subsequent phone calls to the sales representative, the potential customer, or the manufacturing department to prepare the quote properly. These phone calls deal with such questions as exchangeability of parts, part numbers, current prices for parts, or allowable sales

Question

discounts. Order entry staff then keys in the configuration of the desired system, including part numbers, and informs the sales representative of the quoted price. Each quote is assigned a quotation number. To smooth production, manufacturing often produces systems with standard configurations in anticipation of obtaining orders from recent quotes for systems. The systems usually involve adding on special features to the standard configuration. Production in advance of orders sometimes results in duplication in manufacturing; however, because customers often fail to put the assigned quotation numbers on their orders. When order entry receives an order, the information on the order is reentered into the computer to produce an order acknowledgement. This order acknowledgement is sent to the manufacturing department, which produces the system ordered by customer. When the order acknowledgement is sent to the invoicing department, the information is reviewed again to generate an invoice to send to the customer.Enrique Ramos, the order entry manager, has received many complaints from the order entry department's internal customers regarding quality and timeliness problems, and is considering ways to improve the efficiency and quality of the order entry process.Required:(a) Develop some indicators that Ramos could use to assess the performance of the order entry process.(b) List four possible errors that might be found in the quote and/or the order acknowledgement (i.e., the outputs of the order entry process).(c) What do you think are the likely causes of delays and quality problems?

What will be an ideal response?

Answer 1

(a)
Ramos could use several indicators to assess the quality of the order entry process in this company. Examples include: number of errors, percentage of errors (number of order acknowledgements with errors divided by total number of order acknowledgements), number of change orders, change order costs, total quality costs.

(b)
Errors that can be found on either of the two output documents: 

? Incorrect part number(s) 
? More than one part number when only one is required 
? Missing part number(s) 
? Incorrect sales tax calculation 
? Incorrect business unit code 
? Freight terms missing 
? Incorrect shipping or billing address 
? Credit approval missing 
? Incomplete/incorrect information provided by the sales representative 
? Order entry staff not having updated information from marketing regarding prices, discounts, etc. 

(c)
Causes of delays and quality problems include:
The primary cause is poor communication:

? Incomplete/incorrect information provided by the sales representative 
? Order entry staff not having updated information from marketing regarding prices,
discounts, etc. 
? Incorrect entry of order by staff