Process Improvement Report - Example
Process Improvement Report
Purpose: This document outlines current inefficiencies identified within the manufacturing process and presents actionable recommendations for performance improvements, quality enhancement, and cost reduction.
1. Report Overview
Prepared by: Christoph Reichert
Date: 8/9/2019
Department: CBR Business System Solutions
Process Assessed: Order to Cash Process (OTC) in Microsoft Dynamics 365 Business Central
2. Identified Inefficiencies
Manual Overdue and Credit Limit Management: System generates warnings for overdue balances and credit limit exceedance that require manual review and acknowledgement by the user to proceed.
3. Root Cause Analysis
Credit Risk Visibility: Salesperson can manually bypass credit and overdue warnings without supervisor intervention, increasing financial risk.
4. Proposed Improvements
Configure automated workflows for credit limit approvals to notify managers via email.: Ensures proper oversight on high-risk orders without manual salesperson intervention.
5. Impact Assessment
Area | Current Impact | Expected Improvement |
|---|---|---|
Financial Risk | Salesperson can manually bypass credit and overdue warnings. | Automated blocking and approval routing for orders exceeding credit limits. |
6. Action Plan
Action Item | Responsible | Timeline |
|---|---|---|
1.1 Open the Customer Record | Sales Representative | Immediate |
1.2 Review the Credit Limit | Sales Representative | Immediate |
1.3 Review Payment and Collections Settings | Sales Representative | Immediate |
1.4 Review Customer Cross-Reference Setup | Sales Representative | Immediate |
1.5 Access Approval Settings | Sales Representative | Immediate |
2.1 Open Sales Orders List | Sales Representative | Immediate |
2.2 Create a New Sales Order | Sales Representative | Immediate |
2.3 Enter the Customer | Sales Representative | Immediate |
2.4 Enter the Customer PO Number | Sales Representative | Immediate |
2.5 Select Item via Cross-Reference | Sales Representative | Immediate |
2.6 Review Overdue Balance and Credit Warnings | Sales Representative | Immediate |
2.7 Enter Shipping Location | Sales Representative | Immediate |
2.8 Enter Ordered Quantity | Sales Representative | Immediate |
2.9 Handle Credit Limit Exceeded Notification | Sales Representative | Immediate |
2.10 Update the Ship-to Address | Sales Representative | Immediate |
3.1 Enter Shipping Agent | Sales Representative | Immediate |
3.2 Enter Shipping Agent Service | Sales Representative | Immediate |
3.3 Enter Package Tracking Number | Sales Representative | Immediate |
3.4 Send Order Confirmation | Sales Representative | Immediate |
3.5 Change Order Status to Released | Sales Representative | Immediate |
4.1 Send Picking Instructions to Warehouse | Warehouse User | Immediate |
4.2 Enter Planned Shipment Quantity | Warehouse User | Immediate |
4.3 Open Item Tracking Lines | Warehouse User | Immediate |
4.4 Select the Lot Number | Warehouse User | Immediate |
4.5 Run Preview Posting | Warehouse User | Immediate |
4.6 Post Shipment and Invoice | Warehouse User | Immediate |
4.7 Review Remaining Quantities | Warehouse User | Immediate |
4.8 Open Related Posted Documents | Warehouse User | Immediate |
5.1 Navigate to Bank Deposits | Accountant | Daily |
5.2 Create a New Bank Deposit | Accountant | Daily |
5.3 Select Deposit No. and Bank Account | Accountant | Daily |
5.4 Enter the Customer Payment Line | Accountant | Daily |
5.5 Open Apply Entries | Accountant | Daily |
5.6 Leave Payment on Account | Accountant | Daily |
5.7 Post the Bank Deposit | Accountant | Daily |
5.8 Review Updated Customer Balance | Accountant | Daily |
6.1 Open Cash Flow Forecasting | Accountant | Weekly |
6.2 Set Cash Flow Date List Parameters | Accountant | Weekly |
6.3 Preview the Cash Flow Forecast Report | Accountant | Weekly |
6.4 Run the Customer Trial Balance Report | Accountant | Weekly |
7. Performance Metrics
Post-improvement performance will be monitored using the following metrics:
Credit Approval Turnaround Time: Average time taken for a manager to approve/release an order that has exceeded the credit limit.
Bad Debt Percentage: Ratio of uncollectible accounts compared to total sales, aiming for a reduction after implementing hard credit blocks.
8. Final Comments
Implementing automated workflows will standardize the credit review process, ensuring that financial risk is managed systematically across all sales transactions. Screenshots of the current manual process are provided in the detailed procedure below.
9. Approval
Approved by: CHRISTOPH
Date of Approval: 8/9/2019
Appendix: Detailed Process Steps
Sequence 1: Customer Review and Preconditions
Validate customer master data, credit limits, and behavior settings before processing orders.
Action 1.1: Open the Customer Record
Navigate to the Customers list from the Business Central homepage and select customer 20000 · Trey Research to open the Customer Card.
Action 1.2: Review the Credit Limit
Locate the General fast-tab on the Customer Card and verify the 'Credit Limit ($)' is set correctly (e.g., 7,500.00).
Action 1.3: Review Payment and Collections Settings
Scroll to the Payments section to confirm the Payment Terms Code (NET 14), Reminder Terms Code (DOMESTIC), and Cash Flow Payment Terms Code (NET 30).
Action 1.4: Review Customer Cross-Reference Setup
Navigate to Navigate -> Customer -> Cross References to ensure customer-specific item mappings are configured for order entry.
Action 1.5: Access Approval Settings
Open the Navigate -> Customer -> Approvals menu to view or initiate any required customer onboarding workflows.
Sequence 2: Sales Order Entry
Initialize a new sales order, select the customer, and populate line items and delivery details.
Action 2.1: Open Sales Orders List
Navigate to the Sales Orders page and use the sorting or filtering options on the 'Sell-to Customer Name' column if needed to find existing records.
Action 2.2: Create a New Sales Order
Click the '+ New' button in the toolbar to open a blank Sales Order entry form.
Action 2.3: Enter the Customer
Type 'trey' into the 'Customer No.' field to search by name and select '20000 · Trey Research' from the lookup dropdown.
Action 2.4: Enter the Customer PO Number
Input the customer's purchase order reference into the 'External Document No.' field (e.g., CUSTOMPO1234).
Action 2.5: Select Item via Cross-Reference
Click into the 'Cross-Reference No.' column in the Lines section, select the customer-specific item (e.g., ABC-123 / Amsterdam Lamp) and verify it populates the internal item number.
Action 2.6: Review Overdue Balance and Credit Warnings
Acknowledge any blue banner alerts regarding overdue balances; click 'Show details' to view specific past-due invoices highlighted in red.
Action 2.7: Enter Shipping Location
In the line items grid, select the appropriate warehouse (e.g., MAIN) from the 'Location Code' dropdown.
Action 2.8: Enter Ordered Quantity
Input the requested order amount in the 'Quantity' field (e.g., 20).
Action 2.9: Handle Credit Limit Exceeded Notification
If a credit limit warning appears, click 'Show details' in the notification bar to review the impact of the new order on the customer's credit threshold.
Action 2.10: Update the Ship-to Address
Expand the Shipping and Billing section, choose 'Alternate Shipping Address' from the 'Ship-to' dropdown, and select the specific destination (e.g., MIAMI) from the list.
Sequence 3: Confirmation, Release, and Carrier Setup
Assign shipping carriers, generate confirmation documents, and release the order for fulfillment.
Action 3.1: Enter Shipping Agent
Click the dropdown in the 'Agent' field and select the designated carrier (e.g., UPS, DHL, FEDEX).
Action 3.2: Enter Shipping Agent Service
Select the specific service level (e.g., GROUND, BLUE, RED-AM) from the 'Agent Service' dropdown.
Action 3.3: Enter Package Tracking Number
Manually input the carrier's tracking identifier into the 'Package Tracking No.' field.
Action 3.4: Send Order Confirmation
Navigate to Print/Send -> Print Confirmation and click 'Preview' in the dialog to generate the official document for the customer.
Action 3.5: Change Order Status to Released
Use the 'Release' menu to change the order status; use 'Reopen' if further modifications are required after an order is released.
Sequence 4: Warehouse Prep, Shipping Execution, and Posting
Generate pick lists, record quantities, assign tracking, and post shipments/invoices.
Action 4.1: Send Picking Instructions to Warehouse
Go to Print/Send -> Pick Instruction to generate the warehouse document showing Item No., Location, and Quantity.
Action 4.2: Enter Planned Shipment Quantity
Update the 'Qty. to Ship' field on the order line (e.g., 15) to reflect the partial or full quantity being fulfilled.
Action 4.3: Open Item Tracking Lines
For tracked items, navigate to Line -> Item Tracking Lines to specify lot or serial number details.
Action 4.4: Select the Lot Number
Click the ellipsis in the Lot No. field and choose the specific available lot from the Lot No. List (e.g., LOTNO1234).
Action 4.5: Run Preview Posting
Navigate to the Posting menu and select 'Preview Posting' to validate GL and ledger impacts before finalization.
Action 4.6: Post Shipment and Invoice
Click the 'Post...' button, select 'Ship and Invoice' from the options, and click OK to process the transaction.
Action 4.7: Review Remaining Quantities
Verify the updated order line showing original quantity, quantity shipped, and the remaining qty to ship.
Action 4.8: Open Related Posted Documents
Use the 'Navigate' menu under Order -> Shipments or Invoices to review the generated posted records.
Sequence 5: Cash Receipt Recording
Create bank deposits to record customer payments and manage outstanding accounts receivable.
Action 5.1: Navigate to Bank Deposits
Transition from the Sales Order list to the Bank Deposits area to begin payment processing.
Action 5.2: Create a New Bank Deposit
Initialize a new Bank Deposit record by clicking '+ New' in the Deposits list.
Action 5.3: Select Deposit No. and Bank Account
Choose the correct number series for the deposit and select the receiving bank account (e.g., CHECKING).
Action 5.4: Enter the Customer Payment Line
Set Account Type to 'Customer', select the specific customer (20000), and enter the check amount in 'Credit Amount' (e.g., 3,000.00).
Action 5.5: Open Apply Entries
Go to Functions -> Apply Entries to view open invoices for the customer that can be matched to the payment.
Action 5.6: Leave Payment on Account
Click OK on the Apply Entries dialog without selecting invoices if the payment is to be left unapplied for later matching.
Action 5.7: Post the Bank Deposit
Select the Posting menu and click 'Post' to finalize the bank deposit and update customer balances.
Action 5.8: Review Updated Customer Balance
Drill down into the customer's balance hyperlink to verify the posted payment and the resulting net balance.
Sequence 6: Cash Flow Analysis and AR Reporting
Run analytical reports to forecast liquidity and review account receivable standings.
Action 6.1: Open Cash Flow Forecasting
Navigate to the Cash Management section and open Cash Flow Forecasts to view liquidity projections.
Action 6.2: Set Cash Flow Date List Parameters
Open 'Cash Flow Date List...' and define the start date, number of intervals (e.g., 6 or 15), and interval length (e.g., 1D or 1W).
Action 6.3: Preview the Cash Flow Forecast Report
Click 'Preview' in the parameters dialog to generate and review the Cash Flow Date List report.
Action 6.4: Run the Customer Trial Balance Report
Use the search icon (Alt+Q), search for 'trial', select 'Detail Trial Balance', and configure the request page filters to generate the report.