Example: Order-to-Cash Process in a Manufacturing Company
Prioritization and Scope-setting:
The order-to-cash process involves multiple steps, from receiving an order, producing the goods, dispatching them, to receiving payment. It's essential for a manufacturing company to optimize this to ensure efficient cash flow, maintain customer satisfaction, and minimize lead times.
Current Scenario (Manual & Semi-automated Process):
- Duration: The entire process takes 30 days on average.
- Errors: Around 5% of orders face issues like wrong product dispatch, delayed shipments, or incorrect invoicing.
- Manpower: 10 employees handle different stages, from order receipt, production coordination, shipping, to invoicing and payment follow-ups.
Process Discovery for RPA:
- Data Collection: The process discovery tool observes the way employees manage different steps across all systems, including ERP, inventory management, dispatch systems, and accounting software.
- Visualization: The tool maps out the entire order-to-cash process, pinpointing areas where delays frequently occur or where multiple manual interactions are necessary.
- Identifying Bottlenecks: The tool detects significant delays in order data entry, invoice generation, and payment reminders.
- Highlight Repetitive Tasks: Repetitive tasks such as manual invoice generation, sending order confirmation emails, and payment follow-ups are spotlighted.
Solution with RPA:
Given the insights from the process discovery, the company decides to prioritize areas that have the most considerable impact on cash flow and customer satisfaction:
- Automated Order Entry: An RPA bot can instantly input order details into the ERP and inventory management system from received emails or online order forms, ensuring faster order processing.
- Invoice Generation and Dispatch: Once the order is ready for shipping, the bot automatically generates an invoice and sends it to the customer via email, reducing lead time.
- Payment Reminders: If a payment hasn’t been received by its due date, the RPA bot sends an automated reminder to the customer and notifies the internal finance team.
Scope-setting:
While the process discovery might reveal multiple areas for potential RPA application, the company needs to define a clear scope for initial RPA deployment:
- Phase 1: Begin with automating order entry and invoice generation. These have a direct impact on lead times and cash flow.
- Phase 2: Once the initial phase is stabilized, expand the RPA scope to automate payment reminders and perhaps even integrate with shipping providers for automated dispatch notifications.
- Phase 3: Explore further optimization areas like production scheduling, inventory optimization, and customer feedback collection.
Benefits:
- Shorter Cycle Time: With automated order entry and invoicing, the order-to-cash cycle reduces from 30 days to an estimated 20-22 days.
- Reduced Errors: Automation reduces manual entry errors, ensuring more accurate orders and invoicing.
- Improved Cash Flow: Faster invoicing and proactive payment reminders improve cash flow.
Using process discovery, the manufacturing company was able to identify, prioritize, and set a clear scope for RPA implementation. This phased approach ensures smooth transition, early ROI, and sets the stage for further automation.