A broken business process usually results in difficulty when carrying out business processes. One of the effects caused by a broken business process is high overhead costs, and to cut these costs, the organization must reengineer its business processes. We shall consider reengineering of accounts payable division. Following the recent depression we experienced in our market, we needed to cut the costs of operation. We began the process by scrutinizing some of our departments to establish the inefficient processes. After carrying out in-depth scrutiny, we found out that the accounts payable division was inefficient. The number of clerks in the division was very high. We decided to set ourselves a quantifiable goal. This goal was reducing the number of clerks in the division by a couple of hundred clerks. This step was then followed by a business process reengineering initiative launch. The aim of launching the initiative was to find out why the division was overstaffed.
As-Is Process
According to the current system, the purchasing department sends a copy of the purchase order every time they prepare the order. After receiving the goods, the material control department sends a copy of the related document to accounts payable. The merchant then sends a receipt to the accounts payable at the same time. This system wastes a lot of time because the clerk at the accounts payable division has to match the three orders and issue payment only when the three orders match.
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Merchant
Purchasing
Purchase Order
Accounts Payable
Material Control
Purchase
Order Invoice
Copy Received Goods
Document payment
To-Be Process
According to the new process, the purchasing department will issue inputs as well as an order into an online database. The material control will receive the goods and countercheck with the database to ascertain match with the order. In case of a match, the material control will accept the order on the computer. In this way, it will be unnecessary to match the orders and hence, no need for the clerks.
Database
Merchant
Receiving
Purchasing
Accounts Payable
Purchase Order
Goods
Payment
