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    Reengineer the Process or Use Continuous Improvement?

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    4. An equipment manufacturer has the following steps in its order entry process:

    a. Take the order and fax it to order entry.
    b. Enter the order into the system (10 percent unclear or incorrect).
    c. Check stock availability (stock not available for 15 percent of orders).
    d. Check customer credit (10 percent of orders have credit questions).
    e. Send bill of materials to warehouse.

    The order receipt to warehouse cycle time is typically 48 hours; 80 percent of the orders are handled without error; and order-handling costs are 6 percent or order revenue. Should you reengineer this process or is continuous improvement the appropriate approach? If you choose to reengineer, would you go about it?

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    https://brainmass.com/business/accounting/reengineer-process-continuous-improvement-409851

    Solution Preview

    Reengineering of the process is recommended because of the following:

    1. The warehouse cycle time is too long - it takes 48 hrs or two days before an order is processed. A customer may not want to wait for that long. He would be tempted to look for another company who could process orders more speedily.
    2. Out of the total orders received, 20% are handled erroneously. This percentage ...

    Solution Summary

    The Solution uses the equipment manufacturer example to identify whether continuous improvement or reengineering is the appropriate action.

    $2.19

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