Question

DURAPLAST Company Ltd.

DURAPLAST Company Ltd., opened its doors in 1979 as a wholesale supplier of plumbing equipment, tools, and parts to hardware stores, home-improvement centers, and professional plumbers in the Accra-Tema Metropolitan area. Over the years they have expanded their operations to serve customers across the nation and now employ over 200 people as technical representatives, buyers, warehouse workers, and sales and office staff. Most recently DURAPLAST has experienced fierce competition from the large online discount stores such as Qualiplast and Interplast. In addition, the company is suffering from operational inefficiencies related to its archaic information system. DURAPLAST’s revenue cycle procedures are described in the following paragraphs.

Revenue Cycle

DURAPLAST’s sales department consists of 17 full-time and part-time employees. They receive orders via traditional mail, e-mail, telephone, and the occasional walk-in. Because DURAPLAST is a wholesaler, the vast majority of its business is conducted on a credit basis. The process begins in the sales department, where the sales clerk enters the customer’s order into the centralized computer sales order system. The computer and file server are housed in DURAPLAST’s small data processing department. If the customer has done business with DURAPLAST in the past his or her data are already on file. If the customer is a first-time buyer, however, the clerk creates a new record in the customer file. The system then creates a record of the transaction in the open sales order file. When the order is entered, an electronic copy of it is sent to the customer’s e-mail address as confirmation.

A clerk in the warehouse department periodically reviews the open sales order file from a terminal and prints two copies of a stock release document for each new sale, which he uses to pick the items sold from the shelves. The warehouse clerk sends one copy of the stock release to the sales department and the second copy, along with the goods, to the shipping department.

The warehouse clerk then updates the inventory subsidiary file to reflect the items and quantities shipped. Upon receipt of the stock release document, the sales clerk accesses the open sales order file from a terminal, closes the sales order, and files the stock release document in the sales department. The sales order system automatically posts these transactions to the sales, inventory control, and cost-of-goods sold accounts in the general ledger file.

Upon receipt of the goods and the stock release, the shipping department clerk prepares the goods for shipment to the customer. The clerk prepares three copies of the bill of lading. Two of these go with the goods to the carrier and the third, along with the stock release document, is filed in the shipping department. The billing department clerk reviews the closed sales orders from a terminal and prepares two copies of the sales invoice. One copy is mailed to the customer and the other is filed in the billing department. The clerk then creates a new record in the account receivable subsidiary file. The sales order system automatically updates the account receivable control account in the general ledger file.

QUESTION: Suggest ways that the business process inefficiencies could be corrected through business process re-engineering and the use of IT.

Answer 1

DURAPLAST can use the following ways:

1) Duraplast can devlop the accounting software, which can be integrated all the business process like procure to pay, order to cash, Back to Back (B2B).

In present world, there are no of software are available in the market which can be fulfilmthe above requirement mainly available software are like SAP, Navision, Oracle Financial etc. all these software provide us end to end solutions and linkages .

2) There are some things within a business that need to be done in a certain place. DURAPLAST is basically involve in distribution businesses now major distribution businesss are based on Internet of App, DURAPLAST should also developed there own web site of higher some web sites for given the advertisement for the same.

3) DURAPLAST had loads of efficiencies to be gained from thinking in detail about where things happen. Whether it’s reducing manual entry in his logistics team, or giving service engineers the ability to scan barcodes on site to create service tickets, there are lots of areas where things can get more efficient by rethinking the geography associated with where things get done.

4) Bringing people together, sharing ideas, collaborating freely and creatively is the best solution to get sucess in Business,  all great things that can happen in meetings. DURAPLAST can also arrange the frequent meetings for consolidation of all business process for better results.

5) When in any organisation’s business processes have drifted away from your people and systems you end up with a system that’s not fit for purpose, or people who are inefficient in their use of time or how they approach a particular role. We at Duraplast also,  can steer clear of this by reviewing our processes as often as we do for our people.

6) A lot of the time, processes were established to meet what was required of a historic, ill-fitting software product. It can be useful to flex business processes in response to a system innovation opportunity, but we should start with the process first. What would this business process look like if we were designing it to be as efficient as possible today?

7) This is a major one. and this is where the costs can run into the millions. Where managers spend time busying themselves on managing, with no strategic input or indeed direction from the senior leadership team, then that washes through to employees busying themselves on ‘doing’. But what is it they’re doing? It might be things that deliver maximum value to our business, it might be the one thing they’re doing at that time that could bringing in millions more profitable business through the doors. The likelihood is it’s not: it’s probably whatever we feel like doing, whatever makes them look busy, or whatever gets them through the day.

We should underestimate the inefficiencies of poor strategy. Have a clear vision of where we are heading to, and a picture of how we think we can get there. Organise our people and structure around this vision and communicate, communicate, communicate. If we think we have communicated enough, then communicate some more. Make people understand how they fit as part of the vision and help managers to prioritise the time of their teams accordingly. Ensure that any performance related pay, KPIs and task planning accommodates the same notion.

Definately when DURAPLAST, will take the above major he will not be in threat from competetors