Additionally, by eliminating this step, one of the employees will be able to spend 25% of his or her time in the batch process and the final inspection step. This will decrease utilization from 106. 25% to 85%. Another employee from the PR check, in the Accounts Payable Department, can be used to elevate the bottleneck. In this case, the bottleneck is the “Enter Into Pay Now Process” step. By moving one person here for 25% of his or her time, the utilization decreases from 106. 22% to 84. 97%.
Likewise, we recommend that you eliminate the check for the POP tepee in the mailbox, because Bill has stated that, “Fortunately, we don’t really get any invoices without valid POP numbers on them. ” This will decrease total processing time by two minutes and lead to a leaner system. The current Value Stream Map also shows where waiting occurs and helps determine where waiting time can be eliminated or decreased. One recommendation to lessen waiting time is to negotiate with mail delivery to decrease the time it takes to receive mail to 2 days.
Offering incentives to suppliers to change and/or strictly abide by the electronic PER process could also lower waiting time in this step. This will cut down on the amount of paper invoices that the department has to process. We also recommend that the time waiting for invoices to travel from the Mail Department to the Accounts Payable Department be decreased to one day by adding in a FIFO Lane. Our final recommendation for cutting wait time is to check the “to pay later invoices” once every 5 days instead of every 15 days.
This will decrease the demand and therefore decrease the processing time. A Parent chart was created in order to further analyze the types of errors most frequently eating to supplier complaints (Appendix I, Parent Graph of Errors). It represents the most common mistakes and shows which errors would cover most of the problems that lead to the failure of the process. From the Parent Chart, we can interpret that the number one problem is “paid late,” and out of our sample of 631 errors, 54. 20% of them are due to late payment.
Additionally, among the 16 error types, the first 5 on the Parent Chart contribute to 78. 29% of the total percentage. Therefore, our recommendation is to concentrate on solving these five problems. These five errors include “paid late,” as stated before, “checks sent without invoice reference,” “payment never made,” “wrong invoice message,” and a category labeled “other. ” A p-chart was created in order to determine whether or not the process Of PR checking was in control (Appendix II, Quality Control P-Chart).
A total of 618 errors were found from a total of 33,800 observations over a 26-week time period. The upper Control Limit was found to be 2. 94% and the Lower Control Limit was found to be 0. 71%. The control chart revealed that by conventional standards, the process is out of control. The proportion defective for Week 12 fell below the LLC at 0. 46%. The proportion defective for Week 8 is also an outlier at 2. 92%, which is nearly at the Upper Control Limit.
The operations in Weeks 8 and 12 should be investigated to find the cause behind these extreme values and account for any special circumstances. These data points imply that the mailbox process needs improvement to ensure that fewer invoices are sent to Accounts Payable, which are actually PR-R. Our recommendation is to improve the efficiency and accuracy of the PR checking process. Since some suppliers are running on counting software, and because it is often too expensive for smaller suppliers to change their system, it would be practical to make a change in the process and not the system.