Revenue acceleration on equipment sales

Business Issue:

During the past calendar year, the Sales to Cash Interval for Equipment Business Sales was an average 4 months. This gap of 1 month from the business objective represents $550,000 of potential cost savings.

Process Problems

Problem Statement:
The year’s average time of Install to Invoice posting for configured control units was 18.3 days. This gap of 8.3 days from the 10 day Base Case standard represents non-value added activity and is COPQ worth an estimated $420K/year in delayed revenue.

Customer Needs (CTQ’s)

This project will increase: customer satisfaction, accuracy and timeliness of customer billings, forecasting accuracy, and reduce internal costs.

Solutions Implemented

• Lotus notes database for monitoring overdue completions
• operations updates completions directly into systems
• technician next day update of order

Results of Action

The year-to-date process capability has been improved by 26%; the overall process is out of the base case specification 47% of the time versus 64% year over year resulting in $382,500 in annual cost savings.

Tools Used

• Process Maps
• Cause & Effect Diagrams
• FMEA
• Chi-square
• Regression Analysis
• Capability analysis
• Pareto analysis