[Solved] An Equipment Manufacturer Has the Following Steps in Its Order

Question 23
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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 of order revenue.
Should you reengineer this process or is continuous improvement the appropriate approach? If you choose to reengineer, how would you go about it?


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