Scribd
Upload
220 views2 pages

Case - Study Week 3 Tutorial Solutions

IBM Credit previously took 6 days to 2 weeks to process finance applications as the paperwork was passed between departments, but the actual processing time was only around 90 minutes. They reengineered the process so a single "deal structurer" now handles each application from start to finish using a new computer system with all necessary tools and data, reducing the turnaround time to just 4 hours while improving productivity 100-fold. Ford's accounts payable department previously spent most of its time tracking discrepancies between orders, receipts and invoices. Ford reengineered its procurement process by creating an online database to record purchase orders and receipts, so receipts are automatically matched and checks issued to vendors, reducing the department headcount from

Uploaded by

joseph
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
220 views2 pages

Case - Study Week 3 Tutorial Solutions

IBM Credit previously took 6 days to 2 weeks to process finance applications as the paperwork was passed between departments, but the actual processing time was only around 90 minutes. They reengineered the process so a single "deal structurer" now handles each application from start to finish using a new computer system with all necessary tools and data, reducing the turnaround time to just 4 hours while improving productivity 100-fold. Ford's accounts payable department previously spent most of its time tracking discrepancies between orders, receipts and invoices. Ford reengineered its procurement process by creating an online database to record purchase orders and receipts, so receipts are automatically matched and checks issued to vendors, reducing the department headcount from

Uploaded by

joseph
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
You are on page 1/ 2

Case Study #1 -- IBM Credit Corporation

IBM Credit financed the computers, software and services sold by


IBM Corporation. Processing a finance application used to take
between six days and two weeks as the application wound its way
from the credit department to the pricing department to an
administrator who wrote out a formal quote letter.

When IBM Credit realized that processing an application actually took


only about 90-minutes and the rest of the normal processing time was
spent with the application sitting on a pile on a specialist’s desk
waiting to be looked at, they decided to reengineer the entire process.

Here’s what IBM Credit did:


 The four specialists who previously processed the application
were replaced by a generalist -- called the deal structurer -- who
processed the application from start to end using templates on
a new computer system which provided all the data and tools
each specialist commonly used.

 For unusual cases, the deal structurer can still call on the
specialists to provide additional expertise. The specialist and
the deal structurer then team up to develop a customized
package as required. This happens only rarely, however.

The results of the reengineering program were:


 Turnaround time was reduced from a typical 7-days to 4-
hours.
 Without any increase in staff numbers, IBM Credit achieved
a hundred fold improvement in productivity -- it handles 100
times the number of credit applications handles before
reengineering was undertaken.

Case Study #2 -- Ford Motor Company

In the early 1980s, Ford looked at its 500-person accounts payable


department closely.
It was soon realized that the majority of each employee’s time was
spent tracking down discrepancies between purchase orders,
shipping receipts and invoices. Ford decided to reengineer the entire
parts procurement process.

Therefore, the steps Ford took were:


 An online database was created of purchase orders.
 Whenever a buyer issued a purchase order, it was entered into
the database.
 As goods are received at the receiving dock, someone checks
the database. If the shipment matches a purchase order, it is
received. If the shipment does not, it is not accepted. Therefore,
there are no possible discrepancies between what was ordered
and what was physically received.
 As soon as the shipment is received, the database is updated
and a check is automatically generated and issued to the
vendor at the appropriate time.

The results of Ford’s reengineering program were:


 Head count in Ford’s purchasing department fell from 500-
people to 125-people at the same time efficiency improved
dramatically.

Case Study #3 – Aldi

Please read through the following link

http://businesscasestudies.co.uk/aldi/competitive-advantage-through-efficiency/lean-
production.html

You might also like