OTC Process

Current/Future State Analysis

September 15, 2010 Confidential

Project Scope & Process Analysis Summary Order to Cash

Credit Order Mgmt.
Process Customer Orders

Invoicing

Cash Applications
Cash Application & reconciliation Upfront Deduction Research

A/R & Collections

Other

Credit Review

Invoicing & Issue Management Revenue Recognition

Aging Reporting Credit/Debit Memo Incentive Adjustment Refunds and Unclaimed Research

POS Reporting Disti Inventory Recon

Pick, Pack, and Ship

Legend
Out of Scope In Scope

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Key Observations/Challenges
# Key Themes

Observation/Challenge
70%-90% of steps reviewed are manual Cash application process requires reconciling each remittance detail to the payment amount. Analyst must review each line item before applying payment. 40% of customers receive a manually distributed invoice. Invoice is either uploaded to customer website, printed then mailed, or scanned and emailed. Credit review is completed by entering financial data in Excel template prior to completing credit check. The majority of OEM and Disti rebates are analyzed, verified, and processed using Excel. Tracking of pricing accruals for OEMs is done using Excel.

Large amount of manual processing

Weekly Statement of Account is created in Excel.

Weekly inventory and point of sale reports submitted by Disti frequently do not match with Client X tracked inventory levels. Each discrepancy must be reviewed, researched, and clarified with Disti. Any discrepancy between Disti and Client X point of sale and inventory reports creates additional processes when executing price protection, rebates, and revenue recognition. Disti and OEM short pay their invoices. This triggers a timeline of reconciliation processes that includes multiple departments. Reconciliation must occur before account is reviewed with customer and cleared. Lead time in processing, researching, and approving Credit/Debit memos is a primary cause of short payments. Lead time can be anywhere from 1-30 days.

Revenue recognition and rebate process requires tracking of Disti inventory

Short payment of invoices leads to additional reconciliation processing

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Key Observations/Challenges (continued)

# Key Themes

Observation/Challenge
Client Xs pricing structure for Disti and OEMs leads to creation of numerous credit/debit memos in order to reconcile revenues. Any modification of a customer account balance must go through the credit/debit memo process, resulting in the consumption of a large amount of resources. Approximately 4,285 CMR/DMR created within the last six months (with 33,125 line items). Finance organization is currently responsible for linking end customers to appropriate Distis. This is completed in order to process commissions and PPP rebate program. Distributor inventory reporting and reconciliation process is typically is not included in the OtC process. This activity consumes extensive resources within Disti Ops.

Extensive amount of Credit/Debit Memos processed due to balance changes in customer accounts

Non Finance related processing is included in the order to cash process

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Template Guide
Description
Narrative of the process being reviewed. This should illustrate the main points that are detailed in the flowchart.

Process Walk
Key Process Related Metrics Number of Groups Impacted: Groups impacted via process (e.g. - # of swim lanes) Number of systematic/manual steps: Summarization of manual vs. systematic steps Systems utilized in process: Different systems or modules used to perform process

Current Pain Points

# ID #

Pain Point Description of non-standard process or issue impacting process

Quantification Supporting data to size pain point

Priority (H,M,L)

Impacted Users Groups that would be impacted by a process change

Legend
Priority High Required to achieve process efficiency Will have a moderate impact on process efficiency

Medium
Low

Minimal to no impact to efficiencies

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Credit Credit Review

Credit Review Process Overview

Description
The credit management team processes financial information of both new and existing customers to establish or reestablish the credit limit and credit risk codes. Based on analysis from credit managers, the credit team will apply appropriate credit risk to each new customer. Existing customer credit is also review annually or can be triggered when violation of credit agreement occurs. Some overrides occur for strategic customers. This manual process requires the credit manager to key into an Excel spreadsheet the financial data of each customer. The Excel spreadsheet analyzes the financial information and provides the credit manager with a recommended credit limit and risk code, which is submitted to management for approval. The credit manager relies on rules stated in Sales Credit Policy 1810 and must escalate approvals for credit limit increases through the approved channels.

Process Walk
Key Process Related Metrics Number of Groups Impacted: 2 (Credit, Sales) Number of systematic/manual steps: 2 Systematic / 5 manual Systems utilized in process: SAP (Financials input into Excel)

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Current Pain Points

# C1 C2

Pain Point Manual application and tracking of credit information using Excel Unclear application of decision rights for credit terms

Quantification 300 Hours/Year per FTE N/A

Priority L M

Impacted Users Credit Credit

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Credit

Credit Maturity Model

Process
Credit

Stage 1
High number of credit notes are handled without a policy No pre-check of the customer creditability No follow-up on the collection of the outstanding invoices No formal credit policy leading to increased credit risk exposure

Stage 2
No pre-check of the customer creditability Add - hoc follow up on the collection of the outstanding invoices Credit management is applied consistently in a manual process, with some increased credit risk exposure

Stage 3
Customer terms and conditions are established by the Credit Risk Department Credit management is automatically applied based on a clear policy Credit notes are approved based on a formal policy and automatically applied in the system

Stage 4
Credit risk management information highly integrated into the broader customer relationship management activities Integration of external credit ratings Credit notes are approved based on a formal policy and automatically applied in the system

Client X Current State

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Order Management Order Management

Order Management Overview

Description
Customer orders are processed as one of the following: Order Type Vendor Managed Inventory (VMI) Customer Strategic OEM Description Third party owned warehouse with Client X owned inventory. Invoice is processed after product has been picked up by customer. Inventory is stocked at VMI based on sales forecasts.

Material Reservation (MR)

OEM

Client X owned warehousing with Client X owned inventory. Invoice is sent upon delivery of product. Inventory levels must be checked before shipment of product. Inventory is stocked at MR based on sales forecasts.

Standard Order (ZOR)

OEM and Disti

Inventory is shipped from default warehouse based on where the material originated. IT system is limited in determining closest location of inventory and automatically changing shipping location to nearest in-stock warehouse. Typically end-of-life products sold at the end of a quarter. Regulations in place dictate what products and which Distis can participate.

Buy/Sell Order

Disti

Standard purchase orders can be submitted through EDI or a web portal but more than 65% are submitted through email or mail. As contract pricing changes, OM is responsible for updating the pricing in SAP. If OM does not receive the new pricing terms before an item ships, a billing error occurs. This leads to short payments by the customer that must be reconciled after payment occurs.

Process Walk <Embedded object removed & put with the main attachment as 03_OM Stanard OrderProcess Flow (3)_c.vsd> <Embedded object removed & put with the main attachment as 04_OM VMI_ MR Process (4)_c.vsd>
Key Process Related Metrics Number of Groups Impacted: 1 (Order Management) Number of systematic/manual steps: 4 Systematic, 11 Manual Systems utilized in process: SAP: ATP

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Order Management Order Management

Order Management Process Overview

Current Pain Points
# OM1 OM2 Pain Point Stale pricing in SAP creates billing errors in invoices. This results in short payments. Customers submit POs primarily through email. These POs must be manually verified, processed and approved. Price changes are batched in the system every Friday. Because of the time zone difference between US and Penang, Penang does not have adequate time to process price changes, resulting in incorrect pricing for orders processed, causing downstream issues. First through put for order entry is approximately 20% Quantification N/A 66% email submission N/A Priority H L Impacted Users AR, OM OM

OM3

OM, AP

OM4

N/A

OM

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Order Management

Order Management Maturity Model

Process
Order Management

Stage 1
Multiple customer master systems in use with gaps in data and low data quality Master data manually maintained by the functions and manually updated in the ERP system Master data is manually completed by each function and manually updated in the ERP system

Stage 2
Multiple customer master systems in use with gaps in data and low data quality Master data updated directly in the ERP systems by the relevant functions Accounting reviews and validates all changes

Stage 3
Multiple customer master systems in use Master data updated in the system by the relevant functions; centralized function owns definitions Centralized function owns definitions, templates and quality assurance on all customer master data

Stage 4
Single organization wide master file is in place and integrated with the wider customer relationship management applications Master data updated in the system by the relevant functions, Quality assurance performed by accounting Customer has access to update the system

Client X Current State

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Invoicing

Invoicing

Invoicing and Billing Management Process Overview

Description
Trade Invoicing After an order is shipped to the customer SAP automatically creates an invoice. This invoice can be delivered in multiple ways: 1. SAP Auto Email SAP will send a .pdf copy directly to a customer. 46% of customers accept this SAP feature.

2. Electronic Data Interchange (EDI) Less than 10% of customers receive invoices through EDI.
3. Manually Printed 40% of customers receive some type of paper invoice either as a standalone invoice or in combination with one of the systematic processes. 4. Third Party Processing Hewlett Packard, Client Xs largest customer, requires that all invoices be processed through OB10, a third party electronic transfer company. Non-Trade Invoicing Frequently Client X must create non-trade invoices for sales of tools, sales of scrap materials, subleasing, royalties paid, and services provided to 3rd parties. Each invoice is created in SAP.

Process Walk
Key Process Related Metrics Number of Groups Impacted: 3 (AR, Logistics, Disti/Customer Ops) Number of systematic/manual steps: 1 Systematic / 8 Manual Systems utilized in process: SAP, EDI, OB10

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Invoicing

Invoicing

Invoicing and Billing Management Process Overview

Current Pain Points

#
I1

Pain Point
Customers request paper billing requiring A/R to mail, upload to customers web portal, or scan and email invoice to customer. Inability to send parts of a single invoice to separate contacts through SAP results in manual processing. Credit is not alerted of EDI fall our errors.

Quantification
40% of customers totaling 15% of billings N/A

Priority
H

Impacted Users
AR

I2

AR

I3

N/A

Credit

I4

AR is unable to systemically re-email an invoice in SAP causing them to manually re-email the invoice if requested by the customer.

N/A

AR

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Invoicing Revenue Recognition

Revenue Recognition Process Overview

Description
Revenue recognition requirements are different for distributors (Distis), AIB, and OEM customers. Differences between the three customer bases include: Disti Revenue is recognized at the point when the Disti resells the inventory. 1. Distis are invoiced at the Distributor Best Buy (DBB) price at the point of sale. 2. Distis pays 100% of the invoice amount within the payment terms. 3. As prices fall through the product life cycle, Client X insulates the Disti from any reduction in market price for any in-stock inventory by crediting back the difference between the original DBB and the new market price. 4. When the inventory is sold, Client X recognizes the net revenue and begins the rebate process.

AIB Revenue is recognized at the point inventory is resold and price is protected for three weeks after initial sale.
OEM and Disti Buy/Sell Agreements Revenue is recognized at the point of sale. The delay in recognizing the Disti and AIB revenue creates numerous sales tracking, inventory tracking and reconciliation processes downstream.

Process Walk
Key Process Related Metrics Number of Groups Impacted: 7 (Invoicing, AR, Disti Operations, OEM Claims, Credit, Sales, Business Operations) Number of systematic/manual steps: N/A Systems utilized in process: N/A

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Invoicing Revenue Recognition

Revenue Recognition Process Overview

Current Pain Point
# RR1 Pain Point Revenue recognition approach forces Finance to track inventory owned by the distributor Quantification N/A Priority H Impacted Users Invoicing, AR, Disti Operations, Credit, Sales, Business Operations

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Invoicing

Invoicing Maturity Model

Process
Invoicing

Stage 1

Stage 2

Stage 3

Stage 4

Multiple billing Some use of Significant use of Full use of automated procedures and systems automated billing automated billing billing systems, fully in use, including systems systems with integration integrated with extended significant amount of Some integration to to extend customer customer relationship manual billing activity extend customer relationship management management relationship applications such as applications management order management Where appropriate sales applications such as systems invoices are transmitted order management Some use of electronic electronically to systems billing with customers customers Minimal or no use of electronic billing with customers

Client X Current State

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Cash Application Cash Application

Cash Application and Reconciliation Process Overview

Description
Customers submit payment to Client X through one of three ways: Type of Payment Wire Transfer Payment Description Customers will submit payments through wire transfers. All remittance details are not transferred from customer to Client X due to character limitations in banking statements. Although remittance details are included, processor must still manually confirm and clear each payment. All remittance details are included with payment but processor must manually confirm and clear each payment.

Automated Clearing House (ACH) Lockbox

For exception processing, once payment is received there are up to six handoffs that can occur between AR and Credit to gather any unidentified remittance details and resolve any discrepancies to clear each payment.

Process Walk
Key Process Related Metrics Number of Groups Impacted: 3 Groups (AR, Credit, IT) Number of systematic/manual steps: 1 Systematic / 11 Manual Systems utilized in process: SAP

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Cash Application Cash Application

Cash Application and Reconciliation Process Overview

Current Pain Points
# CA1 Pain Point Wire payment information from bank does not include remittance details. AR must go through Credit to receive remittance details. Quantification 1-2 Days to get remittance details from credit manager to AR 18,000 Line items cleared per month Priority H Impacted Users AR, Credit

CA2

AR must clear each invoice against payment by manually clicking on each line item in SAP.

AR

CA3

For payment discrepancies, AR has to contact Credit, provide Can take up to one charge out/line item information, and wait for reconciliation month to clear due to details before they can offset payment. credit memo AR must manually create a line item for each charge out that occurs. 500 Charge outs created each month

AR, Credit

CA4

AR

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Cash Application Upfront Deduction Research

Upfront Deduction Research Process Overview

Description
Distributors and some OEMs, including HP, Dell, and Acer, frequently short pay invoices for a number of reasons including: Pricing or billing error Rebates earned but not yet credited to account Shipping error Return material authorization (RMA)

Each short payment must be researched and reconciled through the credit/debit memo (CMR/DMR) process in order to clear the customer account. Although AR processes the CMR/DMR, each division responsible for the claim must verify, validate, and give final approval to release the claim. To help track the reconciliation process, AR created e-DAR (Disti Accounts Receivable). The system allows AR to manually input the CMR/DMR data and notification is sent to each department where verification is needed. AR can then check each reference number to determine if verification is complete.

Process Walk <Embedded object removed & put with the main attachment as 08_Upfront Deduction Research_c.vsd
Key Process Related Metrics Number of Groups Impacted: 6 (AR, Credit, Returns, Disti Ops, Inside Sales, Order Management) Number of systematic/manual steps: 12 Manual Systems utilized in process: SAP, e-DAR (Disti Accounts Receivable)

Current Pain Point

# UD1 Pain Point Long lead time on the validation of each short payment causing a delay in the clearing of the customer account. Quantification N/A Priority H Impacted Users AR

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Cash Application

Cash Application Maturity Model

Process
Cash Application

Stage 1

Stage 2

Stage 3

Stage 4
Mechanisms for electronic cash receipts are in place, with high utilization Lockbox functionality may be in use to improve processing of cash receipts Automated routines are in use for posting cash receipts to accounts and invoices

Cash receipts mostly Mechanisms for Mechanisms for received manually, high electronic cash electronic cash receipts amount of checks, receipts are in place, are in place, with average minimal use of electronic however utilization of utilization cash receipts systems remains low Lockbox functionality Cash receipts posted to Lockbox functionality may be in use to improve customer accounts may be in use to processing of cash manually improve processing of receipts cash receipts Automated routines are Automated routines in use for posting cash may be in use for receipts to accounts and posting cash receipts invoices to accounts and invoices

Client X Current State

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A/R and Collections Aging Reporting

AR Aging Reporting Process Overview

Description
On a weekly basis credit managers create and send to each customer a Statement of Account (SOA) detailing any account activity, including outstanding invoices. Each SOA is manually created by downloading the account activity out of SAP, and the report is customized in an Excel spreadsheet. The credit manager works to collect any delinquent payments and decides what course of action to take if they are unsuccessful. Each month all delinquent payments are reviewed and those deemed uncollectable by the credit manager are moved to the Allowance for Doubtful Accounts (AFDA).

Process Walk <Embedded object removed & put with the main attachment as 09_AR_Aging_Analysis_c.vsd>
Key Process Related Metrics Number of Groups Impacted: 1 (Credit) Number of systematic/manual steps: 0 systematic / 9 Manual Systems utilized in process: SAP: BW (Business Warehouse), R3

Current Pain Points

# AR1 Pain Point Manual creation and customization of SOA for each customer. Quantification 20+ different forms within Excel Priority M Impacted Users Credit

AR2

Credit manager manually calls each customer, sales team, RMA team, and/or Disti Ops/OEM team to determine reason for any delay in payment.

N/A

Credit

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A/R and Collections Credit/Debi t Memo

Credit/Debit Memo Process Overview

Description
The credit/debit memo request (CMR/DMR) process is used extensively throughout the order-to-cash process. A CMR/DMR can originate within a number of departments, but AR is responsible for processing all CMR/DMRs except OEM rebates. The requestor will key into a standard template the details of the CMR/DMR and provide AR with all supporting documentation and departmental approval. Once processed, the CMR/DMR is routed back to the originating department for final approval and block release. The numerous reasons for creating a CMR/DMR, combined with the layers of approval required and manual execution throughout the process, results in the consumption of a large amount of resources.

Process Walk <Embedded object removed & put with the main attachment as 10_Credit and Debit Memo Process Flow_c.vsd
Key Process Related Metrics Number of Groups Impacted: 6 (OM, Sales, OEM Claims, Disti Ops, Sales Finance, AR) Number of systematic/manual steps: 0 Systematic / 5 Manual Systems utilized in process: SAP

Current Pain Points

# Pain Point Quantification Priority Impacted Users

CD1

The creation of CMR/DMR for multiple products requires multiple line items which increases the level of effort required for creation.
Each CMR/DMR has to be manually researched and verified by the requestor in order to be processed.

N/A

TBD

AR, OM, Sales, OEM Claims, Disti Ops, Sales Finance

AR, OM, Sales, OEM Claims, Disti Ops, Sales Finance

CD2

4,285 CMR/DMR created over the last six months (33,125 line items)

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A/R and Collections Incentive Adjustments

Revenue and Incentive Adjustment Process Overview

Description
Client X currently provides revenue and incentive adjustments to both Disti and OEM customers. Disti Adjustments Price Protection Rebates/Claims Discounted Price Authorization (DPA) Standard Rebates Bonus Based Program (BBP) Each customer negotiates an end price to pay for each product. Disti is billed at the current market price (DBB) and rebated the difference between the market price at time of sale and their agreed upon DPA. Traditional volume discounts are standard across all distributors. This program is scheduled to be phased out by the end of 2010. Performance based rebates are customized for each Disti to reach specific sales targets. As prices drop Disti is rebated the difference between original DBB and new DBB.

Disti adjustments require extensive sales and inventory tracking through weekly reporting. OEM Adjustments Rebates Price Masking MPU Rebate Design Win Award Rebate Radeon Advantages Program OEM Standard Rebate

OEM incentive programs require OEM Claims to upload pricing terms, maintain accrual calculation, and verify all claims. Currently, a program is in development (COMPETE) to automate the pricing and accrual portion and is expected to go live by the end of 2010.

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A/R and Collections Incentive Adjustments

Revenue and Incentive Adjustment Process Overview

Process Walk <Embedded object removed & put with the main attachment as 11_Claim Process Flow (3)_c.vsd>
Key Process Related Metrics Number of Groups affected: 2 (OEM Claims, Disti Ops) Number of systematic/manual steps: 3 Systematic, 22 Manual Systems utilized in process: CRM, SAP R3, SAP BW

Current Pain Points

# IA1

Pain Point Customized OEM rebate agreements and lack of supporting documentation from sales team lead to validation issues and delays in processing credits to customer accounts. Manual processing of OEM claims throughout the system, including calculating accruals and rebate amounts, creates delays in accrual and validation process. BBP rebates are calculated quarterly and Standard rebates are calculated weekly using an Excel spreadsheet. Programs vary by region and use locally focused spreadsheets that then feed the master spreadsheet for all of Client X. When DPA rebates are rejected , a lot of manual effort is required for validation due to multiple systems and organizations that have to be contacted and information verified.

Quantification 1-2 Claims validated per day per employee

Priority H

Impacted Users OEM Claims

IA2

N/A

OEM Claims

IA3

N/A

Disti Ops

IA4

N/A

Disti Ops, OM

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A/R and Collections Unclaimed Research

Unclaimed Credit Research Process Overview

Description
Credit balances that remain in customer accounts are tracked by the credit manager. After 90-180 days, the credit manager will contact sales to determine if customer is still active. If inactive, the credit manager will start the process to return credits through a BSPR. A number of credits remain unclaimed after two years. These aging credits, which currently total approximately $250,000 (2007 credits), are reviewed once a year by AR. When a credit remains unclaimed for greater than two years, AR will contact Credit to investigate the credit and determine whether to submit refund, escheat to the state, or have customer utilize the credit.

Process Walk <Embedded object removed & put with the main attachment as 12_Unclaimed Credit Process flow_c.vsd>
Key Process Related Metrics Number of Groups Impacted: 3 (AR, Credit, Tax) Number of systematic/manual steps: 0 Systematic / 10 Manual Systems utilized in process: SAP

Current Pain Point

# UCR1

Pain Point Credit manager must research credit balances which requires extensive time and effort.

Quantification N/A

Priority L

Impacted Users Credit

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A/R and Collections

A/R & Collections Maturity Model

Process
A/R & Collections

Stage 1

Stage 2

Stage 3

Stage 4

Long process cycle time, Cycle time is still Benchmark-level process Minimal cycle times with linked to high degree of slowed down due to a cycle times generating close to zero error rates manual process steps, number of manual data and processing and full visibility of all low visibility of data, and process steps and information with a high process related limited availability of multitude of nondegree of accuracy and information enabling technologies integrated enabling integrity Collections activity Collections activity system Collections activity managed using managed without Collections activity conducted in a structured appropriate supporting technologies conducted in a manner, with use of technologies to prioritize Limited or no use of risk structured manner account or risk collector activity profiling or account with limited use of prioritization and use of Use of account or risk prioritization enabling technology enabling technology prioritization and Some use of account extensive use of or risk prioritization enabling technology such as collections management tools and trend analysis tools to identify delinquency root cause

Client X Current State

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Other Inventory Reconciliation

POS and Inventory Reporting Process Overview

Description
Distis must submit weekly Point of Sale (POS) and inventory reports to the Disti Operations team to track resale. Client X must track the inventory levels of Disti for three reasons: 1. Revenue can not be recognized until the Disti has sold the product. 2. Distis are entitled to price protection based upon the difference between the original DBB and current market price. 3. Disti earn incentives (DPA, Standard Rebates, and BBP) based upon contract term and sales figures. Each week Client X receives inventory reports detailing what product and amount was sold by the Disti. Once the report is received, Client X must: 1. Verify accuracy of the sales numbers. 2. Compare inventory levels reported by Disti to inventory levels tracked in SAP. 3. Crosscheck with OM and/or Sales/Disti to confirm returns or shipments. Disti Ops also ensures that each end customer is grouped to an Client X ID number in RLKlite in order to properly process sales commissions and PPP (PEAK Performance Plan) rebates.

Process Walk
Key Process Related Metrics Number of Groups Impacted: 3 (Disti Ops, Sales, Order Management) Number of systematic/manual steps: 3 Systematic / 6 Manual Systems utilized in process: SAP R3, CRM, SAP BW, RLKlite

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Other Inventory Reconciliation

POS and Inventory Reporting Process Overview

Current Pain Points
# PIR1 Pain Point Process to verify all information provided by Disti is manual. Processor must contact each department, research any discrepancies, and report back to Disti. IT system that Disti upload reports to is unreliable and tends to crash around month-end. This leads to frustrated customers and inaccurate revenue recognition. Movement of inventory by Disti from one location to another causes discrepancies when reconciled with Client X tracked inventory levels Quantification N/A Priority H Impacted Users Disti Ops

PIR2

N/A

Disti Ops, Sales, Sales Finance, Customer Disti Ops

PIR3

N/A

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OTC Future State Discussion

Process Area
Credit

Maturity Rating
2.25

Best Practices Gaps

Full business evaluation (e.g. future prospects) of current and potential customers is not performed prior to applying credit risk. Pricing information tables not maintained in a timely manner resulting in stale pricing within SAP. Customer contract information lapses from one quarter to the next. Promotion, rebate, and discount programs change frequently. Manual distribution of invoices (40% of customers). Multiple hand offs after cash is received to clear payment against customer account.

Order Management

Invoicing

1.5

Cash Applications

Manual tracking and evaluation of rebate programs.

No automated procedures for applying payment to customer account. Manual processing of CMR/DMRs. Lack of process discipline related to late payments. Long cycle time due to complex rebate programs. No structure or technologies utilized in collections process. Past due payments are tracked and analyzed using Excel spreadsheets.

A/R and Collections

1.5

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Brainstorming Ideas from Penang and Austin Workshops

Process Area OTC Process Short Description
IT Infrastructure External Portals Front-end Finance Involvement Credit Review Credit External Portal

Future State Solution

Review if current IT system, including SAP, can provide the proper foundation to support growth. Unify customer experience by standardizing all external portals that customers interface with. Strategically involve Finance from the start of the decision making process in order to ensure decisions do not have negative back end consequences within the Finance organization.

Priority Ranking
M M H

Difficulty to Implement
H H M

Overall

Create system allowing customers to upload and verify financial information remotely to perform credit checks. Create reporting functionality to analyze customer metrics.

Credit Review

Automation system (semi)

Workflow and all relevant information (e.g. credit limit, credit review & etc) is systematically updated into customer master. Credit note approvals to be automated. Adopt B2B (Business to Business) or some other electronic system for transmission of invoices (how to make it happen?) Automatically set invoice format to meet the local statutory requirements. Modify SAP to allow for multiple recipients for different billing Doc type (Invoice, CN). Automate Cash Application posting directly to customer account by clearing each correct invoice against payment on each line item in SAP. Auto create a line item if there is upfront deduction and/or any price discrepancies. Create internal Client X commitment (rebates & RMAs) on the lead time of issuing credit memo Include language in policy and sales agreement that prohibits customers from taking upfront deduction.

Invoice Processing Invoicing

Automate Billing Method

Cash Application

Automate Cash Application

Cash Application

Upfront Deduction

1. Lead time commitment 2. Policy changes

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Brainstorming Ideas from Penang and Austin Workshops

Process Area OTC Process
Incentive Adjustments Order Mgmt. Incentive Adjustments Statement of Account Rebates OEM/Disti SAP Automation

Short Description
Rebates OEM/Disti

Future State Solution

Review rebate agreements in the incentive playbook to ensure organization adheres to the playbook. Involve Finance leadership when designing rebate programs to ensure program is operational. Review current rebates in playbook and ensure they are automated in SAP. Create SAP reporting tool that auto populates data for SOA and auto pushes statement to customer on a weekly basis. Documentation of customers' communication tracked within the system. System prompt for delinquent customers account and automated tool for AFDA calculation. Mass uploading of multiple line-item CMR/DMRs. Hold a twice-a-year physical audit count for AIB partners & Master Distis. Adjust internal inventory based on audit outcome.

Priority Ranking
H

Difficulty to Implement
L

A/R & Collections CMR/DMR CMR/DMR Mass uploading Inventory Reconciliation

Other

POS Reporting and Disti Inventory Reconciliation

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