1

LEARNING by DOING
ORDER PROCESSING

PURPOSE
Understanding
the process
the Process Map
of Lean Metrics
CASE
Ventura Goods Limited delivers the goods on weekly basis. The current process includes receiving a fax
on a weekly basis and processing it within an order entry process. One of their key customers (who is on
a Lean journey) is asking them to receive a daily phone order and deliver the order on following day.
The company wants to figure out how they can process orders quickly to deliver the next day.
They receive about 46 orders per day from all of their customers. The front office is paid to work an 8
hour day.
1. Orders are received by customer service by walking to the fax machine and returning with the
fax to the work station.
2. The faxed orders are batched and sent to accounting to check the credit through the finance
system.
3. Once the credit is approved, the orders are then sent back to customer service where the order
information is reviewed and entered into the MRP system.
4. The MRP system determines the shipping requirements for the orders (i.e., what goes on
Tuesday vs. Thursday), and flags any partial loads or over loads.
5. A report of these shipping problems is generated and printed in Customer Service. Customer
Service then reconciles the report against the customer needs.
6. The customer then receives a confirmation phone call, and the order is then finalized for
scheduling by Customer Service in the MRP system.
7. The order is then ready for delivery.





2
LEARNING by DOING
DATA SET
Receive Order
Process time: .5 minutes
Waiting Time= .5 days
Technology used: Fax
Check Credit
Process time: 1 minute
% of orders with acceptable credit: 90%
Waiting Time = .5 days
Technology used: Finance System
Review and Enter Order
Process time: 10 minutes
% of orders Complete and Accurate: 60%
Waiting Time = 1.6 hours
Technology used: MRP

Reconcile Order
Process time: 1 minute
% of orders Correct and Accurate: 75%
(not requiring reconciliation)
Waiting Time : 1.6 hours
Technology used: MRP
Confirm Order
Process time: 7 minutes
% of orders Complete and Accurate:85%
Waiting Time : 2 hours
Technology used: Phone
Finalize Order
Process time: 5 minutes
Waiting Time : 1 day
Technology used: MRP


TASK
1. Develop As-Is process map
2. Identify Value and Non Value added activities
3. Design an As-Is Value Stream Map
4. Calculate Total Cycle Time
5. Calculate Total Lead Time
6. Calculate Takt Time

Note:
If some information is missing, you may assume those. Write your assumptions separately.