01_Order to Cash Process Analysis_vFinal_c

OTC ProcessCurrent/Future State Analysis

September 15, 2010Confidential

| OTC Process Analysis | September 15, 2010 | Confidential2

Project Scope & Process Analysis Summary

Order to Cash

Credit Review

CreditOrder Mgmt.

InvoicingCash

ApplicationsA/R &

Collections

Aging Reporting

Invoicing & Issue

Management

Cash Application & reconciliation

Credit/Debit Memo

Refunds andUnclaimed Research

POS Reporting Disti Inventory

Recon

Incentive Adjustment

Other

Revenue Recognition

Process Customer

Orders

Upfront Deduction Research

Pick, Pack, and Ship

Out of Scope In Scope

Legend


Key Observations/Challenges

# Key Themes Observation/Challenge

1Large amount of manual processing

• 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.

• Weekly “Statement of Account” is created in Excel.

2Revenue recognition and rebate process requires tracking of Disti inventory

• 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.

3Short payment of invoices leads to additional reconciliation processing

• 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.


Key Observations/Challenges (continued)

# Key Themes Observation/Challenge

4Extensive amount of Credit/Debit Memos processed due to balance changes in customer accounts

• Client X’s 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).

5Non Finance related processing is included in the order to cash process

• 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.


Template Guide

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

# Pain Point Quantification Priority Impacted Users

ID # Description of non-standard process or issue impacting process

Supporting data to size pain point

(H,M,L) Groups that would be impacted by a process change

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

Description

Process Walk

Current Pain Points

Priority

HighRequired to achieve process efficiency

MediumWill have a moderate impact on process efficiency

LowMinimal to no impact to efficiencies

Legend


Credit Review Process Overview

The credit management team processes financial information of both new and existing customers to establish or re-establish 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.


C1 Manual application and tracking of credit information using Excel

300 Hours/Year per FTE

L Credit

C2 Unclear application of decision rights for credit terms N/A M Credit

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)

Credit Review

Credit

Description

Process Walk

Current Pain Points

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Process Stage 1 Stage 2 Stage 3 Stage 4

Credit 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

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

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

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

Credit – Maturity Model

Client X Current State

Credit


Order Management Overview

Customer orders are processed as one of the following:

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.

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

Order Management

Order Management

Description

Process Walk

Order Type Customer Description

Vendor Managed Inventory (VMI)

Strategic OEM • 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.

Buy/Sell Order Disti •Typically “end-of-life” products sold at the end of a quarter.• Regulations in place dictate what products and which Distis can participate.

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OM1 Stale pricing in SAP creates billing errors in invoices. This results in short payments.

N/A H AR, OM

OM2 Customers submit POs primarily through email. These POs must be manually verified, processed and approved.

66% email submission

L OM

OM3 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.

N/A H OM, AP

OM4 First through put for order entry is approximately 20% N/A H OM

Order Management Process Overview

Order Management

Order Management

Current Pain Points



Order Management 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

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

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

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

Order Management – Maturity Model


Order Management


Invoicing and Billing Management Process Overview

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 X’s 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.

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

Invoicing

Invoicing

Description

Process Walk

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I1 Customers request paper billing requiring A/R to mail, upload to customer’s web portal, or scan and email invoice to customer.

40% of customers totaling 15% of billings

H AR

I2 Inability to send parts of a single invoice to separate contacts through SAP results in manual processing.

N/A M AR

I3 Credit is not alerted of EDI fall our errors. N/A M 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 M AR

Invoicing

Invoicing

Invoicing and Billing Management Process OverviewCurrent Pain Points


Revenue Recognition Process Overview

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.

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

Revenue Recognition

Invoicing

Description

Process Walk

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RR1 Revenue recognition approach forces Finance to track inventory owned by the distributor

N/A H Invoicing, AR, Disti Operations, Credit, Sales,

Business Operations

Revenue Recognition Process Overview

Revenue Recognition

Invoicing

Current Pain Point



Invoicing • Multiple billing procedures and systems in use, including significant amount of manual billing activity

• Some use of automated billing systems

• Some integration to extend customer relationship management applications such as order management systems

• Minimal or no use of electronic billing with customers

• Significant use of automated billing systems with integration to extend customer relationship management applications such as order management systems

• Some use of electronic billing with customers

• Full use of automated billing systems, fully integrated with extended customer relationship management applications

• Where appropriate sales invoices are transmitted electronically to customers

Invoicing – Maturity Model


Invoicing


Cash Application and Reconciliation Process Overview

Customers submit payment to Client X through one of three ways:

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.

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

Cash Application

Cash Application

Description

Process Walk

Type of Payment Payment Description

Wire Transfer 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.

Automated Clearing House (ACH)

Although remittance details are included, processor must still manually confirm and clear each payment.

Lockbox All remittance details are included with payment but processor must manually confirm and clear each payment.

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CA1 Wire payment information from bank does not include remittance details. AR must go through Credit to receive remittance details.

1-2 Days to get remittance details

from credit manager to AR

H AR, Credit

CA2 AR must clear each invoice against payment by manually clicking on each line item in SAP.

18,000 Line items cleared per month

H AR

CA3 For payment discrepancies, AR has to contact Credit, provide charge out/line item information, and wait for reconciliation details before they can offset payment.

Can take up to one month to clear due to

credit memo

H AR, Credit

CA4 AR must manually create a line item for each charge out that occurs.

500 Charge outs created each month

M AR

Cash Application

Cash Application

Cash Application and Reconciliation Process Overview

Current Pain Points


Upfront Deduction Research Process Overview

Distributors and some OEMs, including HP, Dell, and Acer, frequently short pay invoices for a number of reasons including:

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.

Upfront Deduction Research

Cash Application

Description

• Pricing or billing error• Rebates earned but not yet credited to account

• Shipping error• Return material authorization (RMA)


UD1 Long lead time on the validation of each short payment causing a delay in the clearing of the customer account.

N/A H AR

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)

Process Walk

Current Pain Point

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Cash Application • Cash receipts mostly received manually, high amount of checks, minimal use of electronic cash receipts

• Cash receipts posted to customer accounts manually

• Mechanisms for electronic cash receipts are in place, however utilization of systems remains low

• Lockbox functionality may be in use to improve processing of cash receipts

• Automated routines may be in use for posting cash receipts to accounts and invoices

• Mechanisms for electronic cash receipts are in place, with average utilization


• Automated routines are in use for posting cash receipts to accounts and invoices

• Mechanisms for electronic cash receipts are in place, with high utilization


• Automated routines are in use for posting cash receipts to accounts and invoices

Cash Application– Maturity Model


Cash Application


AR Aging Reporting Process Overview

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).

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

Aging Reporting

A/R and Collections

Description

Process Walk


AR1 Manual creation and customization of SOA for each customer. 20+ different forms within Excel

M 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 M Credit

Current Pain Points

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Credit/Debit Memo Process Overview

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.

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

Credit/Debit Memo

Description

Process Walk

A/R and Collections


CD1 The creation of CMR/DMR for multiple products requires multiple line items which increases the level of effort required for creation.

N/A TBD AR, OM, Sales, OEM Claims, Disti Ops, Sales

Finance

CD2 Each CMR/DMR has to be manually researched and verified by the requestor in order to be processed.

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

line items)

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

Finance

Current Pain Points

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Revenue and Incentive Adjustment Process Overview

Client X currently provides revenue and incentive adjustments to both Disti and OEM customers.

Disti adjustments require extensive sales and inventory tracking through weekly reporting.

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.

Incentive Adjustments

Description

A/R and Collections

Disti Adjustments

Price Protection As prices drop Disti is rebated the difference between original DBB and new DBB.

Rebates/Claims

Discounted Price Authorization (DPA)

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.

Standard Rebates Traditional volume discounts are standard across all distributors. This program is scheduled to be phased out by the end of 2010.

Bonus Based Program (BBP)

Performance based rebates are customized for each Disti to reach specific sales targets.

OEM Adjustments

Rebates• Price Masking• MPU Rebate

• Design Win Award Rebate• Radeon Advantages Program

• OEM Standard Rebate


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

Process Walk


A/R and Collections

Revenue and Incentive Adjustment Process Overview


IA1 Customized OEM rebate agreements and lack of supporting documentation from sales team lead to validation issues and delays in processing credits to customer accounts.

1-2 Claims validated per day per employee

H OEM Claims

IA2 Manual processing of OEM claims throughout the system, including calculating accruals and rebate amounts, creates delays in accrual and validation process.

N/A H OEM Claims

IA3 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.

N/A H Disti Ops

IA4 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.

N/A H Disti Ops, OM

Current Pain Points

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Unclaimed Credit Research Process Overview

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.


UCR1 Credit manager must research credit balances which requires extensive time and effort.

N/A L Credit

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

Unclaimed Research

Description

Process Walk

Current Pain Point

A/R and Collections

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A/R & Collections • Long process cycle time, linked to high degree of manual process steps, low visibility of data, and limited availability of enabling technologies

• Collections activity managed without supporting technologies

• Limited or no use of risk profiling or account prioritization

• Cycle time is still slowed down due to a number of manual process steps and multitude of non-integrated enabling system

• Collections activity conducted in a structured manner with limited use of enabling technology

• Some use of account or risk prioritization

• Benchmark-level process cycle times generating data and processing information with a high degree of accuracy and integrity

• Collections activity conducted in a structured manner, with use of account or risk prioritization and use of enabling technology

• Minimal cycle times with close to zero error rates and full visibility of all process related information

• Collections activity managed using appropriate technologies to prioritize collector activity

• Use of account or risk prioritization and extensive use of enabling technology such as collections management tools and trend analysis tools to identify delinquency root cause

A/R & Collections– Maturity Model


A/R and Collections


POS and Inventory Reporting Process Overview

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:

4. Verify accuracy of the sales numbers.

5. Compare inventory levels reported by Disti to inventory levels tracked in SAP.

6. 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.

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

Inventory Reconciliation

Description

Process Walk

Other

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PIR1 Process to verify all information provided by Disti is manual. Processor must contact each department, research any discrepancies, and report back to Disti.

N/A H Disti Ops

PIR2 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.

N/A H Disti Ops, Sales, Sales Finance, Customer

PIR3 Movement of inventory by Disti from one location to another causes discrepancies when reconciled with Client X tracked inventory levels

N/A M Disti Ops

POS and Inventory Reporting Process Overview


Other

Current Pain Points


Process Area Maturity Rating Best Practices Gaps

Credit 2.25• Full business evaluation (e.g. future prospects) of current and potential

customers is not performed prior to applying credit risk.

Order Management 3

• 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.

Invoicing 1.5• Manual distribution of invoices (40% of customers).

Cash Applications 2

• Multiple hand offs after cash is received to clear payment against customer account.

• Manual tracking and evaluation of rebate programs.

• No automated procedures for applying payment to customer account.

• Manual processing of CMR/DMRs.

A/R and Collections 1.5

• 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.

OTC Future State Discussion


Brainstorming Ideas from Penang and Austin Workshops

Process Area

OTC Process

Short Description

Future State Solution Priority Ranking

Difficulty to Implement

Overall

IT Infrastructure

• Review if current IT system, including SAP, can provide the proper foundation to support growth.

M H

External Portals

• Unify “customer experience” by standardizing all external portals that customers interface with.

M H

Front-end Finance Involvement

• 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.

H M

Credit

Credit Review

External Portal

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

L M

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.

M M

Invoicing

Invoice Processing

Automate Billing Method

• 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).

H H

Cash Application

Cash Application

Automate Cash Application

• 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.

H M

Upfront Deduction

1. Lead time commitment2. Policy changes

• 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.

M H


Process Area

OTC Process

Short Description

Future State Solution Priority Ranking

Difficulty to Implement

Order Mgmt.


Rebates – OEM/Disti

• 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.

H L


Rebates – OEM/Disti

• Review current rebates in playbook and ensure they are automated in SAP.

H M

A/R & Collections

Statement of Account

SAP Automation

• 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.

H H

CMR/DMR CMR/DMR Mass uploading

• Mass uploading of multiple line-item CMR/DMRs.

M L

Other

POS Reporting and Disti Inventory

Reconciliation


• Hold a twice-a-year physical audit count for AIB partners & Master Distis.

• Adjust internal inventory based on audit outcome.

H L

Brainstorming Ideas from Penang and Austin Workshops

Copyright © 2010 Deloitte Development LLC. All rights reserved.

Documents

01_Order to Cash Process Analysis_vFinal_c