Business processes

You are required to read the following case study and provide appropriate answers to the requirements.

Padidas manufactures and sells athletic wear to retail stores, who sell them on to customers. Its range of products includes warm-up tracksuits, body suits and running shoes and spikes. The business process followed by Padidas to supply retail stores is as follows: Retail stores order online using a secure website that sends the order through to their allocated Padidas customer service representative. Orders are generated periodically by retail store managers, who typically place an order when their stocks are getting low. Retail stores, while all being long-standing and regular customers, have typically ordered at the last minute, resulting in irregular demand levels across the year. The customer service representative checks that the goods are available and notifies the retail store when their goods will be arriving. Once the order has been checked a copy goes to the accounts receivable office. The goods are packed, manually recorded on the goods release form (two copies are prepared) and sent to the shipping department for dispatch. A courier collects goods and a goods release form every morning and afternoon and delivers these to the retail store. Once delivery details are confirmed, an invoice is prepared by accounts payable, based on the details in the customer order and the goods release form. Electronic invoices are sent out at the end of each week. Retail stores currently have standard payment terms of 2/15, n/35. Payment can only be made by cheque, which is sent to the customer service representative who forwards it on to the accounts receivable office. Padidas has recently noticed that it is having inventory management problems due to the irregular nature of orders. This has impacted on its own ability to meet customer demands. It is also concerned that incorrect quantities of goods may be packed and shipped, and not detected until the goods reach the retail stores. This introduces extra costs of handling returns and allowances. Additionally, Padidas has noticed that its accounts receivable turnover has dropped from 11.7 times per year to 9.5 times per year over the last 12 months. An independent consultant has suggested that by re-engineering the process these problems could be addressed.

Required For the business process described above, identify

1. List and identify two participants, for the business process which was described above (2 x 0.5 marks = 1 mark).

2. List and identify two inputs, for the business process which was described above (2 x 0.5 marks = 1 mark).

3. List and identify two outputs, for the business process which was described above (2 x 0.5 marks = 1 mark).

4. Identify and explain two inefficiencies that are present in the current system (2 x 1 mark = 2 marks).

5. Suggest some potential avenues through which those inefficiencies which you identified in the previous requirement (requirement 4) could be corrected through business process re-engineering (2 x 1 mark = 2 marks).

6. Identify and discuss two major issue that may be faced by Padidas in the re-engineering processes. Hint: In your answer you may refer to the ethical/social issues that the management could face or employees would raise through the business process re-engineering (2 x 1 mark = 2 marks).

7. Propose and discuss two strategies that Padidas can take to deal with the issues that you identified in the previous requirement (requirement 6) (2x 1 mark = 2 marks).