Supplier Onboarding Lean

Transcription

1 Supplier Onboarding Lean 90-Day Step Back September 28, 2015

2 Launch Scope Problem Statement: It can take up to 5 weeks from registering a new supplier until a payment can be issued During onboarding the status is not very visible to campus departments or the supplier Background: The onboarding process is complex, misunderstood, time-consuming and not transparent Orders that could be placed in eprocurement are stalled or routed through other methods because of onboarding and Ariba Network enablement delays Lack of transparency causes communication problems and increases administrative burden to campus and central office

3 Current State Map & Steps Process Steps: 133 Process Times Touch (Ideal) Time: 12 hours 18 hours 45 minutes Process (Current) Time: 11.5 days almost 10 weeks Wait Time (Between Steps) : 10 weeks over 28 weeks Complete Accurate Correct: 50% - 95% Rework Loops: 5 Pain Point Categories: 11 Ideas for Improvement: 145

4 Goals 1. Reduce the onboarding time for a new supplier from first contact through being ready to transact within eprocurement (Ariba) to 2 weeks 2. Provide visibility of supplier status within the onboarding process at key milestones for all stakeholders

5 Supplier Management Systems Integration Team Members: Angela Battle (Lead), Claudia Christensen, Karen Ericksen, Laurie Hunt, Ernie Jones, Aron Knapp, Kyle Richard, Tina Padilla and Don Wilcox Aligns with Goals 1 & 2

6 Current State

7 Value Modernize systems Consolidate systems Increase automation Improve timeliness of data Improve quality control/error checking Improve visibility Improve reporting/metrics Reduce time/steps/systems in supplier onboarding Reduce need for human data transport processes

8 Proposal Consolidate Systems (into Single Workflow Web Service) Supplier Registration Form (SuRF) Vendor Control Automate Data Transfers Campus Ariba Network Enablement Request Supplier/UW Notifications Modify PAS New Status Codes Time/Date Stamps

9 Future State

10 Increase Visibility in the Supplier Onboarding Process Team Members: Karen Ericksen, Meg Frazer (Lead), Laurie Hunt, Ernie Jones, Aron Knapp, Tina Padilla and Don Wilcox Aligns with Goal 2

11 Current State No visibility to where new supplier is in the onboarding process No information at the address level Terminology unclear

12 Milestone Current State Future State Supplier has completed the SRF NO YES Vendor File Created YES YES Payment instructions sent to the supplier NO YES Tax ID Verified NO YES Supplier has set up a payment method YES YES Department submitted request to initiate Ariba Enablement Trading relationship request (TRR) sent to supplier Supplier has accepted the trading relationship NO NO NO YES YES YES PO and Invoice routing completed NO YES Campus can initiate a Blanket Purchase Order YES YES

13 Future State Recommendations to include: Date when critical process starts (Supplier file created, TRR sent) Tax ID Number (TIN) verification results Sequence/address level detail Separate the different paths (Ariba vs. Payment registration) Recommendations to remove: Catalog attribute

14 Define Roles & Improve Workflow Team Members: Karen Ericksen, Elise Glassman, Laurie Hunt, Tina Padilla, Heidi Tilghman and Felix Velasco (Lead) Aligns with Goal 1

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17 Condense number of teams involved in supplier onboarding from 5 teams to 2 teams Eliminate redundant hand-offs Increase efficiency Increase knowledge base

18 Supplier Onboarding Analysis Questions: Create Supplier Record Avg: 4 Days Supplier Onboarding Current State average: 26 Business Days Range: 5 63 CRD Avg: 9 Days Payment Setup Avg 14 Days Start Delay Wait for PAS Record Avg: 3 Days Following Monday Following Wednesday Tax Verification Avg: 2 Days ACH Avg: 16 Days Ariba Registration Avg: 10 Days Business Days Why is there a 14-day wait time for requesting that a supplier be enabled in Ariba? Why does it take 16 days for the ACH payment setup process to be completed?

19 Supplier Onboarding Current State average: 26 Business Days Range: 5 63 Create Supplier Record Avg: 4 Days Payment Setup Avg 14 Days Start Delay Wait for PAS Record Avg: 3 Days Following Monday Following Wednesday CRD Avg: 9 Days Tax Verification Avg: 2 Days ACH Avg: 16 Days Ariba Registration Avg: 10 Days Business Days If the 14-day wait-time for Ariba registration requests is eliminated

20 Supplier Onboarding Future State Average: 12 Business Days Create Supplier Record Avg: 4 Days Payment Setup Avg 14 Days Start Delay Wait for PAS Record Avg: 3 Days Following Monday Following Wednesday CRD Avg: 9 Days Tax Verification Avg: 2 Days ACH Avg: 16 Days Ariba Registration Avg: 10 Days Business Days the number of days to onboard a supplier may be reduced from 26 to 12 days.

21 Supplier Onboarding Future State Average: 12 Business Days Create Supplier Record Avg: 4 Days Payment Setup Avg 14 Days Start Delay Wait for PAS Record Avg: 3 Days Following Monday Following Wednesday CRD Avg: 9 Days Tax Verification Avg: 2 Days ACH Avg: 16 Days Ariba Registration Avg: 10 Days BUSINESS DAYS How can the ACH payment setup process be shortened to 10 days or less?

22 Supplier Onboarding Future State Average: 12 Business Days Create Supplier Record Avg: 4 Days Payment Setup Avg 14 Days Start Delay Wait for PAS Record Avg: 3 Days Following Monday Following Wednesday CRD Avg: 9 Days Tax Verification Avg: 2 Days ACH Avg: 16 Days Ariba Registration Avg: 10 Days BUSINESS DAYS Hold Lean event to: Investigate obstacles of ACH payment setup process Determine solutions to reduce setup time

23 Recommendations Single Team with Integrated Onboarding & Maintenance Processes Determine the process and role of an integrated team, to ensure: Cross-functional collaboration Ownership & empowerment Single point of contact Workflow Improvements To reduce supplier onboarding process time: Eliminate separate Ariba registration request process Improve ACH payment setup process (Lean event) Eliminate redundant tasks uncovered during analysis

24 Develop Supplier-Focused Strategy Team Members: Claudia Christensen (Lead), Steve Ebling, Kassy Ellefson, Meg Frazer and Kyle Richard Aligns with Goals 1 & 2

25 Current State PAS Supplier Database as of July 31, ,504 Records 1,607 Ariba-Network Enabled January 17, 2013 July 31, ,309 Transacting in Ariba 175 New Suppliers Added Monthly Not all complete the full enablement process

26 Current State 73% of suppliers have five transactions or less Highest percentage of suppliers Only one transaction

27 Recommendations Suppliers register by invitation only Change SRF to Supplier Application Form (SAF) The form is an application, not a registration Ensure SAF captures all desired/required information Add commodity information Require supplier to accept Ariba and UW terms when applying Application to be evaluated and approved by buying team Develop rosters of qualified suppliers for high-volume, lowdifferentiation purchases should be mandatory use Use new commodity information in SAF, block registration of suppliers within roster codes unless a special exemption is granted Purge supplier file regularly - Scheduled for Fall 2015

28 Future State To accomplish this, we will need: A mandate from leadership that spend within roster categories must be on contract Procedures for exceptions Programming to ensure additional data is added to the application i.e. Commodity Information

29 Improve Communications and Training with Stakeholders Team Members: Maya Beal, Monica Cohn, Meg Frazer, Elise Glassman, Heidi Tilghman (Lead) and Felix Velasco Aligns with Goals 1 & 2

30 Key Principles All communications originating in PS regarding Supplier Registrations should be: Concise Clear Precise Transparent Timely Specifically, all stakeholders should always: Understand policy and logic behind each step in the process; Know which steps in the process have been completed; Know what the next steps in the process are; Know where/how to find additional information; and Know whom to contact with questions/problems

31 Key Findings (Current State) Suppliers, campus partners and Procurement Services staff need 1. Clear, pithy, accessible sources of information targeted for distinct audiences and learning styles Challenge: Current website has become unwieldy, having grown organically as systems have evolved Challenge: is overused, inconsistent and inefficient Challenge: Ariba support documentation is ineffective Challenge: ACH policy and workflow is opaque 2. Tracking tools for supplier onboarding actions Challenge: Suppliers and campus partners have no easy access to registration milestones or status updates Challenge: Procurement Services has no system beyond Outlook for tracking registration requests Challenge: Procurement Services has no standard follow-up procedure or escalation plan for vexing registrations

32 Recommendations (Future State) 1. Fundamentally reassess and recreate Procurement Service s website, focusing on the differing needs of each stakeholder group

33 Recommendations (Future State) 1. Fundamentally reassess and recreate Procurement Service s website, focusing on the differing needs of each stakeholder group 2. (Re)Introduce ticketing system to capture, assign, and track each supplier registration and maintenance/update request 3. Improve strategic use of correspondence 4. Design a simple milestone visualization tool for suppliers and campus partners that addresses the needs of both visual and linguistic learners Figure 2: Sample/Generic Tool

34 Recommendations (Future State) 1. Fundamentally reassess and recreate Procurement Service s website, focusing on the differing needs of each stakeholder group 2. (Re)Introduce ticketing system to capture, assign, and track each supplier registration and maintenance/update request 3. Improve strategic use of correspondence 4. Design a simple milestone visualization tool for suppliers and campus partners that addresses the needs of both visual and linguistic learners 5. ACH presents challenges beyond the scope of our Kaizen Improvements in communication can only occur after the ACH process itself is re-examined To that end, Procurement Services should establish a new, short-term Lean team focused specifically on the ACH process

35 People + Process + Technology = The Winning Solution

36 Open Items 1. Kaizen recommendations are still separate 2. How to implement recommended improvements Improve existing systems/reports now and implement new systems/visualization tools later? Spend all time & resources on new systems/visualization tools? Need to take action on short-term goals without losing sight of long-term future state 3. Scope, requirements and budget not yet defined

37 Next Steps 1. Set a defined timeline for kaizens to align and prioritize recommendations 2. Present Lean proposal to sponsors 3. Sponsors communicate date for final decisions 4. Investigate requirements and cost with teams that will program them 5. Define requirements, scope and budget in detail 6. Take action!

38 Lessons Learned Supplier onboarding is a very complex, multi-system, multiparty process Commonality of themes and issues everyone generally had the same ideas Complexity of the current state systems and processes required detailed analysis Kaizens had to change scope/expectations during the Lean event to be successful Everyone participating is invested in simplifying and improving the process Focused objectives had to be separated to investigate issues in detail and develop specific recommendations, but must also now collaborate to provide a unified future vision