Improvement of order processing scheme in Fuji xerrox Viet Nam supply chain management

Chapter 2: Investigation of problem in FXV SCM 16 2.1 Inventory management planning under SCM 16 2.3 Processing time of Indirect sales orders 17 Chapter 3: Review of Problem for impro

HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITÉ LIBRE DE BRUXELLES

SOLVAY BRUSSELS SCHOOL OF ECONOMICS & MANAGEMENT

MBQPM4

PHAN VIET HONG

IMPROVEMENT OF ORDER PROCESSING

SUPPLY CHAIN MANAGEMENT

MASTER FINAL PROJECT

MASTER IN BUSINESS QUALITY AND PERFORMANCE MANAGEMENT

Ho Chi Minh City (2014)

Statement of authentication

This project is about Fuji Xerox Vietnam - Supply Chain Management operations

The project named “improvement of order processing scheme” is developed and

completed by Phan Viet Hong - student of MBQPM4 (2012) class in the final project of Master Degree

This individual study is based on actual scenarios of SCM operations in Fuji Xerox Vietnam By finding the operations issues and developing the countermeasures base

on PDCA cycle, the project helped the SCM team in FXV to improve some specific weak areas and also to suggest further countermeasures for improvement in the future

Acknowledgements

I highly appreciate to the classmates in the group: Ms Phuong Hanh, Ms Yen Phuong,

Mr Van Binh, Mr Van Thuy in class MBQPM4 (2012) who support me a lot during the time of the course, this group is very effective in many group assignments that we worked together

I would like to have special thanks to Professor Martin for giving me knowledge in the classes, providing guidance and answering to my questions and concerns during the time I do the final project

I also have special thanks to related managers and staff working in Fuji Xerox Vietnam for giving me the data, explanation in department operations and also sharing good ideas for me to complete the final project

I appreciate some Fuji Xerox HQ staff located in Singapore working in IM and SCM department for supporting me to speed up the action implementation, without their kind support, we are unable to meet the dead line of the project and also cannot see the result as of today

Chapter 2: Investigation of problem in FXV SCM 16

2.1 Inventory management (planning under SCM) 16

2.3 Processing time of Indirect sales orders 17

Chapter 3: Review of Problem for improvement of SCM in FXV 21

3.1 Review current process to get understanding the current status 21

3.2 Setting the target for improving 24

PART 2: IMPROVEMENT OF ORDER PROCESSING SCHEME IN FXV SCM 29

Chapter 1: Countermeasures development 29

1.2 Low cooperate attitude from distributors 30

1.5 Evaluation and selection for the countermeasure 35

1.6 Develop countermeasures and deploy actions (action plan to improve) 36

Chapter 2: Measure the results and compare to the targets 45

Chapter 3: Re-engineer and Standardize the process 49

List of abbreviations

AWMS Apeos Ware Management Suite ITSS This is an IT system of FXV

CRM Customer Relationship Management OPB Office Product Business

CS&Q Customer Service & Quality PDCA Plan Do Check Act

FSMA Full Service Maintenance Agreement SCM Supply Change Management

FY Japanese Fiscal Year (1 Apr – 31 Mar) SMC Senior Management Committee

List of Pictures

Picture 1: Xerox network in the world Picture 23: Structure of Proxy Server in

HCM and HN officePicture 2: FXV business scheme Picture 24: Structure of Internet Leased

linePicture 3: FXV Organization Chart Picture 25: Current issue of limited

bandwidthPicture 4: Customer Service & Quality

Organization Chart

Picture 26: Evaluation and selection of countermeasures

Picture 6: DOS report of Equipment Picture 28: Task schedule and due date

Picture 7: Sample of consumables order

taking from CCA to SCM

Picture 29: Task schedule and duration

Picture 8: Revenue contribution by direct

Picture 11: Problem summary Picture 33: Key performance index to

monitor performance of DealersPicture 12: Selection of the issues for

resolution

Picture 34: Key Roles and Responsibilities

Picture 13: Current indirect sales Order

process

Picture 35: Launched forecast policy

Picture 14: Current lead time for direct and

indirect sales Order

Picture 36: Compare the old and new process

Picture 15: Number of dummy order in

Picture 38: Dealer Feedback Improvement

Picture 17: Identify the target for

Picture 19: Fishbone analysis Picture 41: Time Results after

implementation of new processPicture 20: Team survey for evaluation the

causes

Picture 42: Current status of Dealer outstanding Account ReceivablesPicture 21: sample of forecast form Picture 43: New standardized indirect sales

order processPicture 22: Forecast scheme

Preface

This project is based on actual scenario and actual data collected from FXV SCM operations None of the text in the project is taken from any previously published project

All the SCM operations including current process are illustrated in chapter 1 that is referred to the process collected by SCM team, company process

Chapter 2 is the investigation of some keys problem happening in FXV SCM that can

be resolved in short term, it is very obvious issue in daily operations, I am not trying to touch the big issue which is very general that may be out of the scope or need long time

to resolve it For example changing the supply vendor or outsourcing some

operations… base on 3 selected problems, I chose the problem to resolve in this project

that is most feasibility and can help the current operations Chapter 3 is to review the current status and setting the target for improvement

Part 2 is focused mostly on countermeasure developments and implements the action plan to resolve the problem After the actions are taken, the result is measured and compared to the target to see the improvement Once it is confirmed that countermeasures are confirm to work and help the operations, chapter 3 of part 2 to explain about re-engineering and standardizing the process and document it

To continuous follow up and improvement, I have some further suggestion for the operations to improve in longer term in last chapter of part 2

The entire project was done within FXV SCM scope using systematic thinking, data analysis and QC tools The data in the project is Confidential and not Published

PART 1: FUJI XEROX VIETNAM AND ITS SCM

Picture 1: Xerox network in the world

Fuji Xerox Vietnam (FXV) is established in 05/2010 aiming at business expansion in a rapidly growing market in Vietnam The establishment of FXV not only reinforces the activities of the dealers, but also enables direct sales and direct maintenance services operations, which will satisfy demands from customers who expect even higher value

in products and services

Company products:

Currently, FXV is providing 3 kinds of main photocopy multi-function product including the network and personal printers (OPS), Office multi-function machines (OPB) and High end production printers (PSB)

Beside, FXV is also selling office software product such as Docuworks, AWMS, Docushare and paper as the newly established business in the year 2014 The main revenue come from box selling to direct and indirect end user and also from the service

that called “click charge” revenue which the customer sign full service contract with

FXV and just pay bill base on how many pages they prints per month that later call in this project Full Service Maintenance Agreement or FSMA

Company business structure

FXV is currently doing business directly and indirectly with end customer, there are 6 distributors in Vietnam and 2 Dealers in Cambodia under indirect sales, these channels also have their own sales and service team FXV just provide support to Distributors such as marketing support, technical support but without touching their end customers

In the designed stage when company is establishment, to avoid business confliction

with current Distributors, FXV just sell their products to “new customer”, “global customer” that they found and they also will service those machines for after sales

service With the current customers who want to buy additional machines, FXV will have to introduce to Distributors If current customer want FXV to service their machine, FXV has to refuse and inform to Distributors for more handling If the customer still wants to buy from FXV and do not want to buy from Dealer, in this case, FXV must install the machine and service it but FXV has to pay some amount of money to Dealer in so called Alliance scheme

Below is the summary of scheme FXV provide direct service to its own customer:

Picture 2: FXV business scheme

1.2 Organization Chart

Picture 3: FXV Organization Chart

In the company, the president is legal representative and under the president are department head who are also members of Senior Management Members or SMC (in blue box) This is the management board of the company who has responsibility to issue company policy, monitor the company financial performance and decides the direction and business strategy for the company

The organization has 3 direct Sales Operations: North sales operations, South sales operations 1, South sales operations 2 These sales teams will directly find customers and sell the products These teams are in charge of selling OPB or office products including OPB equipment and OPB software that most of the office is using now for office environment

Productions system business (PSB) provides direct sales for production machines These are the very big machines that mostly target to printing house, commercial print customer, print on demand or minilab who makes the photo book

Channel business group is in charge of indirect business or channel business, they are looking after the Dealers which has another name called Authorized Distributors These Dealers also has their direct sales and service, they are independent in finance and mostly are exclusive Dealers that are supposed to sell only Fuji Xerox Products

Back office is Customer Service and quality department, Marketing department, Finance department and HR department These departments do the support to mentioned before sales departments Regarding to customer server, there are 2 main teams located in Ho Chi Minh and Hanoi which are responsible for customer in the South and North

Picture 4 Customer Service & Quality Organization Chart

SCM currently is under Customer Service & Quality department headed by Viet Hong

– GM of CS&Q The reason why company put SCM under CS&Q is that SCM will

have more collaboration with Customer Service to support internal and external customer towards to more customer satisfactions

Hoang Xuan is currently SCM manager leading 6 staff; they are in charge of all SCM matter in FXV including Hanoi, HCM and Cambodia Dealers There 5 members located in Ho Chi Minh office and 1 in Hanoi

1.3 FXV SCM Operations introductions

FXV SCM overview consists of planning (supply & demand), logistics, distributions, customer service As first role in supply chain, supply demand planning is an important part Responsibility is balancing inventory level and fulfillment ratio, forecast

accuracy So, this project scope is pointing out ordering processing scheme management for improvement

Every organization including productions, sales or trading of products need to hold inventory While production organizations hold raw material inventories, finished goods and spare parts inventories, the trading companies hold only finished goods inventories FXV is operating as trading and servicing company so it builds the inventories with finished goods to satisfy customer demand and trying to reduce sales management and ordering costs, stock out costs and reduce transportation costs and lead times

In order to manage healthy inventory, SCM sets up policy for inventory level, economic order quantity and periodic ordering, so the elements being for inventory management such as holding plan, transit times and order management lead times etc are important or how to achieve customer satisfaction and demand fulfillment

Inventory level is considered based on inventory plan or target and stock keeping units

is reviewed “Fast Moving” defined by Green zone, “Slow Moving” – Yellow zone &

“Non Moving”- Red Zone The color of the zone indicating their frequency and

volume of sales

Economic order quantity and periodic ordering which deals with inventory planning and being inventory tracking As inventory planners, their main job consists in analyzing demand and deciding when to order and how much to order new inventories

In FXV, based on result of sale outlook meeting, SCM planner will calculate purchase order and propose purchase order quantity (consideration: Operation plan, Finance outlook, sale outlook number, inventory policy, average usage (historical trend) and bulk deal)

With conditions are stable supply capacities from head quarter, centralized warehouse

in Singapore, FXV can maximize forecast result, and it means that FXV can get enough stock whenever it places order within forecast number, FXV can develop planning logic as following:

Buffer/Safety Stock: is the quantity that can cover 3 weeks sale out (latest 3 months average usage) because lead time of order is 3 weeks

PO quantity = (buffer/safety stock + Max 3M usage) – stock on hand (including in

transit)

In terms of measuring a sales performance in relation to Inventory, FXV often uses the

term “Inventory Turnover” Inventory turnover refers to the number of times the

inventory is sold or used in a period of one year Inventory turnover is also termed as stock turn which is measured by unit is DOS (Day of Sale):

DOS = value of inventory end of month / average past 6 month cost of goods sold x 30 days

A higher inventory turnover (low DOS) indicates a healthy trend of increased sales and indicates the need to maintain adequate inventory levels to avoid stock outs Inadequate stocks can result in loss of business opportunities that SCM needs to keep watching closely On the other hand a lower inventory turnover (high DOS) shows that either the sales of the said inventory which is slowing down or that the unused inventory is building up somewhere A slow inventory turn can help the inventory manager focus

on finding non-moving, obsolete and slow moving inventory items and thereby steps can be taken such as notification to sale to find out opportunity or request marketing to develop clearance program

1.4 SCM current Process Overview:

Equipment (EI), Consumables (Con) and Spare Part (SP) are manufactured from Japan and China shipped to FXAP/ALC hub This centre receives order from FXV and fulfills the order in 2 ways:

If the order is for Distributor, the shipment will be from ALC directly to Distributor warehouse in HCMC or Hanoi warehouse (these warehouse are under Distributor and FXV have no any management of these warehouses)

If the order is for FXV end customer, the shipment will be from ALC to HCMC 3PL warehouse located in Binh Duong province

In FXV, there are 4 warehouses 2 big 3rd party warehouse located in Binh Duong and Quang Minh (Hanoi); 2 small warehouses called depot warehouse located in FXV HCM and HN office to store HFSI parts and Consumables, not equipments

Transportation for delivery, EI and Con using truck with 1 day lead-time and SP using Motorbike with 2-4 hours lead time

Picture 5: SCM process

SCM scope: FXV is not responsible for purchasing products from manufacturers in

Japan, China or Thailand, so FXV just partially handle the supply chain in the “red dot

line” from FXAP/ALC hub to end customer We understand that FXV not fully

manage it supply chain from vendor (manufactory) to FXAP/ALC down to the customer, FXV just handle the order from ALC down to its end customer

This paper is to investigate the situation in FXV SCM operations mentioned above, analyze it and recommend the solutions to improve its quality in the organization

Especially, FXV doesn‟t control all the stage in the SCM

Chapter 2: Investigation of problem in FXV SCM

2.1 Inventory management (planning under SCM)

Base on the current process, SCM makes order base on the outlook number and plus some buffer to avoid the sudden order from sales, there is no big issue in supply so far with this logic when order and how many quantity order because SCM allow sale staff direct verbal booking to SCM to adjust order timely However not all the sales have exact sell out as by model what they committed in monthly outlook Some outlook model belong to very slow turnover sale, this lead to long inventory issue whenever sale outlook come inaccuracy falling on slow turnover model Below DOS report of Inventory as of Apr 2014 show high warning zone area

Note: High means „more than 360 days or from 1 year to 3 years

Picture 6: DOS report of Equipment

We can address that there are inventory stay in the warehouse without any movement which are in danger zone 1,2 about 1.8% and slow moving status in warning zone as

22.8% This means planning purchase rely on outlook number doesn‟t work well So,

the inventory build-up is very expensive and could lead to obsolete in one day if it is not managed well How to improve this area is still the issue in SCM

profit, the company now is providing full service contract to customer call Full Service Maintenance Agreement (FSMA) When signing FSMA, customer will not worry about spare parts or consumable usage in their machines, they just have to pay service

charge base on “click” or number of copy/printout the machine produce

The good point of this business model is that service team just base on the customer machine part lifespan and usage to order inventory Engineer before visit customer, they can refer to machine history and bring spare part to fix the problem at customer site, this help reduce cost and delivery time

When customer machine runs out of consumable, customer makes a call to call centre

to order, our SCM base on the model and quantity to supply customer using 3PL delivery Nippon team Below is one sample of order nature from customer to our CCA and how CCA inform SCM for the supply:

Picture 7: Sample of consumables order taking from CCA to SCM FXV have not implement CRM yet, so all customer service history are kept in Excel file, it is difficult to manage customer information in service especially customer order history There is NO any monitoring mechanism or process in place to control customer consumable order such as when is last customer order, how many copy volume customer made, do they really complete use of toner, do they over order?

This is really a critical issue for FXV because the consumable are very expensive and if customer miss-use one toner or Drum, machine in that month has no profit

2.3 Processing time of Indirect sales orders

Since Fuji Xerox entered Vietnam Market in 1994, the company was named China Operations (Fuji Xerox Asia Pacific Rep office), all the business was under Indirect (Dealer Business) Until May 2010, Fuji Xerox Vietnam established and the

Indo-company starts providing direct business to customer Now in 2014, the total revenue

of both direct and indirect is US$ 19.2 million With 20 years continuously contributed

by indirect, now more than 60% out of total revenue still come from this business

Picture 8: Revenue contribution by direct and indirect

It is addressed that indirect still plays the important part of FXV business in Vietnam market This means that SCM has to receive and handle many orders from Dealers The number of order is increasing but the process that FXV SCM is using is not much changed compared to 10 or 15 years ago Below is the current process that SCM handle indirect sales order

Picture 9: Current indirect sales Order process

Staring from Dealer, the PIC have to input the order into Dummy PO then send to FXV for verifying, after FXV SCM verifies the items, the dummy order will be sent to APO ALC for key-in order in the system and confirm the stock, ALC will send the confirm stock to Dealers Dealer will send the final PO to FXV FXV take time to compare dummy PO and final PO then upload final PO to system After that, FXV send final PO to ALC for processing, ALC will process Pick & Pack for delivery

The process takes very long time for SCM members to proceed indirect order Normally, order lead time takes about 110 minutes since receive the order till completion of pick & pack while direct sales order takes about 45 minutes

There are lots of incorrect order data input by Dealers caused by human mistakes and this lead to low productivity and waste resources in SCM operations

Example of cancelling the order and diverting the order quantity to the next order

Picture 10: Sample of cancel sales order

2.4 Problem solution selection

As mentioned in above parts, there are 3 problems happening in FXV SCM now that impact so much on the operations, below Picture will be the summary of them:

Problem 1: Inventory

management (planning

under SCM)

Problem 2: Support Logistics

Problem 3: Processing time of Indirect sales

orders

- Long inventory stock due

to part order to warehouse

but not moving lead to

long DOS or long “Days

of sales”

- Wrong outlook model

make slow turnover sales

model

- No system in place to monitor direct customer consumable order

- Not able to track order history

- Customer miss the order

or sometimes double order

- What customer order, SCM just supply but not check the history

- Long processing time from final PO

confirmation to FOB

date” (Longer lead time)

- Incorrect data of dealers‟

- Lack of motivation for non value-adding jobs for

ordering workflow” (low

productivity) Picture 11: Problem summary

In order to select the problem to resolve in the project, the criteria to be chosen in the selection process are as follow: Company direction, Value to operations, Time achievability, Team Participations By giving the points from 1 to 5 (Min: 1 points and Max: 5 points) We can select the proposed problem solution it the total points of all criteria is highest

Picture 12: Selection of the issues for resolution With the total points of 17, the proposed solution to implement in this project will be:

“Reduce processing time of indirect sales order”

Chapter 3: Review of Problem for improvement of SCM in FXV

3.1 Review current process to get understanding the current status

Look back to the current process of Indirect Sales Order handling, there are couples of steps that FXV Dealers and FXV SCM have to do manually such as creating Dummy

PO, Check the Dummy PO for confirmation or cancellation These manual steps take a lot of time to process a PO

Picture 13: Current indirect sales Order process

FXV SCM often receives feedback from internal and external customer in daily operations Below is some of the negative feedback (voice of customer) for the service that SCM is providing:

From FXV Dealer: “Long processing time from final PO confirmation to FOB date”

APO SCM Planner: “Incorrect data of dealers‟ outstanding orders in daily report”

APO ALC OM Team: “Resource wastage and unproductive actions”

To understand more about current situations, SCM records the sales order lead time since start the sales PO until the completion of Pick & Pack The fact shows that to proceed 1 sales order, Direct sales order spends about 45 minutes while Indirect sales

order spend 110 minutes This means that very long lead time to process one sales order and also result shows very low productivity in the team performance The Picture below shows the comparison of handling one direct sales order and one indirect sales order:

Picture 14: Current lead time for direct and indirect sales Order

The lower chart is the steps that FXV SCM handles indirect sales The time shows in minutes is the time that each step spending in the process Looking at the indirect sales order in the lower chart, in the step 1, SCM staff has to manually check and correct the item quantity in Dummy PO vs PO quantity then input those information into system This manual step takes 30 minutes because the staff has to check part number and its new parts, check the quantity…

In the step 3, if ALC staff found that there is a mistake in the item order or item not

available in the system due to that item is already moved to other country‟s order (FXV

normally not do outlook to book/reserve the item, ALC staff will cancel the dummy order and return order to FXV or divert the order to next month This step normally takes 35 minutes including communication time between FXV and ALC Singapore site

By adding all the time of 5 steps in Indirect sales order, It takes average 110 minutes to proceed one order from beginning till completion

Besides the time consuming that each steps use, as it is mentioned before that using dummy PO can also make mistake because the Dealer has to input order information manually Usually, when a mistake or missing the item in order line found, it take some more time to correct the order According to Dealer order nature, the number of order increase in every quarter end so, the mistake was logged in these period is also high Below Picture showing the numbers of mistake that happened in the past 2 years that have to be corrected and total time spent for the correction recorded on a monthly basic

The Japanese Fiscal year start from 1st of Apr and end in 31st of Mar next year By looking at the total 380 dummy PO that FXV ordered in FY13, it is obvious that the number changes every month and have high number in quarter end (Jun – 34 PO, Sep –

49 PO, Dec – 39 PO and Mar – 42 PO) Due to this order nature, it is difficult to

manage the resource and its productivity in SCM because it is only 1 dedicated staff to manage indirect order at the moment

Picture 15: Number of dummy order in FY13

Below chart are the time consumed in each steps that SCM staff spent to proceed 380

PO in FY13 The number are in minutes that spent in each steps for the whole year FY13:

Picture 16: Time consuming in each steps in FY13

By analysis the time consumed in each steps, except for time spend in FXV and ALC

to proceed the order that FXV SCM cannot control, there are 38% of time spent for manually check and correct the item quantity in Dummy order and 6% time spent for cancel the order that are wrong These are the time that we need to set target for improvement

3.2 Setting the target for improving

Picture 17: Identify the target for improving areas

Now, we will analyze again each step, we see that in step1, SCM staff just manually check and correct the items quantity in dummy PO This step takes much time to check but if there is a good method, the staff basically can reduce 5 minutes out of 30 minutes

The reason why we target to reduce 5 minutes in Step 1 is because Vietnam market is fluctuated, there are sudden deal come from government tender so the number of order from Dealer is unpredictable, the schedule often change and also machine order configuration is always changed Consider the unique operations like FXV (that no other countries in the region) FXV still have to use this dummy order step manually so

25 minutes in this step will be the highest productivity that staff can do to complete it

In the step 3, in average, it takes about 35 minutes to cancel 1 dummy order In FY13, there are 48 cases that we need to cancel the order and it spent about 1680 minutes (6%) of the time FXV SCM spent to proceed indirect order for the whole FY13

This is really the steps that come from human mistake that need to be eliminate from the process to increase productivity and minimize the cost If FXV can successfully do this, company can save a lot of time

Below is the target setting to improve the indirect PO:

Picture 18: Target setting for the improvement

Improved 40 minutes for each indirect sales order (36% reduced the time) that will impact a lot for the SCM operations Let have a look at the time that FXV SCM can save to process the average 30 PO per month, the total time that company can save will

be 1200 minutes or 20 hour/month This is really a big improvement for FXV SCM operations team

Now we will deeper the root cause to understand why the process takes so long to proceed the sales order for indirect, here we use Fishbone diagram to analyze the root cause :

Picture 19: Fishbone analysis

In order to realize the target that reduced 36% processing time of indirect sales order,

we use fishbone diagram to find the reason why the process take long time There are many cause come from 4 main areas: Method, System, People and Customer (Dealer) There are some key reasons found from the result of fishbone diagram analysis:

 Method:

- Manual process order in ITSS system: the company launches ITSS in SCM and

Finance but other department like Channel, Customer Service still using manual method to manage the data and input the order using excel file

- Time consuming to check incorrect order: because Dealers established long time

ago, they have many customers Usually, there are hundreds of items in one order SCM staff have to spend a lot of time to check the order to avoid incorrect order

- Manual workflow: the steps to receive and process the order still not streamline and

not linked among the department

 System:

- Job run slow in system: The network system in company is old when SCM staff

upload the order into system, it take long time and sometimes it hangds and bring a lot of problem

- System not link with Dealers: As Dealers are the local company and Fuji Xerox is

not only the brand name they are working with, so there is no link in system between FXV and Dealers for order and forecasting purpose

 People:

- Low forecast accuracy by channel sales: The Dealer PIC who is in charge of order

and forecast to FXV SCM, they never think this job is important to them and they also never order what they forecast As the result, Channel sales in charge of that Dealer have to do the forecasting on behalf of Dealer Because not enough information from Dealer submitted or the information is not 100% correct due to confidentiality, FXV SCN has to suffer the low accuracy of forecasting

- Limited Headcount (SCM): There are total 7 members in SCM team but only 1

staff in charge of Indirect sales order, this limited manpower sometimes cannot handle all order

 Customer:

- Low cooperative attitude (Distributors): as mentioned above, Dealers are not

selling only one brand name so they never have good cooperation with FXV in handling the order and forecasting, the result is that they not follow any policy issued by FXV to Dealers

- Not follow forecast rule: FXV requesting Dealers to forecast 2 months but no any

Dealers follow this rule The Channel sales have to do this job to ensure the stock are book for order

A small survey is conducted among all SCM members to choose the most possible cause of the issue By giving the score from 1 to 5, which 1 is lowest possibility to be the cause and 5 is highest possibility the cause of the problem:

Picture 20: Team survey for evaluation the causes

Base on verifying the root cause using above chart There are 4 selected causes that mainly contribute to the issue that process takes long time: Manual workflow; Job run

in slow system; Low forecast accuracy by channel sales; low cooperative attitude (Distributors) Now is the step to develop countermeasures

Xuan Trung H.Anh My Thuong Hoai An TOT

Selected causes

Evaluation by each member in SCM team

PART 2: IMPROVEMENT OF ORDER PROCESSING

SCHEME IN FXV SCM

Chapter 1: Countermeasures development

In this stage, we will develop the countermeasures in order to resolve the issue finding from previous stage

As mentioned in issue finding and selection, FXV SCM has to find and develop the countermeasures to improve the process of indirect sales order There are 4 main issues and their relevant measures that may contribute to improve the ordering process:

1.1 Low forecast accuracy (sales):

+ Developed countermeasure 1: Review forecast policy

The current forecast policy for indirect sales is that Authorized Dealers are supposed to follow 2 months forecasting policy For instant, this month is Jan, FXV requests

Dealers to send the forecast number in Feb‟14 and Mar‟14 Below is the forecast form:

Picture 21: sample of forecast form

Follow the policy, the Jan‟14 forecast number will be allocated and shipped 2 months

later The official order will be sent on Feb‟14 and Dealer will be receiving goods on Mar‟14 At the same time of making the official order in Feb‟14, Dealer are requested

to send the Feb‟14 forecast number By reviewing the accuracy forecast (number of

actual order compared to number of forecast number), FXV SCM found that the rate is low compared to other countries The reason is that Dealer often do not care about

001R00591 (PR BELT) Fuji Xerox Co Ltd IGEN3 EQP IGEN3

003E50510 (HEATER ROD HOLDER) Fuji Xerox Co Ltd DOCUPRINT 4635

003E59841 (HANDLE LH LOW) Fuji Xerox Co Ltd NAUSICAA DC550IPL

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005K06790 CLUTCH ASSY PULLY Fuji Xerox Co Ltd FUHJIN DC1100CP

005K06960 (CLUTCH ASSY) Fuji Xerox Co Ltd FUHJIN DC1100CP

006K30880 SHAFT ASSY-DRIV Fuji Xerox Co Ltd NUVERA DPS DT144EPR

006K32460 SHAFT,ASSY INVE Fuji Xerox Co Ltd NUVERA HV DT120CP

007E55160 (GEAR REVEL 1) Fuji Xerox Co Ltd SFIDA DC6060

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007E79320 (GEAR(19T)) Fuji Xerox Co Ltd SHEETA DC236CP

007K00120 GEAR INPUT ASSY Fuji Xerox Co Ltd DOCUPRINT 4635

007K01700 (GEAR ASSY IDLER) Fuji Xerox Co Ltd 5090G 5690

007K14732 (DRIVE ASSY-MAIN) Fuji Xerox Co Ltd PARMA J75P

007K15493 DRIVE ASSY DRUM A Fuji Xerox Co Ltd CHAMONIX C1000P

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Forecast