Supplier Onboarding Lean 90-Day 092715 - UW...
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Supplier Onboarding Lean 90-Day Step Back September 28, 2015
Transcript of Supplier Onboarding Lean 90-Day 092715 - UW...
Supplier Onboarding Lean90-Day Step Back
September 28, 2015
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
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
Goals1. 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
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
Current State
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
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
Future State
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
Current State
• No visibility to where new supplier is in the onboarding process• No information at the address level• Terminology unclear
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
NO YES
Trading relationship request (TRR) sent to supplier
NO YES
Supplier has accepted the trading relationship
NO YES
PO and Invoice routing completed NO YES
Campus can initiate a Blanket Purchase Order
YES YES
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
Define Roles & Improve Workflow
Team Members: Karen Ericksen, Elise Glassman, Laurie Hunt, Tina Padilla, Heidi Tilghman and Felix Velasco (Lead)
Aligns with Goal 1
• Condense number of teams involved in supplier onboarding from 5 teams to 2 teams
• Eliminate redundant hand-offs• Increase efficiency• Increase knowledge base
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Supplier OnboardingCurrent State average: 26 Business Days
Range: 5‐63
Create Supplier RecordAvg: 4 Days
Start DelayWait for PAS
Record
Avg: 3 Days
Payment SetupAvg 14 Days
CRDAvg: 9 Days
ACHAvg: 16 Days
Tax VerificationAvg: 2 Days
Ariba RegistrationAvg: 10 Days
FollowingWednesday
FollowingMonday
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?
Supplier Onboarding Analysis Questions:
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Supplier OnboardingCurrent State average: 26 Business Days
Range: 5‐63
Create Supplier RecordAvg: 4 Days
Start DelayWait for PAS
Record
Avg: 3 Days
Payment SetupAvg 14 Days
CRDAvg: 9 Days
ACHAvg: 16 Days
Tax VerificationAvg: 2 Days
Ariba RegistrationAvg: 10 Days
FollowingWednesday
FollowingMonday
Business Days
If the 14-day wait-time for Ariba registration requests is eliminated…
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Supplier OnboardingFuture State Average: 12 Business Days
Create Supplier RecordAvg: 4 Days
Start DelayWait for PAS
Record
Avg: 3 Days
Payment SetupAvg 14 Days
CRDAvg: 9 Days
ACHAvg: 16 Days
Tax VerificationAvg: 2 Days
Ariba RegistrationAvg: 10 Days
FollowingWednesday
FollowingMonday
Business Days
… the number of days to onboard a supplier may be reduced from 26 to 12 days.
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Supplier OnboardingFuture State Average: 12 Business Days
Create Supplier RecordAvg: 4 Days
Start DelayWait for PAS
Record
Avg: 3 Days
Payment SetupAvg 14 Days
CRDAvg: 9 Days
ACHAvg: 16 Days
Tax VerificationAvg: 2 Days
Ariba RegistrationAvg: 10 Days
FollowingWednesday
FollowingMonday
BUSINESS DAYS
How can the ACH payment setup process be shortened to 10 days or less?
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Supplier OnboardingFuture State Average: 12 Business Days
Create Supplier RecordAvg: 4 Days
Start DelayWait for PAS
Record
Avg: 3 Days
Payment SetupAvg 14 Days
CRDAvg: 9 Days
ACHAvg: 16 Days
Tax VerificationAvg: 2 Days
Ariba RegistrationAvg: 10 Days
FollowingWednesday
FollowingMonday
BUSINESS DAYS
Hold Lean event to:• Investigate obstacles of ACH payment setup process• Determine solutions to reduce setup time
RecommendationsSingle 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 ImprovementsTo reduce supplier onboarding process time:
• Eliminate separate Ariba registration request process• Improve ACH payment setup process (Lean event)• Eliminate redundant tasks uncovered during analysis
Develop Supplier-Focused Strategy
Team Members: Claudia Christensen (Lead), Steve Ebling, Kassy Ellefson, Meg Frazer and Kyle Richard
Aligns with Goals 1 & 2
Current StatePAS Supplier Database as of July 31, 2015
31,504 Records
1,607 Ariba-Network Enabled• January 17, 2013 – July 31, 2015
1,309 Transacting in Ariba
175 New Suppliers Added Monthly• Not all complete the full enablement process
Current State
73% of suppliers have five transactions or lessHighest percentage of suppliers – Only one transaction
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, low-differentiation 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
Future StateTo 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
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
Key PrinciplesAll 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
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: Email 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
Recommendations (Future State)1. Fundamentally reassess and recreate Procurement Service’s website,
focusing on the differing needs of each stakeholder group
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 email 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
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 email 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
People + Process + Technology = The Winning Solution
Open Items1. Kaizen recommendations are still separate2. 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
Next Steps1. Set a defined timeline for kaizens to align and prioritize
recommendations2. Present Lean proposal to sponsors3. Sponsors communicate date for final decisions4. Investigate requirements and cost with teams that will
program them5. Define requirements, scope and budget in detail6. Take action!
Lessons Learned• Supplier onboarding is a very complex, multi-system, multi-
party 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
