list eight BPI process issues or BPR principles that need to be applied to the raw materials purchasing process: The scenario: The manufacturing supervisor in Durham enters purchase requisitions into the EPT system, which triggers emails to the purchasing clerks. The purchasing clerks read the emails and decide whether the request is for a known or unknown part. If what is needed is a known part, and there is a preferred supplier for the material in the EPT system already, then a purchasing clerk emails a purchase order (PO) to the supplier for the item(s) requested. If what is needed is not a known part, then a purchasing clerk sets up a new part in the EPT system and performs traditional new vendor sourcing activities to determine an appropriate supplier for the material. Once these steps are complete, a purchasing clerk emails a PO to the chosen supplier. If no supplier exists for a known part, then a purchasing clerk must still perform sourcing activities and send the PO to the newly identified supplier. When the raw materials arrive, they are inspected for quality by the receiving department. If the quality is deemed substandard, then the goods are immediately sent back to the supplier. The raw materials passing quality inspection are then sent to the warehouse employees who count them for accuracy and prepare a receiving report. Warehouse employees then decide where a good place to store the materials in the warehouse might be and send the receiving report to the manufacturing supervisor as proof the raw materials have been received. The manufacturing supervisor will then sign the receiving report as confirmation the material has been received. Purchasing clerks receive supplier invoices in a variety of ways, but the process after receipt is always the same. First, they check each invoice for accuracy against the PO and make sure the appropriate pre-negotiated discounts and payment terms are included (e.g., 2/10 n 30). If there are any issues, they consult the supplier and make the corrections. The clerks then send the corrected invoice and PO to the accounts payable clerks in the accounting department. If there are no issues, then the suppliers invoice is sent directly to the accounts payable clerks. Next, accounts payable clerks will assign GL account numbers (to show the increase in inventory [debit] and the accounts payable [credit]) and the cost center number (e.g., what job the material should be charged to) for management accounting purposes. Accounts payable clerks will then enter the information into CODE and a voucher number will be automatically generated. Supporting documentation is printed and filed in the accounts payable file folders until payment is due. BPR Principles: 1. Have those who use the output of the process perform the process (reduce or eliminate handoffs). 2. Empower workers (give employees information and they can make decisions). 3. Treat geographically dispersed resources as though they were centralized (centralize data through a common database). 4. Link parallel activities instead of integrating their results (do not wait until the end of a process to merge the results). 5. Organize around processes, not tasks or functional area (use ERP systems, technology, and best practices). 6. Self-service; move cost and accountability for work to the beneficiary of a process (responsibility for information accuracy also transfers with self-service). 7. Put the decision point where the work is performed and build controls into the process (use automated controls in the process and transfer the responsibility for checking from management to the worker). 8. Capture information once at its source (data should be entered one time where it originates and then dispersed to those who need it) BPI: Process issues Authority ambiguity When two or more people are providing approval, this may be unnecessary as it reeks of bureaucracy and increases cycle time of the process. Bottlenecks When a number of information flows lead to a single activity, the process may be hindered by insufficient resources dedicated to the roles and events downstream. Bottlenecks can limit the performance or capacity of the entire system, delaying or completely stopping the process. Cycle time The time consumed during the entire process flow should be at the heart of performance measurement, providing focus on the length of time it takes from start to finish. Data duplication Occurs when multiple groups involved in the process begin maintaining their own separate information systems. Consequently, the same data are then kept in multiple places. Handoffs Involve the transfer of responsibility from one role to another, providing the opportunity for mistakes, miscommunication, and delay. Intermediaries Words such as pass it by me include an intermediary step. Consider if this step is value-added. Manual steps Technology and systems could be implemented to take the place of manual steps, which are labor-intensive and add to cycle time and errors. Old ways Technology and systems are available but not used because employees have not been trained (or have been trained and do not want to use them). Employees revert to old ways of doing things. Quality control Quality control is when someone else checks work, not when someone checks his/her own work. Is the quality control really needed? Can the work be mistake-proofed to make it impossible for the defect to pass on? Prevention is better than detection. Paper records Question whether the current process is adding, maintaining, or eliminating paper records. Storing data in electronic form is optimal as the data then become easier to share. Rework This refers to people spending time fixing errors or remediating problems. The source of the errors should be investigated and modification to the process made to eliminate the potential for errors. Role ambiguity Denotes lack of clarity about the expectations, norms, and behaviors associated with a particular job. Ambiguity can lead to inefficiencies in processes. Segregation of duties violations Employee should not be in the position to perpetrate and to conceal fraud. In general, duties to be segregated among employees are: (1) custody of assets; (2) authorization or approval of related transactions affecting those assets; (3) recording or reporting of related transactions