Order Pipeline Analytics for Manufacturing Companies

Manufacturers are often tasked with growing revenue while maintaining contribution margin. This can lead to an examination of the quote-to-cash sequence.  It is believed that revenue cycle analytics, which measure and manage the conversion rates and cycle times of quote-to-cash stages, will provide both the quantifiable basis and action plan configuration for success. The complexity in administering this environment requires the utilization of an analytic methodology that is able to monitor changes in the metrics that define opportunity and threats over time. 

Listed below are four analytics in action which will add value to the order processing pipeline:

Incorporate analytics for improving conversion rates – Quote to Order

• Business Benefit – Conversion rate improvements are accomplished through the utilization of analytics that focuses on the profiles of winners in comparison to losers.  Influential variable assessments can point to underlying demographics allowing staff to concentrate on the most viable request for quotes.

Incorporate analytics for reducing cycle time – Quote to Order

• Business Benefit – By calculating stage duration and applying the time value of anticipated revenue, trends can be identified. This functionality allows management by exception and objective.  Both are critical components in analytic-directed early intervention.

Incorporate analytics for improving conversion rates – Invoice to Collection

• Business Benefit – The primary conversion rate opportunity is found in the ability to use analytics to identify losses early in the write-off/concession cycle and to proactively intervene.  By being aware of the profile of problem customers and managing their payment process through the ageing cycle, a portion of losses can be avoided.

Incorporate analytics for reducing cycle time – Invoice to Collection

• Business Benefit – Exposure management presents a complete picture of quotes, orders and receivables at the customer and segment level allowing decision-makers to better manage risk such as assessing pending shipments to delinquent customers.

 Conclusion:

By deconstructing the order processing pipeline into discrete milestones and taking an analytical focus, both conversion rates and cycle times can show significant improvements.