The problem with writing and publishing from a stream of consciousness is that sometimes you say things you might want to reconsider.  I have been thinking about my statement in the last post that exceptions to exceptions are illogical.  Consider the following…

An enterprise decides that its factory process is that it will conduct its business with its customers electronically.  Say the enterprise is a utility company.  It emails the monthly bills to every customer and includes a link to its electronic payment website.  This makes it simple for the customers to comply with the utility’s wishes.  Or does it?

Assume that every customer can receive the bill.  That doesn’t mean that every customer has the ability to pay electronically because not every customer may have a bank account or payment card.  Then there is that group of unruly customers who just refuse to make electronic payments.  Assume that these groups comprise a number large enough that failure to accommodate their needs will severely hamper collections of revenue necessary to keep the enterprise going.

The enterprise now has an exception process that must process old-fashioned payments where the customer returns a coupon or remittance advice with a paper check.  Since the volume is significant, the utility must have a reasonably efficient process to minimize costs.  So a factory process is set up to efficiently process paper coupons and checks.  It starts with the utility including a remittance coupon that the customer can print and return with his check.

The rest of the process can be built either by investing in the process or outsourcing to a lockbox operation.  The factory-compliant transaction is where the coupon and check arrive together and the check amount matches the amount that was billed.  These transactions flow right through the new factory process for the exception process.  The output from this process should resemble an electronic payment so that it can be submitted to the enterprise factory process immediately upon completion.

What can go wrong now?  We now have the following three exceptions to the exception:

  • Only the check arrives
  • Only the coupon arrives
  • The amount on the check doesn’t match the amount on the billing coupon

So what’s the lesson here?  It is that there should exist factory processes within exception processes where the incidence of exception is going to be very high and the enterprise has little way to control customer behavior.  These factory processes should be managed just like the enterprise factory process in order to maximize efficiency and minimize costs.  The output from this exception process should reenter the enterprise factory process as quickly as possible.  But there are also exceptions to be encountered that the exception factory process can’t handle.  These should be managed at the department level just like exceptions to the enterprise factory process are managed at the enterprise level.

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