Performance Analysis and Improvement of a B2B’s Supplier-Side E-Tender Driven Internal Process: A Discrete Event Simulation Study

Abstract

In business-to-business (B2B), e-tendering is often mandated in situations where significant amount of money is involved in procurement of goods and services. This study focuses on Order-to-Cash (O2C), a sub-process of the larger Inquiry-to-Cash (I2C) process – an e-tender driven internal marketing process of a typical B2B company. The complete I2C is managed as two sub-processes – Inquiry-to-Order and Order-to-Cash. This study attempts to model, analyse, and improve the O2C sub-process of a typical original equipment manufacturer (OEM) using stakeholder-based discrete event simulation modelling (DESM). In recent times, engaging stakeholders in pre-model, model, and post-model coding stages is gaining attention which significantly impacts the study’s design as well as the interpretation of results. The existing and improved process is modelled using ARENA simulation software with inputs from stakeholders. In this study different scenarios are developed based on manpower combination of technical (T) and non-technical (N) skills in both existing and improved process to find out the near optimal scenario suitable for implementation by the organization. For optimal scenario in both existing and improved process, there is large improvement in key performance indicators (KPIs) such as waiting time, cycle time, and WIP (nos.) but with a trade-off in resource utilization of manpower acceptable to stakeholders.