Revamping our approval flow: Executive approval is now mandatory for high-value projects! This will ensure greater transparency and stronger risk management.
At DonGan Manufacturing, instances of high-value proposals proceeding without executive approval have been identified, highlighting issues with decision-making authority regulations and loss risk. To address this, a workflow requiring executive approval for high-value proposals (over 5 million yen) has been implemented. After a manager review, the proposal will be subject to executive approval, followed by sending customer notifications, ensuring swift and accurate operations.
*This process improvement story is a work of fiction. Any resemblance to actual persons, entities, or events is purely coincidental.
1. Issue: Risk of High-Value Proposals That Have Not Been Approved
DonGan Manufacturing is a company with approximately 200 employees that manufactures and sells industrial equipment. In the company’s quote approval process, the staff member responsible creates a quotation based on customer requests, which is reviewed by a manager before being sent to the client for notification.
Nevertheless, cases where high-value proposals proceeded without executive approval have been identified, causing inconsistencies with decision-making authority regulations and operational flow. This heightens the risk of inappropriate estimates, posing potential risks of loss to the company. To avoid such risks and improve operational alignment, a comprehensive review of the approval process is urgently needed.
2. Solution: Mandate Executive Approval for High-Value Projects
The process owner will revise the workflow to make executive approval mandatory for high-value proposals. Specifically, estimates exceeding 5 million yen must be approved by an executive after being reviewed by a manager, and then a notification will be sent. This improvement streamlines the communication channels, enabling swift and accurate operations.
Before
View details of the workflow diagram
1. Quotation Creation
The person in charge manually enters the quote.
2. Manager Review
The manager reviews the quote content and sends it back if there are any deficiencies.
1x. Quotation Revision
The quote is revised and resubmitted
Approval Notification
Once approved during the manager’s review, a notification email is sent.
After
View details of the workflow diagram
1. Quotation Creation
The person in charge manually enters the quotation details.
x1. Quotation Revision
Revise the content and resubmit it.
2. Manager Review
The manager checks the quotation content and sends it back if there are any deficiencies.
3. Executive Approval
The executive in charge approves or rejects high-value cases.
Approval Notification
An email notifying the approved content will be sent.
Rejection Notification
An email notifying the rejected content will be sent.
3. Benefits
Risk Mitigation
- By adding a reliable executive approval step that ensures that high-value projects are not overlooked, the risk of loss is prevented.
Strengthening Internal Controls
- Aligning decision-making authority regulations with operations improves audit readiness and strengthens internal controls.
Enhancing Process Reliability
- With increased transparency across processes, employee compliance awareness improves, establishing a trustworthy operational flow.
*This process improvement story is a work of fiction. Any resemblance to actual persons, entities, or events is purely coincidental.
4. Other Business Applications
Enhancing the Purchase Request Process
Make department head and executive approval mandatory for high-value purchase requests. Establish an approval flow to prevent wasteful purchases and excessive spending.
Optimizing Budget Approvals
New projects exceeding a defined budget threshold require executive approval. Proactive risk assessment is crucial before project commencement to mitigate potential budget overruns.