'When Ford's purchasing department wrote a purchase order,it sent a copy to accounts payable. Later, when material control received thegoods, it sent a copy of the receiving document to accounts payable. Meanwhile,the vendor sent an invoice to accounts payable. It was up to accounts payable,then, to match the purchase order against the receiving document and theinvoice. If they matched, the department issued payment. The department spentmost of its time on mismatches, instances where the purchase order, receivingdocument, and invoice disagreed...'

Hammer advised Ford to implement a radical redesign of its business process, namely through the elimination of the invoice. In the new situation the buyer registers an order in an online database. The buyer no longer sends a copy of the purchasing order form to the creditor administration. When the goods arrive at the store, the storekeeper checks in the database whether the received goods correspond to the purchasing order form (nb: previously the employee did not receive a copy of the purchasing order form). If these correspond, the storekeeper accepts the goods and registers the reception of the goods in the computer system. If the store keeper cannot find data of the supply in the database, goods are simply sent back. According to Hammer Ford experienced a dramatic improvement through this radical change. It was contended that a 75% decrease in personnel in the accounts payable department resulted from the implementation of the redesign.

  The Ford-case is frequently used to exhibit that this intuitive way of redesigning business processes does not come without risks and that a more mature and supported approach is needed. Hammer's advice to eliminate the invoice is not the only possibility to gain improvements. An alternative which could have been analyzed is supply based on consignment, so that purchasing and supply management takes place at the supplier, whilst invoicing takes place periodically. Another suggestion could have been to no longer divide the supply transaction within Ford into three hierarchical departments but to unify these into one department. Aside from coming up with these suggestions, one must think about the partical consequences.

  Imagine a pipe dealer has managed, with much difficulty, to place an order for an economically interesting product in Italy, but the supplier only supplies a part of the order. Does the storekeeper send the order back? The decision is made more complicated when the Italian chauffeur claims that his colleague is on the way, but is caught in traffic. How does the elimination of the invoice then prevent extra work? A more scientific analysis of the Ford-case, with help from DEMO methodology, shows that there are only two business transactions: the order delivery and order payment. The principal of the order delivery transaction is Ford and the executor is the supplier. In the payment transaction the oppostite is the case. Thus a remarkable conclusion that can be made is that there is actually no difference between the situation before and after the radical elimination of the invoice by Hammer. The changes that Hammer implemented are that only complete orders are accepted in a purchasing order and that the order delivery form counts as the invoice.