In pursuit of the perfect order: How to affordably achieve no-touch purchase order processing for every order from every customer without installing

Transcription

1 In pursuit of the perfect order: How to affordably achieve no-touch purchase order processing for every order from every customer without installing or maintaining anything.

2 Introduction Today s global supply chains face increased volatility. Complex supply chains combined with complex regulation and increased competition force companies to cut waste and then find ways to react to business demand with flexible resourcing. Manual order entry is the false start in the order to cash process. Behind the perfect order is a fusion of process and technology that ensures the order progresses with as little intervention as possible. The goal is to remove opportunity for error and to handle exceptions automatically using business rules. By automating purchase orders, order entry staff become free to focus on the business and its customers. The complex supply chain landscape. VARs Customers (B2B) Customer Consumers 1st tier suppliers 2nd tier suppliers Supplier Distribution centre Dealers/ distributors ERP Dealers/ distributors Co-manufacturers Copackers Business partner Service providers S&OP WMS 3/4PLs Your enterprise Slot booking Transportation Middleware TMS Freight forwarders Customs Payment & regulatory Payment agencies Banks Credit agencies Carriers Shippers 2. OmPrompt. The case for order automation.

3 Overview Although growth in enterprise IT spending is slowing, IT is expected to make a greater contribution to global industry in the next ten years than in any preceding decade. This is not a contradiction; IT is a realigned and empowered force driving the amorphous cloud, social, mobile and business collaboration. These changes are altering the way supply chains communicate. IT-led innovation is a tempting proposition for those looking for early release from the burden of managing supply chain communications on premise, or those who outsource to organisations that themselves rely heavily on manual involvement. Why? Because there is a third way that is less costly, less arduous and more flexible. A third way that introduces new levels of accuracy and transparency to order processing whilst reducing operational overhead. Emerging economies vie for market share in the West as the West seeks to tap new wealth in emerging economies. The speed at which new supply chains can be built or adapted is increasingly important. According to research conducted by the EDI Group of Thomson EC Resources, the average hub company used EDI with only 37% of its trading partners. This percentage declined to 23% for medium-sized companies. Embracing the new configuration of a multi-tenanted, private cloud provides new levels of scale; power and efficiency at a fraction of the cost of managing the process in-house. The cloud provides a way to work with or independently of the existing business infrastructure. Entire may be built and trading automatically in weeks. Typically, between half to two-thirds of a company s customers will generate enough in revenues and volumes of orders to warrant investment in EDI (electronic data interchange), leaving the rest to submit orders by phone, fax, or web form. New technology services allow those EDI-excluded companies to be on-boarded affordably and speedily. If all purchase orders can be automated (using a combination of managed service and EDI), order accuracy increases and cost to serve decreases. In the future EDI will be superseded by nimbler, more cost effective connectivity options. OmPrompt s own managed service combines state of the art software with a team of technology professionals who project manage integration and day-today operations. There is no software to evaluate or install and no expertise to maintain. A true story A subsidiary of Company A a consumer goods manufacturer with a stable of household brands reveals that 50% of the orders it receives require manual processing. The remaining 50%, received via EDI, are entered manually into its ERP system. Company A is a Fortune Global 500 Company. 3. OmPrompt. The case for order automation.

4 Background Between 30% and 70% of world s B2B purchase orders still require some form of manual processing. Purchase orders arrive in a variety of formats through a variety of channels fax, , web form, telephone and usually require a CSR (customer services representative) to process them. A manually processed order is less efficient, less accurate and less secure than an automated order. In the rush to meet demand in peak periods, the opportunity for error increases, and it is common for companies to employ extra staff to manage such events. Even EDI-formatted orders sometimes require manual intervention. EDI automates the order but the data must be accurate. CSR s are required to check for errors in product descriptions, codes, delivery information, order quantities and pricing. Many large companies shoulder the cost for this extra level of validation. OmPrompt offers customers a way to automate any purchase order received in any format, manage peaks and troughs, and only pay for what they use. With fewer errors to correct CSRs can focus on customers. Now it can be done, this White Paper explains how it is done and steps through the preparations. Typical connectivity landscape 100% 80% EDI: Up to 30% Non-EDI: Remaining 70% 60% 40% 20% Volume of business transactions per annum 0 Number of trading partners The OmPrompt connectivity landscape 100% All trading partners electronically enabled 80% 60% 40% 20% Volume of business transactions (per annum) 0 Number of trading partners 4. OmPrompt. The case for order automation.

5 The perfect order 1. The right product in the 2. right quantity from the 3. right source to the 4. right destination in the 5. right condition at the 6. right time with the 7. right documentation for the 8. right cost. Edward Marien, director of supply chain management programs at the University of Wisconsin. Necessary conditions for the perfect order: Automation (every order). Accurate master data. Calmed message traffic. Fast on-boarding of partners. Diminished lead times. Exception management. Single point of access for audit trails. What drives the need for change? For manufacturers and logistics service providers alike the high cost of remedying errors introduced by manual order entry; the need to reduce processing costs; the ability to adapt to market demands. Software-as-a-service powered by the latest technology presents a cost-effective alternative or supplement to EDI. Now the ease and speed of connecting supply chains overcomes cost and resource barriers. Customer service or transport office staff may offload back-office tasks and get back to the service desk. Companies must focus on what they can do best and appropriately outsource activities that value chain partners can do better. This often means using logistics, manufacturing or business process outsourcng partners, instead of performing these supply chain activities themselves. Michael Dominy, Research Director, Gartner. 5. OmPrompt. The case for order automation.

6 Achieving the perfect order why so hard? A fundamental setback with manually processing purchase orders is that managers generally have no visibility into the process until orders are actually entered into the ERP system. Without consolidated order processing it is hard to pinpoint which orders have come in, how many have been processed, and the value of orders yet to enter the system. Cost advantage The cost of hands-on processing is up to nine times more than an automatically processed purchase order. The cost of finding and correcting a paper-based, manually processed and filed purchase order will typically cost 20 40, but as much as 120 if the order needs re-entering. Order equality Every customer demands and deserves the best possible response to an order in terms of speed and accuracy. Customers who repeatedly wait for a response to an order query or receive the wrong goods or the wrong quantity at delivery can place an extraordinary burden on customer services by calling to check on the progress of every order. We benchmark FMCG companies for productivity cost per transaction type EDI versus non-edi. The cost of processing a non-edi order is up to 9 times the cost of a zero- touch EDI order. With penetration of EDI in FMCG ranging from 50% to 90%, automated order capture has the second highest impact on cost effective customer service. Jonathan Kittow, Simply Supply Chain. And on the supply side, the cost of reverse logistics, write-off s or compensation for customers can be significant. A true story Company B a global wholesaler of household-name wines reduced processing requirements for one highly complex 47 page order to 1 hour including error correction time. Pre-automation the exercise took 2 CSRs 2 days to complete. 6. OmPrompt. The case for order automation.

7 Why managed-for-you technology is the best order processing solution for your EDI exclusion zone. A. The manpowered solution: recruit additional order processing staff or outsource manual entry. Cost to you: Opex Errors Management overhead B. The technology solution: build or buy your own automation tools. Cost to you: Capex Opex Errors Management overhead C. The managed technology solution: outsource to the automated processing experts. Cost to you: Opex Errors Management overhead 7. OmPrompt. The case for order automation.

8 OmPrompt Order Automation, the managed technology solution Customer orders Submitted in any format Purchase orders _EDI _Document _Image Auto forward The OmPrompt intelligent messaging hub Data extraction Master data _Product meta-data _Customer meta-data BWR _Validation _Correction _Substitution _Validation Data transformation Data routing Alerts and notifications Customer portal/audit trail Data delivery Any format Order visibility Customer services Enterprise Business applications (ERP) 8. OmPrompt. The case for order automation.

9 OmPrompt s 5 steps to order automation Step 1: OmPrompt will support business case with roi evidence Step 2: OmPrompt will define the business process scope automation needs on-board trading partners Step 3: OmPrompt applies intelligent messaging automated mapping data cleansing Step 4: OmPrompt operates workflow monitoring error correction business rules Step 5: Client access via OmPrompt web portal audits events KPIs intelligence Now you ve read the book click here for the tour. Healthcare Ken Sayer kensayer@omprompt.com +44 (0) Ken on LinkedIn Contact: OmPrompt Limited 67 Milton Park Abingdon Oxfordshire OX14 4RX UK +44 (0) info@omprompt.com Consumer goods Jamie Nichols jamienichols@omprompt.com +44 (0) Jamie on Linkedin 9. OmPrompt. The case for order automation.