Profiles in Supply Chain Enablement: A specialty materials manufacturer automates its invoice processing to increase productivity, accuracy.
Company: Rohm and Haas (Philadelphia, PA)
Company Size: Large
Company Sector: Process Manufacturing
Area(s) of Enablement: Payment, Supply Chain Integration & Infrastructure, Decision Support
Enabler: GXS (Gaithersburg, MD)
Case Study: Rohm and Haas is a $6.4 billion USD (2003) global specialty materials company based in Philadelphia. Its products are sold primarily for use in the construction and building, electronics, household products and personal care, packaging, food and retail, and automotive markets. The company operates six business segments: Coatings, Adhesives and Sealants, Electronic Materials, Performance Chemicals, Salt and Monomers. To serve these markets, Rohm and Haas operates more than 100 manufacturing and 30 research facilities in 27 countries.
The Challenge
With manufacturing facilities located around the globe, the company's buyers interact daily with thousands of suppliers. As a result, the company deals with a host of suppliers with differing levels of technical sophistication, ranging from those that send and receive purchase orders and invoices via fax, mail and phone to those with state-of-the-art B2B systems.
Rohm and Haas saw a significant opportunity to eliminate the unnecessarily high operational costs and supplier management challenges within manual invoice processing. The manual process involved Rohm and Haas' buyers and accounts payable personnel, as well as external suppliers, manually re-keying paper and fax invoices, and addressing document matching and data quality reconciliation issues. Additionally, productivity was lost answering supplier questions and concerns regarding invoice and payment status.
The Solution
To address these challenges, Rohm and Haas turned to GXS' Order Lifecycle Visibility (OLV) solution to provide its trading partners with a Web-based, self-service portal for creating and managing electronic invoices. An integrated part of the GXS Trading Grid, OLV provides Rohm and Haas with online invoice creation, order-to-invoice matching, invoice and payment status, invoice-specific data validation rules, standard integration to the company's back-office enterprise system, and a centralized data repository for Rohm and Haas' supply chain information.
All these capabilities translated into a consistent process and view of the extended supply chain for Rohm and Haas and its worldwide suppliers, providing the benefits of automation and productivity, payment efficiencies and strengthened relationships with suppliers.
Rohm and Haas uses the GXS solution for supplier submission of product as well as service invoices. One advantage of the system is the invoice-specific data quality and business process rules that prohibit the submission of inaccurate data such as "Remit To" address. These rules ensure the accuracy of data before invoices are processed by the back-office system. Now the company receives accurate invoices electronically, and its back-office system can then process them. This lowers Rohm and Haas cost of operation, and, importantly, it strengthens the company's relationships with its suppliers because the payment cycle is shortened.
ROI
Rohm and Haas has seen improved productivity, with personnel previously assigned to the manual process now able to focus on core business responsibilities such as order and inventory management. In addition, the company has experienced reduced operating costs, because with high-quality data, online invoice collaboration and visibility, Rohm and Haas has eliminated the cost of manual invoice re-keying and status updates. Overall, through GXS, Rohm and Haas' has achieved a 95+ percent first-pass invoice post rate, a significant improvement over the previous level of less than 75 percent.
Finally, the company has gained increased value from its existing investments, since OLV complements Rohm and Haas' existing back-office systems with information from the extended supply chain.
Suppliers, too, have benefited, as standardizing on Rohm and Haas' OLV system has strengthened each supplier's working relationship with the company and increased the potential for additional business. Suppliers also have seen reduced operating costs, and, with online visibility to invoices and invoice status, suppliers can better plan for their expected payments and can more quickly respond to issues that could slow down payment.
Next Steps
In addition to the initial implementation, Rohm and Haas planned to continue rolling out the GXS solution to 350 total online suppliers by September 2005. As a result of the success it has seen with the invoice processing capability, the company also plans to extend usage of the system to include the forecast, order module and analysis tools.
For more stories of successful supply chain implementations, read the "2005 Supply & Demand Chain Executive 100" article in the June/July 2005 issue of the magazine. Also watch the Today's Headlines section of SDCExec.com every Tuesday and Thursday for more in depth best practices drawn from this year's Supply & Demand Chain Executive 100.
Company: Rohm and Haas (Philadelphia, PA)
Company Size: Large
Company Sector: Process Manufacturing
Area(s) of Enablement: Payment, Supply Chain Integration & Infrastructure, Decision Support
Enabler: GXS (Gaithersburg, MD)
Case Study: Rohm and Haas is a $6.4 billion USD (2003) global specialty materials company based in Philadelphia. Its products are sold primarily for use in the construction and building, electronics, household products and personal care, packaging, food and retail, and automotive markets. The company operates six business segments: Coatings, Adhesives and Sealants, Electronic Materials, Performance Chemicals, Salt and Monomers. To serve these markets, Rohm and Haas operates more than 100 manufacturing and 30 research facilities in 27 countries.The Challenge
With manufacturing facilities located around the globe, the company's buyers interact daily with thousands of suppliers. As a result, the company deals with a host of suppliers with differing levels of technical sophistication, ranging from those that send and receive purchase orders and invoices via fax, mail and phone to those with state-of-the-art B2B systems.
Rohm and Haas saw a significant opportunity to eliminate the unnecessarily high operational costs and supplier management challenges within manual invoice processing. The manual process involved Rohm and Haas' buyers and accounts payable personnel, as well as external suppliers, manually re-keying paper and fax invoices, and addressing document matching and data quality reconciliation issues. Additionally, productivity was lost answering supplier questions and concerns regarding invoice and payment status.
The Solution
To address these challenges, Rohm and Haas turned to GXS' Order Lifecycle Visibility (OLV) solution to provide its trading partners with a Web-based, self-service portal for creating and managing electronic invoices. An integrated part of the GXS Trading Grid, OLV provides Rohm and Haas with online invoice creation, order-to-invoice matching, invoice and payment status, invoice-specific data validation rules, standard integration to the company's back-office enterprise system, and a centralized data repository for Rohm and Haas' supply chain information.
All these capabilities translated into a consistent process and view of the extended supply chain for Rohm and Haas and its worldwide suppliers, providing the benefits of automation and productivity, payment efficiencies and strengthened relationships with suppliers.
Rohm and Haas uses the GXS solution for supplier submission of product as well as service invoices. One advantage of the system is the invoice-specific data quality and business process rules that prohibit the submission of inaccurate data such as "Remit To" address. These rules ensure the accuracy of data before invoices are processed by the back-office system. Now the company receives accurate invoices electronically, and its back-office system can then process them. This lowers Rohm and Haas cost of operation, and, importantly, it strengthens the company's relationships with its suppliers because the payment cycle is shortened.
ROI
Rohm and Haas has seen improved productivity, with personnel previously assigned to the manual process now able to focus on core business responsibilities such as order and inventory management. In addition, the company has experienced reduced operating costs, because with high-quality data, online invoice collaboration and visibility, Rohm and Haas has eliminated the cost of manual invoice re-keying and status updates. Overall, through GXS, Rohm and Haas' has achieved a 95+ percent first-pass invoice post rate, a significant improvement over the previous level of less than 75 percent.
Finally, the company has gained increased value from its existing investments, since OLV complements Rohm and Haas' existing back-office systems with information from the extended supply chain.
Suppliers, too, have benefited, as standardizing on Rohm and Haas' OLV system has strengthened each supplier's working relationship with the company and increased the potential for additional business. Suppliers also have seen reduced operating costs, and, with online visibility to invoices and invoice status, suppliers can better plan for their expected payments and can more quickly respond to issues that could slow down payment.
Next Steps
In addition to the initial implementation, Rohm and Haas planned to continue rolling out the GXS solution to 350 total online suppliers by September 2005. As a result of the success it has seen with the invoice processing capability, the company also plans to extend usage of the system to include the forecast, order module and analysis tools.
For more stories of successful supply chain implementations, read the "2005 Supply & Demand Chain Executive 100" article in the June/July 2005 issue of the magazine. Also watch the Today's Headlines section of SDCExec.com every Tuesday and Thursday for more in depth best practices drawn from this year's Supply & Demand Chain Executive 100.
