Daily Archives: November 13, 2013

Are Your Invoices Out of Control? Want To Do Something About It?

Paper, paper everywhere
all the desks did warp.
Paper, paper everywhere
enough to fill a thorp!

Despite the recent appearance on the market of some modern solutions that can revolutionize invoice management and automation at even the largest Fortune 500 and Global 3000 companies, the state of e-invoice and AP Automation today is dismal. The 2012 AP Automation Survey Report found that 9 in 10 organizations still deal with paper invoices and that 90% of invoices are paper-based in half of the organizations that responded!

Moreover, Aberdeen’s 2012 study of of 180 organizations, reported in AP Invoice Management in a Networked Economy, found that laggard organizations, which represent the bottom 30% of organizations, require an average of 16.3 days to process an invoice from receipt to approval. The good news: this is a significant improvement over their 2009 study on E-Payables: Invoice Receipt and Workflow that found laggard organizations required an average of 32.9 days to process an invoice. The bad news: it’s still a very large amount of time, especially if an organization wants the opportunity to take advantage of early payment or dynamic discounting.

As a result, the average organization spends somewhere between $30 and $40 just to process a single invoice! In other words, with the exception of best-in-class organizations that heavily employ modern invoice automation solutions and only spend an average of $3 to $4 to process a single invoice, invoices are out of control in 4 out of 5 organizations. But they don’t need to be!

To find out how you can get your invoices under control, join Sourcing Innovation and Nipendo next Tuesday, November 19, at 8 am PST / 11 am EST / 4 pm GMT for a live webinar on How to Make Invoice Automation Pay Off! In this webinar we will cover the challenges in the invoice process, how traditional e-Procurement technologies have let us down, what is required for true end-to-end invoice automation (and the 80% cost savings that can be obtained therefrom), how the Nipendo Supplier Cloud (which facilitates over 5 Billion in Procurement a year) fits the bill, and how it enables Israel Aerospace Industries (IAI) to reduce its paper-process by over 90% through the electronic receipt and processing of over 100,000 e-Documents from over 3,000 suppliers each year — which has already allowed IAI to reduce its operational overhead by over 50% in two years.

In addition, attendees will be the first to receive Sourcing Innovation’s new Illumination on An End-to-End Invoice Automation Framework — Benefits & Best Practices! So Sign Up today. Space is limited.

Arena – Taking PLM Deep Into the Supply Chain Part II

In Part I we noted that Arena, since we last covered The Arena Solution in 2007, extended their PLM solution that was built around BOM (Bill-of-Material) Management, Item Management, and Change Management to support (better) Document Management, Quality Management, and Compliance Management. We also noted that they added more enterprise integration capabilities to ensure that their PLM solution integrated with all of the major ERP and MRP solutions on the market. We briefly covered these solutions before noting that, on top of these additions, they just released four new capabilities on top of their existing platform that we are going to cover in depth today.

Arena Projects
Arena Projects is a fully-functional project management solution that is fully integrated with the rest of the Arena suite which adds the dimension of product data to Project Management and allows for product-level production schedules to be defined and integrated with the master project schedule. Like every other project management solution, every project can be attached to a program, given a manager, assigned a start date, given milestones (composed of tasks) and target dates, and updated when a task is completed or milestone is reached. In addition, as it was developed on top of a PLM solution to support NPD/NPI (New Product Development / New Product Introduction), projects can be broken down into the conception, planning, development, manufacturing release, and launch phases. Statements of work and other supporting documents, can be attached and participants can leave notes on projects and issues as the project progresses. And, most importantly, all of the schedules associated with all of the projects in a program can be rolled up to provide a program manager a master view of status. In addition, there is a user view that allows a user to see all of her assignments across projects, recent notifications, documents she has access to, and actions she has to complete.

The solution was also designed to support CAPA (Corrective and Preventive Action) projects and has a built-in understanding of the process that consists of team establishment, problem definition, interim containment actions, root cause identification, corrective action identification, corrective action implementation, best practices to prevent recurrence, and project closure (with the recognition of team efforts). This built-in template makes setting up a new CAPA project, which can be linked to products already in the system, a breeze. The Project module is also integrated with their new Reporting module that can access any and all data in the system, so it is easy for a manager to get a handle on all projects under her purview or for an engineer to see the status of all projects on which he is assigned tasks and prioritize his work appropriately.

Arena Demand
Arena Demand is their demand management solution. Like other demand solutions, it allows a user to enter a forecast against multiple BOMs, aggregates the total demand for required parts or materials against multiple products, and presents the user with the total demand for each part or raw material along with any cost and sourcing information in the system. It’s an obvious feature that, for the longest time, was missing from many PLM systems. And while basic demand management capability will often exist in the MRP that the PLM provider will assume the organization has, the PRM provider is actually making two assumptions here that aren’t always true. The first assumption is that the organization has a higher-end MRP (which isn’t always the case for mid-sized manufacturers with limited IT budgets) and the second assumption is that the customer can easily get the relevant PLM data in the relevant format out of the PLM solution and into the MRP (which can require IT expertise the manufacturing organization does not have). Plus, sourcing doesn’t want to deal with an MRP — they just want a report that, for each product or raw material, presents them with total aggregated demand for the relevant time period, historical cost data, and known sources of supply.

The Arena Demand solution is quite easy to use — for each product, the manufacturing (or marketing) organization can input the expected demand by month or quarter and the solution spits out a report of demand by component part or raw material for the same time period, augmented with known supplier part matches and historical costs, if desired. In addition, since the solution is also tightly integrated with the Reporting platform, the sourcing team can filter in to specific programs, categories, or parts, or even suppliers of interest (if the sourcing team is looking to potentially aggregate volume to preferred suppliers for additional savings).

Arena EI
Arena EI, short for Arena Enterprise Integration, as we noted yesterday, is a new Open RESTful API that can be used to push data into Arena from any system and pull any and all data out of the Arena solution that needs to be pushed into other organizational systems. Supporting JSON data transport over secure https with session ID authentication, the API is flexible, powerful, and secure. And since it has access to all of the data in the Arena platform, it is a powerful, complete solution for data interchange into and out of the Arena platform.

Arena Exchange
Arena Exchange, which is the most revolutionary of the new Arena offerings, introduces the ability for real-time supply chain collaboration to include all impacted parties across multiple tiers of the supply chain during new product introduction, and the solution does so with unprecedented ease. It paves the way for a paradigm shift in the way manufacturers can manage the design and development of new products in an inclusive, but still secured and controlled, fashion.

In the Arena Exchange solution, any one can invite supple representatives to view, comment on, and approve bid packages, sub-packages, or even individual components — as each user can limit the data that the invitee sees to only the data she needs to see. In addition, if the invitee doesn’t have all of the input required for her part of the bid-package, she can carve out a chunk and send that off to someone on her team or to her supplier representative if needed. The relevant parts of the PLM can go all the way down to the tier-3 supplier shop floor for rework if need be, and the business impact of this up-front visibility and collaboration will be better DFM (Design for Manufacturing), faster TTM (Time-to-Market) due to fewer errors, less scrap and rework, lower cost, and higher quality.

The platform, which can be put on top of any PLM solution (not just Arena’s) that stores its files in standard PDX (Product Data eXchange) format (an international electronics manufacturing initiative standard), has a very simple interface that allows the user to access the specifications, bill of materials, sourcing information attached files, and (change) history by item, manufacturer item, and vendor item. The user can then add comments, send (selected portions) of the BOM to an existing (or new) user, add reviewers, define due dates, submit approvals, and ask questions. Drill-down is easy, so the user can quickly get to the appropriate sub-assembly, component, part, or raw material. At any time, the user can see the (rolled-up) status of the raw materials, parts, components, sub-assemblies, and assemblies within her purview as well as which users didn’t respond. Arena Exchange is the solution the PLM industry has been missing and should be evaluated by any manufacturing organization wanting to take their NPD and NPI processes to the next level.