The lack of order visibility and invoicing delays can disrupt business commerce across a supply chain. That drove Nalco, a global water treatment and process improvement company, to automate the processing of purchase orders, order-related documents, and invoices.
As a featured presenter on the October 21 webinar: “Extend Your ERP for Better Supply Chain Collaboration,” Belinda Cordina of Nalco Procurement: Compliance, Systems, and Processes, discussed the problems from not being able to access order status in real time. “Lack of visibility starts with the PO,” said Cordina. “Five percent of our POs were not being received and we were in the dark with shipment information.”
With no automation, Nalco had a customer service team of seven people calling third-party drop shippers to check on order status. These distributors would bill Nalco once they received an order; upon receipt of the distributor invoice, Nalco would bill its customers. Lost and delayed orders meant that Nalco could not bill its customers in a timely manner, and that contributed to extensions in Days Sales Outstanding (DSO). Often, Nalco would not know about a delayed order until a customer called about it. “We faced so many challenges around order visibility that we began looking at ways to connect electronically,” said Cordina.
Nalco chose Ariba because so many vendors were connected to the Ariba Network. Through the Ariba Network, Nalco can manage delivery of POs and PO change orders and receipt of order confirmations, advance ship notices, and invoices electronically.
By replacing a manual effort with a business network that improves collaboration with business partners and customers, Nalco has improved customer service and now can send out customer invoices at the same time a product ships. “This is one of the main reasons that we wanted to connect vendors to the Ariba Network,” said Cordina.
The first wave of enablement targeted sensitive distributors that were quick to place credit holds on Nalco when orders were delayed. “They were all for it,” said Cordina. “The system gave them visibility when they would be paid and improved our payment terms.”
Nalco communicated a strong message to their business partners to drive adoption. For those that resisted, a simple follow up call explaining the value was enough. “Once on the Ariba Network, they see the benefits,” said Cordina, adding that in many cases, theses companies would see that many of their customers and suppliers were also active on the Ariba Network.
To access the webinar recording, click here.