DRIVING THE TRIPLE C FACTOR Costs down, compliance up and cycle time contracted
Industry reference Aberdeen Group (2007) 5% reduction in bottom line costs 20% improvement in the top line Paper manufacturers embrace electronic media Good business practice Improving productivity
Driving the triple C factor: Costs down Compliance up Cycle time contracted
Your key take-aways Higher satisfaction Business process improvements Improved internal audit reports
Our business Planting Seedlings Maintenance R&D Fellings Transport Shorthaul Depot
Our business Good returns Strong balance sheet To ensure that Sappi is an exciting, growing and profitable leader in paper and specialised cellulose.
Our business How? Maintaining and growing global leadership position as a low cost dissolving wood pulp producer Growing high margin speciality paper business in all regions Smaller and simpler low cost graphic paper business Maximising value from our forestry operations in SA
Our diverse business = broad supplier base
Our business: touching you
Our business: bringing it home
Our biggest asset: our people
Global footprint, local flavour
Our business: countrywide Ngodwana 195kton paper pulp 230kton kraft paper 140kton newsprint 210kton dissolving wood pulp Enstra 200kton uncoated fine paper 42% local uncoated paper 28% coated fine paper Stanger 110kton coated paper & tissue 60kton pulp Tugela 280kton kraft paper 130kton paper pulp 40% of SA s packaging paper requirements Cape Kraft 60kton kraft paper 36% of local newsprint supply
Shared services Industry hype: shared services Accounts payable: goods and services
Shared services Opportunity for Sappi Reduce waste Lean six sigma: green belt Business process mapping
Shared services Reduce geographical creditors clerk footprint Business process mapping: as-is at the time, identify gaps, propose opportunities Re-deploy team centrally, right sizing exercise Another challenge borne courier costs, lag time in transporting invoice to hub Birth of technology Scan paper invoices / capability to receive SARS compliant email pdf (128kb encrypted)
Technology investigation Business process management Technology feasibility and capability Value engineering
Value engineering Accounts payable and expense Multiple payment methods including electronic payments Time recording and travel booking Travel charges are integrated with payroll Automatic audit Travel and expense reporting Integrated with the G/L Automatic alerts
Value engineering Key metrics: AP AR Total external audit cost incurred (in selected currency) Average cycle time for creation of annual forecast (in days) Average time to create a new report for which there is no previously defined report template (in days) Average time to close monthly books (in days) % discounts lost from suppliers Average discount (in %) Annual purchase amount eligible for discounts (in million currency) % of invoices using online processing
Value engineering Key metrics: AP AR continued % of payroll errors Average days sales outstanding (in days) Accounts receivable balance (in million currency) % of receivables overdue Uncollectible A/R write-offs (bad debts) in past year (in million currency) % of errors in bills sent out
Value engineering Shared services hub for account payments Task: process 144k invoices annually across 8 company codes
Enter ReadSoft Preferred technology of choice: Evaluated alternate products in the marketplace and competitors are present at Saphila 2014. Sappi EU and NA use the product, so it was a non-event in the choice of ReadSoft. Sappi single SAP project presented timeline and challenges, resulting in upgrade to EUNA s ReadSoft environment.
Enter ReadSoft Preferred technology of choice: Input Paper Image file PDF XML Fax Email Invoices Invoices Configuration & administration Manager Production Scan Interpret Verify Transfer Interpretation tuning Optimise Output Invoice image files Invoice data Target system
Measures of success ReadSoft tool with optimised functionality Right first time: Invoices processed per clerk per day Opportunity for continuous improvement 70% 31 (EU standard in Poland is 33)
Measures of success Overdue workflows 1118 906 669 685 719 689 587 August September October November December January February
Measures of success
Readsoft Invoices processed
Continuous improvement Slow response time Hardware Infrastructure Architecture
Continuous improvement Technology focus: tweaking the engine Optimising the scan to improve right first time
Continuous improvement Training: Goods receipt, service acceptance and workflow handling Improve GR/IR Reduce workflows Touch less invoices
Way forward Shared services AP is proving success Payroll next opportunity
Self-reflection Costs down Compliance up Cycle time contracted
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Koosh Panday Mobile +27 83 235 2932 koosh.panday@sappi.com LinkedIn: koosh.panday@telkomsa.net