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Means to Digital Transformation is End-to-End for Avery Dennison

Feature Article | September 1, 2016 by Chris Rauen

What is the value of a label on a package? For Avery Dennison, it’s an opportunity to make a brand more inspiring, and the world more intelligent.

That’s the mantra the company lives by.

With this focus on product innovation, Avery Dennison can’t waste time managing transactions with suppliers. That’s why the company chose to digitize operations from sourcing through payment, connecting with suppliers over a business network.

Avery Dennison can’t waste time managing transactions, so they digitized operations

Here were the objectives:

  • Digitize paper-based processes to maximize efficiency, lower costs
  • Reduce the risk of human error and fraud
  • Capture line-item invoice detail and share with sourcing and procurement teams to Improve control over spending

The scope was end-to-end, source-to-settle, and a key component was digitizing the invoice process. For many organizations, invoice automation involves receipt of PDF invoices through email. “We’ve had that for years, but that’s not e-invoicing,” said Maarten Eddes, Avery Dennison global business process and systems manager. For Avery Dennison, e-invoices are processed through the Ariba Network, matched with POs and receipts, and then reconciled for payment. “It’s as simple as that,” he said.

Invoice automation at Avery Dennison does not operate in a vacuum. It is tightly integrated with complementary cloud solutions for spend analysis, sourcing, contract management, and procure-to-pay. That’s an advantage of working with a business partner that offers an end-to-end solution suite, coupled with a business network.

“With SAP Ariba solutions, we have completely transformed procurement at Avery Dennison,” said Eddes. “Previously, paper invoices and purchase orders would be sent back and forth between offices for approval and payment. Now, everything is done digitally, saving us considerable time, money, and effort.”

The results of this initiative show the broad impact across the organization.

  • Compressed invoice processing cycle from 23 days to 5 days
  • Improved compliance through use of catalogs, a no PO-no Pay policy, and PO-Flip capabilities to promote straight-through invoice processing
  • Saved 400 hours per week (equivalent of 10 full-time employees) for buyers in procurement and AP staff from reduced match exceptions and fewer supplier inquiries (as suppliers now have a portal for self-service)
  • Reduced number of lost POs and invoice exceptions substantially (by 70%)
  • Improved on-time payments performance and Days Payable Outstanding (DPO)
  • Automated workflows to eliminate human error and significantly lower fraud risk
  • Cleansed master vendor data and consolidated the number of suppliers
  • Distributed a mobile app so employees can work on the go

Avery Dennison is on track to drive 100 percent electronic invoicing for its indirect spending across North America and Europe, and expand its cloud-based procure-to-pay solution across Asia and Latin America. It is also considering Ariba Spot Buy to better manage off-contract spend, and reduce supplier counts by close to 50 percent in certain categories.

To achieve these results required tight alignment across sourcing, procurement and accounts payable. In addition, the solutions had to manage the complexity, but not be complex to use. To promote adoption, added Eddes, “they have to be simple.”

So it is at Avery Dennison, where digital transformation enables the company to Run Simple, end-to-end.

You can learn more about Avery Dennison’s journey to digital transformation in this video.

This post originally appeared on SAP Business Trends.

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