The Dulux Group is well known for their paints but they also own a bunch of other well known brands with Yates, B&D garage doors, Selleys sealants and adhesives and a heap of construction products. Their head of procurement, Ian Griffith, told the audience at a break out session at the recent SAP Ariba Live event held in Sydney about the company’s investment in new technology in order to hold their position of market leadership and maintain their manufacturing, supplier and retailer partnerships.
Griffith said the company is about to commission a new manufacturing plant in Melbourne, adding to their network of over 20 factories in the ANZ region. With each one having between 50 and 100 suppliers, managing the flow of documents is a constant challenge. But the new factory became a trigger for looking at better ways of doing things.
Dulux Group’s legacy process required three points of manual processing as documents were created, sent to suppliers and when products were received. While PDFs were typically moved around, the increasing scale and complexity of the business as the company has grown both organically and through acquisitions made this process repetitive and laborious, he said.
The manual recessing lead to errors, loss of documents and a lack of transparency as different entities involved in the supply chain were unable to know where documents were. Critically, the legacy process lacked a feedback loop that confirmed when documents were received.
Three years ago, the company invested in an EDI solution for moving documents between Dulux and a supplier. But the process for each connection was unique. That meant each supplier relationship required a separate project to create the EDI interfaces.
In those three years, just 14 of Dulux’s 500 suppliers were connected to the system, covering about a third of the business’ invoices. But each connection took about six months to create with one supplier saying it cost them about $50,000 to establish.
Despite that effort, two-thirds of the company’s invoices were still manually handled so it became clear that a different process was needed. This lead Dulux to look for a “full paperless” system, said Griffith. The establishment of the new factory became a trigger for exploring a new process.
Following a scan of the market, Griffith said SAP Ariba was identified as their best option for achieving a fully paperless factory.
“All the planets aligned,” said Griffith. “When the planets align you have to grab it”.
Unlike many IT projects, Griffith de-emphasised the potential cost savings of the project, with the focus placed on being at least cost neutral but delivering on a long-term vision.
The SAP Ariba system automates the entire process, including the generation of delivery barcodes for suppliers whose systems lack that capability. It also means suppliers can connect simply to SAP Ariba. And, using an SAP Ariba Light Account gives suppliers a cost-free option for connecting.
While it took Dulux three years to connect 14 suppliers to EDI, SAP Ariba has allowed them to connect over 60 suppliers in eight months. Some suppliers have maintained their EDI connection. Griffith said he expects to have every supplier using either SAP Ariba or EDI by the end of 2018 – getting the company to their vision of being completely paperless.
This has delivered lower error rates and the ability to track the effort taken to execute transactions. It has also allowed the Dulux Group to manage different types of invoices more effectively. For example, Fuel Excise invoices can be handled more easily than before.
It’s also allowed the company to get a better understanding of the full, end to end, procurement process from both their perspective and that of suppliers.
Anthony Caruana attended SAP Ariba Live as a guest of SAP Ariba.