The old saying “the job’s not finished until the paperwork’s done” began to impact appliance manufacturer Whirlpool, a multi-billion dollar manufacturer of retail and commercial appliances.
Company executives recognized the manufacturer had to upgrade its order-related business practices and set out to meet the challenge. Whirlpool “played to its core” and outsourced the back-office solution to reduce documentation process times and bring generous human-capital savings.
“Too often, companies have two work processes tackling the same business task–one at greater speed, trailed by a paper-bound process that slows everything down,” says Keith Kmetz, an analyst at IDC.
“We wanted to get out of the paper-shuffling business,” says Brian Murphy, Director of E-services for Whirlpool’s Global Information Systems Development Group in Benton Harbor, Michigan, who adds that his group had to function more efficiently to support both Whirlpool and the newly-acquired Maytag division.
Whirlpool converted to a multifaceted document automation enterprise that Murphy says lowers cost and saves time with the help of two companies: Esker Software’s remote hosted DeliveryWare management platform and Dolphin’s SAP integration expertise. The new process replaces outmoded paper-based management systems while maintaining quick and efficient access to historic information (including warranty).
Esker supplies document digitization and Dolphin houses the files. Now Whirlpool can create hard copies or share the computer files internally or externally. “It gives us a full set of options on how we manage and share documents for both product lines,” says Murphy.
Providers Streamline Whirlpool’s Document Management
Esker already had an eight-year relationship with Whirlpool. Its manufacturing and marketing’s US operations used Esker’s fax server software for outbound document management, which was generally efficient enough for what it did but still produced too much paper to manage, according to Murphy. Coupled with Esker’s relationship with IT document management provider Dolphin, he saw an exciting solution.
“We knew Esker, and Dolphin’s integration expertise also got high marks,” he says.
“Esker’s strength is providing a solution for document delivery by mapping business processes and reducing any pains the customer may have by streamlining and simplifying those processes,” says Michael Krust, Vice President of Sales at Dolphin. “Together, we combine the best of both worlds.”
Murphy notes this streamlined process is much more efficient, less labor intensive, and more responsive to his needs.
Before outsourcing the process, Whirlpool struggled with having to do a lot of manual order-entry. According to Murphy, the manufacturer suffered all the problems associated with paper and labor-intensive manual processes such as long order process times and the potential for misplaced or lost paperwork. “The goal is to get the automated document processes down to hours, then minutes, which lowers payroll due to less human oversight,” he explains. “So far, this solution is meeting all of those objectives.”
The project involved Esker configuring a three-tiered architecture and developing the connective software that would digitize and replace paper-based tasks for electronic communication along Whirlpool’s supply and marketing chains, as well as its warranty division. Dolphin then streamlined the process through its SAP suite so that the information could be accessible via remote access.
When an order comes in, DeliveryWare scans the image to make it text, looks up whom the order needs to go to, and provides notification, at which point a Whirlpool employee can open the order in a remote Web-based client. Then the electronic data is pushed into SAP transactions to process work items and create a sales order.
“But our order-entry workers retain the ability to do manual exceptions-handling, such as dealing with price discrepancies,” adds Murphy
Multiple Benefits to Outsourcing Documentation
Murphy notes that since implementation, receipt-to-order entry time has been reduced from almost four days to one, a 75 percent reduction in process time. He says other benefits include the elimination of paper and the ability to reduce time during the data-entry process. The system also significantly reduces errors and redundancies, producing an approximate five percent reduction in document management staff for phase one alone.
The next architectural phase of the project addresses material price variants and the ability to automatically handle exceptions and posting.
The engagement is lowering Whirlpool’s total infrastructure costs and eliminates internal maintenance and service by providing long-term archiving of high-volume information with minimal impact on Whirlpool’s entire database, according to Murphy.
The final piece of the service surrounds development of a “proof of delivery” (POD) process. Outbound invoices print to the DeliveryWare application, find the original order, the bill of lading, and merge all documentation with the invoice. Then the program sends the package to the customer.
“The most important benefit we realize is being able to add value by efficiently dealing with customer issues, faster document delivery, and ensuring customer loyalty,” says Murphy.
At the first anniversary of the engagement, all three phases are now incorporated. Whirlpool is beginning to see quantifiable savings in document management for both appliance divisions. Executives feel a cumulative 10-12 percent reduction in management costs is reasonable without factoring in possible staff reductions, a decision that has yet to be made. “But it could be slightly more,” says Murphy.
But one thing is certain, he adds. “By continuing the old ‘paper-based’ way in both divisions, our costs would have continued to rise. We would have also been much less efficient or responsive.”
Lessons From The Outsourcing Journal:
- Manufacturers that outsource document capture and creation functions realize quick efficiencies through more streamlined processes and fewer mistakes.
- Multiple benefits include faster document turnaround, less human capital expenditure and easier communication within a manufacturer’s marketing and warranty fulfillment pipeline.
- By outsourcing the documentation function in its manufacturing division, Whirlpool can concentrate on its core business and eliminate the archiving and managing of paper documents.