OfficeMax New Zealand is a company that is near and dear to the hearts of Kiwis.
Since 2011, the business has donated over $1 million to helping 14,000+ socially and economically disadvantaged children, and since 2005 their Schools Rewards loyalty programme has contributed $6.72 million back to schools. On top of that, OfficeMax commits to purchasing 95% of its overall product from local suppliers.
OfficeMax’s 500 employees work from more than 19 locations covering distribution, retail, sales, and shared service activities.
Even superstars need support
OfficeMax uses Pronto Xi version 750.1 and every month processes over 10,000 invoices. Most purchases are for inventory to service their customer base. Stock is stored in one of their three warehouses, or direct shipped from the vendor to the customer.
Despite being constantly busy, it was never a problem for the finance team, says Jackie Underhill, long-time OfficeMax employee and Finance Shared Services Manager. “Fact of the matter is that my team are superstars.”
But that’s not to say she didn’t have a vision for the future.
“I wanted to automate for 12 years, but each time the project was approved for CAPEX, some other urgent project presented itself. We had the process under control, and so whilst there was great efficiency to be achieved, we weren’t considered a priority.”
“That is not to say that there weren’t challenges,” says Jackie.
“OfficeMax has a history of growing both by acquisition and category expansion. As we acquired, the pressure would increase on the team, and I was concerned about the workload. I was concerned that a loss of any one team member would have a considerable impact on the business, because we had such a high performing team.”
AP areas to address with automation
Jackie says she was interested in addressing several issues that she’d expect would be familiar ground for most AP departments.
“We were manually routing and processing invoices that either matched the PO - meaning the team added no value to the process - or had errors of which the team could not address. At least the Purchase Order based invoices we knew about. The invoices that didn’t have a PO were a nightmare. They were being sent directly to the person ordering the goods and could sit out in the field for an extended period. We often only knew they existed when the vendor would call to discuss a potential credit hold.”
Redmap to the rescue
To meet OfficeMax requirements, Redmap implemented their best practice for Pronto Xi as a base system.
Pronto Best Practice (PBP) allows OfficeMax to process both PO and non-PO invoices straight out of the box. Invoices are sent to an email address provided by Redmap for automated data extraction. The validated data determines if the invoice is posted directly to Pronto or sent to someone for their approval. Once posted, PBP generates a link to the source document so it can be easily downloaded if required.
Jackie is delighted with the process.
“It is amazing how much time the little things help. Take bank account checks, for example. Redmap extracts the bank account from the invoice and checks in Pronto Xi for a match. This is such a simple but impactful win. My team used to spend an inordinate amount of time checking that. Now, it’s an afterthought.”
Fixing the receipting process
OfficeMax has increased the number of products they move via direct ship. Orders are placed with the vendor who ships the goods directly to the customer, completely bypassing the OfficeMax warehouses. It’s an efficient process which minimises double handling, but it wasn’t with drawbacks.
“This [process] broke our receipting process,” says Jackie. “Our warehouse team is excellent, and receipting is rarely an issue. But when goods didn’t go through the warehouse, we had limited visibility of when they were delivered. It meant invoices were sitting in approval queues with no receipt to match them to and causing a lot of work to try and receipt them. So, I presented this issue to our Redmap BA and asked Redmap to come up with a solution.”
Redmap implemented their Receipting solution to solve the problem. The solution allows invoices associated with a PO, but not updated and received, to still be approved.
First, Redmap recognises the ‘direct ship’ orders based on a dedicated warehouse code associated with the PO. Generally, this PO will be in an ‘on-order’ status (although it could technically also be in a ‘back-ordered’ status). Redmap receives and updates the PO, and then, if the PO and invoice are a perfect match, posts the invoice, and updates its status to ‘complete’.
It’s a process that works perfectly, says Jackie.
“Our procurement team manage the catalogues and pricing very closely, and there’s a high degree of perfect matches in the direct ship side of the business. We applied a $0 tolerance rule to the direct ship invoice matching to satisfy internal concerns regarding the automatic matching and posting. Last month we processed over 6,000 direct ship invoices. Previously, every one of those would have been manually touched, so that the direct ship team could update the PO and press reprocess in Redmap. Now it all just happens.
“You can really tell Redmap take great pride in delivering excellent outcomes for their customers. I was so impressed with what they had architected for this solution. We literally gave them a problem to fix, and they came back with a solution that answered questions we hadn’t even asked because what they suggested was extraordinary to the end,” enthused Jackie.
LeeAnne Hau, OfficeMax Project Business Analyst, shared the same view.
“When urgent guidance and feedback was required, the team at Redmap were there step-by-step, helping us find the appropriate solution and processes we needed to retain and build our confidence levels. We experienced great work ethics from key members and learnt ways to improve various channels throughout our business that we hadn’t even thought of prior to commencing the project. Without a doubt, the Redmap AP Automation project brought many a smile to the various teams throughout the OfficeMax NZ team.”
Celebrating change for the better
“Redmap has completely transformed our business. It delivered the efficiency that we were looking for, which gave time back to my team. I have subsequently invested that time in investigating and addressing root causes rather than continuing to patch up the symptoms in our internal processes”, says Jackie.
And the timing couldn’t have been better. “We went live on Monday, and the NZ government implemented a very strict COVID lockdown on the Wednesday. We were considered a critical service given the amount of PPE we distributed over the pandemic, and so we could have sent our staff to the office, but we didn’t have to. I could not have done without Redmap.”
Without a doubt, the Redmap AP Automation project brought many a smile to the various teams throughout the OfficeMax NZ team.