The Company

DT Group is the largest retailer and distributor of building materials in the Nordic region. The Group has more than 8,000 employees; consolidated turnover in the financial year ended 31 January 2005 was DKK 16 billion.

DT Group serves its customers through a finely meshed network of stores in Sweden, Norway, Finland and Denmark. Its customer base is broad, ranging from major Nordic contractors, builders and consumers to distributors and industry.

The activities are organised in three main fields. The largest two are builders' merchants and DIY stores, organised in the chains Beijer Byggmaterial in Sweden, Neumann Bygg in Norway, Silvan in Denmark and Sweden, Stark in Denmark, Starkki in Finland, and Cheapy in Sweden.

Read more about the DT Group: www.dtgroup.com

The application

The challenge

The Stark Division in the Danske Traelast Group receives around 500,000 EDI invoices per year. Even this impressive number is surpassed by the 800,000 incoming paper invoices during the same period. Project manager Mads Hvelplund at Stark also points out that the 500,000 EDI invoices only come from 125 different suppliers while the 800,000 paper invoices are received from more than 4,000 different suppliers.

He did a bit of calculation and reached the conclusion that with the current EDI spreading rate it would take around 100 years before all of Danske Traelast’s suppliers would be EDI set. ”So we wanted to see if we could reach the same level of efficiency through intelligent electronic management of the paper invoices as the EDI invoices provides”, Mads Hvelplund explains. A goal which was supported by an investment in a MultiArchive based scanning and interpretation solution.

The solution

The focus on efficiency is reflected in the advanced environment built by Stark. The company has chosen to split the validation of the scanned data into two processes – in the words of Mads Hvelplund it is a matter of a “dumb” and “intelligent” validation. He explains: “The first – 'dumb' – validation we use to ensure that we find six areas with standard information, i.e. purchase order number, invoice number, invoice date, total amount, VAT amount, and the supplier’s phone number.

This results in a recognition rate of 70 – 80 percent. The standard information which the interpretation does not find is subsequently typed in manually.”

When the first validation is complete and missing information has been typed in, the second phase begins – the “intelligent” validation where the solution’s integration to the business application ASPECT4 and the possibility to design specific workflows really show their worth.

“In the 'intelligent' validation we draw on data in ASPECT4 and by means of own set up of rules, we check if e.g. an interpreted invoice number and the  relevant supplier are accurately connected. On the whole, the “intelligent” validation and the ASPECT4 integration reflect the fact that we strive to use the resources – both human and system-wise – in the most efficient and practical way.”

Another example of Stark approach to not putting unnecessary strain on the employees can be found in the structured workflow which has been defined for receipt of goods and approval of the relating requisitions and invoices.

“It can very well happen that there is a mismatch between our requisition and the delivered goods without necessarily resulting in an actual error,” points out Mads  Hvelplund. “If the goods reception department find that 9 pallets of any given goods have been delivered and our order was for 10 pallets, it is registered all the same. And when the invoice comes in it is checked that it is for 9 pallets only. If this is the case, it is approved – even if there is still a  mismatch between the original requisition and the final invoice. We are not wasting people’s time in the goods reception, finance, or stocks departments when the system itself is intelligent enough to match the right numbers.”

In connection with the workflow for invoice approval, there is actually added various thresholds. If an invoice has not been registered with goods received, the status “Await receipt of goods” is applied for some days before the status is changed to “No goods received” and not until this point the flow sends an electronic message to the relevant persons. For further optimization, Stark makes a robot remove messages from all electronic work baskets if the relevant voucher is approved by the goods reception department after it has been sent by the workflow.

It is not only polite not to waste people’s time if the case meanwhile has been solved by the electronics but it is also financially rational when 2,500 employees are connected to the system.

The benefits

“We have reached our goal to be able to handle EDI invoices and scanned invoices with equal electronic efficiency,” Mads Hvelplund emphasizes. “We do not burden people with approval tasks before it is necessary and through the general, centralized invoice management we use the resouces to a much improved degree. And as a not unpleasant bonus, we now save more than 66,000 Euros a year on postage only because we no longer have to send physical vouchers back and forth between the head office and the 80 stores.”

Additional information

This small videoclip shows how the process is working at Stark. The texts in the movie are in Danish. Download movie.

Contact

Mads Hvelplund, Stark - mh@(if you can see this please update your browser)ddtdetail.dk

Kim Rudbeck, Multi-Support Denmark A/S - rudbeck@(if you can see this please update your browser)multi-support.dk