With 167 stores Australia-wide and more than 40,000 products available on its website, Officeworks is Australia’s largest supplier of home and office products.
One can only imagine how active the transport and logistics segment of the business
has become, particularly with more people ordering online and now working from
home more often.
But an active requirement for transport brings with it an exponential increase in the
number of supplier contracts and invoices from transport companies, which can be
overwhelming if the terms and transactions can’t be easily recorded and analysed.
Millions of deliveries could lead to error snowballs
“About 10 years ago, we were doing something in the order of 800,000 customer deliveries per annum,” said Steve Leitch, National Transport Manager, Officeworks. “In the past decade, that’s increased to a level of around six million deliveries annually.”
That’s not even factoring in-store replenishment, which can be between 50,000 to 60,000 deliveries annually. “The whole scale of our operations has changed,” he
With that increase in scale comes an in-kind rise in the sheer number of invoices from transport suppliers, and with it the possibility of financial errors taking place – often in the form of incorrect invoices and overcharging or certain contractual agreements being missed.
“Our business expects us to be responsive when they have a query, and we really need the ability to quickly access accurate information,” said Leitch. “Sometimes we’ll need to supply quite large data sets, or sometimes we need to be granular and more specific to be able to
give the business visibility. It’s understandable, as there is a significant transport cost to the business, so they need confidence that it’s been managed appropriately. They need absolute confidence that we don’t have big gaps in our knowledge or in what our carriers are charging.”
“I think people undersell how long it takes to do invoices at this kind of scale,” said Peter Lowder, Operations Transport Manager, Officeworks. “When we’re talking something that has a lot of data associated with it, and sometimes featuring 300,000 different consignments in one batch, it just drains the time you have to do your actual job. You need a single person dedicated to that role just to get that job done.”
“The accruals process is important too,” added Leitch. “We need to be able to accrue accurately, based on recent transactions, carrier-by-carrier and month-to-month, even when they haven’t provided invoices. And when we get them, some invoices can be millions of dollars at a time. So having the ability to say, we’re going to accrue $800,000, this month with a high degree of confidence is critical for our operations.”
It’s clear that with any business at this scale, there are a number of points in which errors can creep in. Take the invoices with 300,000 different consignments – a few cents off for a random invoice is one thing, but if it’s wrong on hundreds of thousands of consignments, the financial loss can snowball from a few cents to thousands of dollars.
Furthermore, with that level of engagement with suppliers comes a level of contract management that could potentially be overwhelming. “If a supplier comes to me and questions a payment we’ve made, I’d have to manually search for that contract and highlight the terms of the deal or correct the error,” said Leitch. “That could take hours, even days if we didn’t have a system in place”. Thankfully, Officeworks has had a system in place, and as a result, hasn’t had to worry about any of these issues in the ramp-up it’s seen over the past decade.
Streamlining compliance with a single source of truth
Officeworks has worked with Profectus Group, the leading technology-driven services provider of compliance and recovery solutions, since 2008.
The retailer uses Profectus’ capabilities for everything from its Rebate Deal Management solution to its Audit solutions and Compliance Technologies across the company.
For the transport team, it relies on Profectus to act as its one-stop shop to streamline its invoice management and ensure contract compliance and granular reporting capabilities.
Profectus ensures that all contracts and invoices are accurately recorded and can be easily searched for and granular line item data analysed at a moment’s notice. For a company the size of Officeworks, with a huge transport and logistics reliance, the system has proven to be a boon for the Transport team which is required to report quickly and accurately to the rest of the business.
“The analytics that I can receive now is astronomical compared to what it would normally take without the help of Profectus,” said Lowder. “If we had to rely on our own systems to extract the data, it could take weeks. Now, I can extract it within five minutes.
“A report that would have taken me internally about five weeks to pull together if I had to go through our own systems, I got done in 15 minutes.”
Prior to Profectus, the team took on a manual process to check invoices at random. When there was an overcharge identified, the team would then have to physically call up each supplier and try to resolve the query. The entire process was laborious, lengthy and time-consuming. An additional advantage with Profectus is that it automatically undertakes accruals based on the spend and the invoices in place within the system. This ensures Officeworks accrues correctly and in a timely manner, especially at month end, as Profectus’ contract compliance system is the single source of truth for their supply chain team’s entire spend. Furthermore, the system automatically highlights discrepancies in contracts versus invoices, enabling Officeworks to accurately claim from suppliers what they’re owed if they’ve been overcharged.
“I review every invoice, and I go through and approve them. But if Profectus finds any discrepancies, I can go in and review them, export them into Excel and send them off to the people that need to review them from my end,” said Lowder. “The fact that we’ve got all our management of our contracts, rates, invoicing in one place means we’re not having to do separate checks and balances through different ways to ensure the information is correct.
“It’s really seamless and easy.”
Profectus is also responsible for chasing the suppliers for claims, says Lowder, freeing up significant time in his day.
“The fact that Profectus is chasing the carriers and dealing with them directly takes a massive burden off my shoulders,” said Lowder. “It gives me the opportunity to actually do what I’m paid to do, which is manage our transport requirements.”
Profectus makes a habit out of being available, with a personalised level of service that its clients have come to rely on.
“I don’t know how many times I’ve called Profectus on a Friday afternoon, and our contact there has always answered the phone,” said Leitch. “That sounds like something simple, but I’ve dealt with other suppliers in the past when it's Friday afternoon and I can’t get anyone. The fact is that Profectus is there, it’s reliable, it's consistent, even down to the team that actually does the processing. No request is ever too much.
“Everyone has this experience, in which you have calls scheduled and you’d rather do anything else, but with Profectus that’s not the case. I always enjoy our scheduled fortnightly calls because the team is fun, and I know that they’re helping me every time.”
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