RADIX Case Studies
Praxair - Accounts Payable
Praxair Inc. (NYSE:PX) was originally founded in 1907 as the first company in North America to commercialize cryogenically-separated oxygen. Praxair is a global, Fortune 300 company that supplies atmospheric, process and specialty gases, high-performance coatings, and related services and technologies. Sales in 2007 were $9.4 billion.
With 28,000 employees and operations in more than 30 countries, Praxair is focused on helping its customers become more profitable, efficient and environmentally friendly. The company holds almost 3,000 patents and serves a wide range of industries: food and beverages, healthcare, semiconductors, chemicals, refining, primary metals and metal fabrication, as well as other areas of general industry.
Praxair is committed to finding innovative ways to help its customers grow and its shareholders prosper. Key to the success of these efforts is Six Sigma. Launched 10 years ago, the Six Sigma methodology has become the way Praxair does business.
In September 2005 Praxair began a Document Management Project in Accounts Payable (AP) for a Praxair subsidiary. Primary goals of the project were to reduce the time spent manually handling paper, answering customer service questions and finding documents for internal departments.
Brenda Heston, Manager of Strategic Projects explains, "Six Sigma provides the structure to insure that changes are made for the right reasons, not by gut feel. We don’t want changes for change’s sake. Six Sigma tools help to identify what should be addressed first and how to measure the improvements made."
Imagetek proposed their hosted service RADIX as a solution. The costs were competitive and required almost no internal IT resources to implement, since it is hosted on servers that are remote and secure.
Heston explains the choice of Imagetek. "Every step of the way, Imagetek offered solutions to our issues or concerns. Imagetek made great suggestions on how to best utilize their services and RADIX. Other companies would say, ‘Tell us what you want and we will do it.’ Imagetek would say, ‘You could do that, but have you considered this or that?’ In many cases, based on their expertise, we chose to implement their suggestions."
The new process allows the staff at Praxair to focus on paying the invoices. Imagetek staff receives the mail from the Praxair P.O. boxes each day, opens the envelopes, scans and uploads the invoices into RADIX by 9 a.m. Praxair checks its electronic queues in RADIX and performs data entry. Any exceptions are noted and are routed for processing by the assigned individuals.
RADIX has a specialized Accounts Payable interface that retrieves the unprocessed invoices and displays them on the monitor or a second monitor on the user’s desk. The data is entered by the operator into the Accounting software and automatically indexed. Exceptions are routed to the appropriate queues and a utility requires the AP clerk to key the amount of the invoice in reverse to ensure accuracy and provides batch balancing and totals.
The net result is that the labor required to pay invoices is down 10% in the first year, more than paying for the RADIX service.
Heston outlines the success of the project, "The documents are accessible to the people who need them, when they need them, speeding up the financial review process. The best part is people hearing from others in the company that they love it. They have started to work on exceptions items without AP sending an e-mail or request for assistance to resolve an issue. This part of the process is in the early stages, but I am sure it will result in significant savings for Accounts Payable as well as locations in the field."