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How Sealed Air Became an Innovator in the P2P Space
How Sealed Air Became an Innovator in the P2P Space
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Introductions
MARY HELMS
Global Process Partner P2P Sealed Air
JOE HYLAND
Chief Marketing Officer Taulia
1 3 2
INTRODUCTION MARKET CHALLENGES
SEALED AIR: CASE STUDY
4
KEY TAKEAWAYS
5
Q & A
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Agenda
There’s a Fundamential Inefficiency in the Financial Supply Chain Buyers Have Excess Cash
U.S. Non-‐Financial Companies’ Cash & Liquid Assets
Low Return on Cash U.S. Interest Rate – 10-‐Year Treasury Rate
($ in tn)
0%
2%
4%
6%
8%
10%
1990 1995 2000 2005 2010 $0.0
$0.5
$1.0
$1.5
$2.0
1990 1995 2000 2005 2010
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Current Landscape Challenges
33% 1 to 30 DAYS
6% 0 DAYS
50% 31 to 60 DAYS
11% 61 + DAYS
*American Express Small Business Monitor. Polled 500 Canadian Business Owners. September 2012
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Average Time Suppliers Are Waiting For Payment
Suppliers Face a Financing Gap and Predatory Costs of Capital
Traditional Supplier Finance Only Serves the
Largest Suppliers
Banks Continue to Enforce Strict Lending
Requirements
“Long-tail” Suppliers Limited to Factoring, P-
cards and Other Expensive Forms of Finance
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Suppliers Have Limited Access to Financing
SUPPLIER Invoices Customer
BUYER Approves Invoice
on Day 5
BANK
Invoice-Net 60
Buyer Earns 0.75% APR until
Due Date
Suppliers Borrow at 20+%
APR
1.
2.
3.
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Banks Benefit From Inefficiency
No visibility into the invoice process
Unnecessary invoice status and inquiry
calls
Missed early payment discount
opportuni8es
AP Depts. drowning in
paper
High cost of manually processing invoices
How Sealed Air Became an Innovator in the P2P Space
Common Challenges within Payables Process
What if… You can address your suppliers’ needs for early payment?
What if… You keep all the returns that would of normally gone to the bank?
What if… Suppliers could check the status of their invoices online 24/7?
Suppliers could incentivize early payments?
What if…
What if… There is a way for you to pay your suppliers less and have them thank you?
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Solving the What If Game
Enables Buyers to improve return on cash by paying suppliers early with no additional investment risk
Enables Suppliers to access less expensive financing alternatives by accepting time-variable Dynamic Discounts
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
The Win-Win Situation That Generates Revenue
Products PorAolio of widely recognized brands, including Cryovac® brand food packaging solu8ons, Bubble Wrap® brand cushioning and Diversey™ cleaning and hygiene solu8ons
Revenue: $7.7B in 2013
Employees: 25,000 employees
About In 1960, Marc Chavannes and Al Fielding invented a revolu8onary new wall paper, which would become the Bubble Wrap we love today
Headquarters Elmwood Park, New Jersey
OperaOons Serves Customers in 175 Countries
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
About Sealed Air
Invoices not geXng approved quickly because POA and ASN not available in a 8mely manner
No internal visibility and an improved invoice cycle
No workflow – takes weeks to approve invoices (most of which were paper)
Abundance of Service Entry Sheets Suppliers call into AP Department for invoice and payment status inquiries
Receiving thousands of paper and PDF invoices per month
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Challenges Prior to Choosing a Solution
Offer early payment on all approved invoices
Grouping of suppliers
Buyer initiated and
Supplier initiated options
Supplier Finance
Full spectrum electronic invoicing that eliminates paper
from the supply chain
Multiple methods of receipt: PO Flip (eFlip), Web Form
(eForm), Data Upload (eUpload), EDI
Compliant in 40+ countries
Workflow routing
ASN
eInvoicing
Allows suppliers to be self-sufficient
Invoice status and obtain
Rich Remittance ™ for 100% of invoices
Online dispute and
messaging capabilities
PO delivery and confirmation
Supplier Self-Services
Suppliers to enter and maintain their own address,
banking and contact information
TIN matching and validation
Onboard new suppliers
Manage certifications and
attachments
SIM
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Why Taulia?
We needed a global, cloud-based
solution that would grow with
our service, and we knew that
was Taulia.
“
”
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
A True Partnership
02 03 01 Globally compliant solution to eliminate paper invoices and manual data entry increasing AP efficiency, without supplier fees
Incentivize suppliers to enroll and engage in portal, give them access to see the status of invoices and payments, 24/7
INCREASE eINVOICING ELIMINATE INQUIRIES Distribute POs, display POs, receive PO acknowledgements and confirmations and allow suppliers to create invoices from POs
HANDLE PO INVOICES
05 06 04 Dispute messaging to interact and communicate with suppliers more efficiently and directly from any document and ability to control mass communication to suppliers
Offer early payment on all invoices in exchange for a discount. Utilize buyer imitated tools (DPT) and supplier initiated tool (DD) to ensure maximize effectiveness
MESSAGE CENTER SUPPLIER FINANCING
Real-time communication between ERP system and the SaaS platform to gain visibility into payables process and streamline electronic communication
CONNECT ERP TO CLOUD
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Project Goals
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
A Solution that Adds Value for All Departments
o Eliminate incoming paper invoices and calls into payables department o Streamline processes, focus on more strategic ini8a8ves
Accounts Payable
o Strengthen supplier rela8onships by offering them a free portal that’s easy to use and offers value
Procurement C R O S S
D E P A R T M E N T A L
P A R T I C I P A T I O N
A N D
A L I G N M E N T T O
E N S U R E
S U C C E S S
o Add millions to the boaom line through risk-‐free investment in supply chain o Strengthen global financial supply chain
Treasury
o Cer8fied add-‐on that resides within ERP system o POD is updated almost real-‐8me with only required fields without overwhelming IS
system resources o Minimal change management (ERP look and feel)
IT
Live since February 2013
609 Suppliers Invited 460 Suppliers Enrolled
76% enrollment rate
7.9% of Spend offered for early payment is
accelerated
34% from Buyer Initiated 66% from Supplier Initiated
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Results: Sneak Peak
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Portal Engagement and Invoicing Activity
Of suppliers invited actively use the portal
The move towards 100%
electronic invoicing
eFlip / eForm 96%
eUpload 2%
API 2%
PO delivery through the portal (the suppliers have to come to the portal to get their purchase orders)
Ensure real-time communication between ERP and portal to maximize trust and convenience of portal
Education campaigns for supplier visibility and self-services, supplier information management, dispute resolution, early payment discounting
Develop and enforce a portal use policy
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Tips and Tricks for Maximizing Enrollment
Develop and Enforce a Portal Use Policy Portal policy to be used as “Go-To Guide” on best practices for suppliers using the portal and how to achieve maximum bene!t. Enforce the use of the portal for:
“To improve communication with our suppliers and provide them with increased transparency into our invoice approval
and payment process, we are requiring our suppliers to enroll in and interact with us through our free supplier portal.”
Electronic Submission of all Invoices
Inquiries About PO’s
Updates to Vendor Master Information
Payment Status and Early Payment Request
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Portal Policy
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Operational Efficiency Gains
Decreased calls into AP because suppliers have visibility into payment and invoice status
Achieved real time communication
between SAP and P2P Platform
Visibility into supply
chain
Complete invoice
transparency and audit
trails
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Multiple Flavors of Early Payment Discounting
Dynamic Payment Terms • Buyer initiated discounts – as soon as invoices are approved,
Sealed Air pays them at a rate that was determined at contract negotiation and takes a discount equal to the days paid early
• Previously networked suppliers migrated to Taulia with Dynamic Payment Terms that mirrored the previously negotiated contract terms
Dynamic Discounting • Supplier initiated discounts – all invoices are available for early
payment. Suppliers choose to accelerate them in exchange for a discount – they can do this on a per invoice basis, or automatically accelerate all invoices (CashFlow)
• Determine discounting segmentation that ensures greatest participation in program (biggest suppliers will get lowest rates, smallest suppliers will get higher rates – always competitive)
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Supplier Financing for the Entire Supply Chain
Invoices offered for early payment are accelerated
7.9% 4 different currencies:
CAD, USD, GBP, NZD
$-‐
$50,000.00
$100,000.00
$150,000.00
$200,000.00
$250,000.00
$300,000.00
Feb-‐13
Mar-‐13
Apr-‐13
May-‐13
Jun-‐13
Jul-‐1
3 Au
g-‐13
Sep-‐13
Oct-‐13
Nov-‐13
Dec-‐13
Jan-‐14
Feb-‐14
Mar-‐14
Apr-‐14
Cumula8ve EP Discounts
Cumula8ve DPT Discounts
$149K
$290K Currently, $151M is offered for early payment (EP)
If $1B of spend was offered for early payment, an estimated $1.9M would be captured in discounts.
Easy and Low Cost for Suppliers to Implement, Use and Maintain • Minimal or No Technical Expertise Needed • Intuitive Interface • Completely, 100% Free
Provides Real Value to Suppliers • Online Visibility to Invoices and Payments • Accepted Invoices Always Received and Posted to Buyer’s AP • Ability to Initiate Early Payments • Ability to Streamline the Invoicing Process • Ability to Automate Order Entry Process
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
A P2P Platform that Strengthens Supplier Relationships
Supplier Financing Train and educate suppliers on
bene"ts of dynamic discounting
Dispute Messaging Eliminate supplier inquiry calls, receive all inquiries via message
board
Continue to Enforce Policy Enforce portal policy for all suppliers to mandate usage of electronic invoicing
and the portal
All American and European suppliers enrolled and actively using the portal Suppliers in 3 countries, adding 2 more in next 2 months Avoid supplier fees to maximize adoption
GLOBAL SOLUTION Enforce portal use policy to streamline and automate processes Non-PO and PO ReadSoft work#ow
ELIMINATE PAPER
NEXT STEPS:
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Key Takeaways and Next Steps
H o w S e a l e d A i r B e c a m e a n I n n o v a t o r i n t h e P 2 P S p a c e
Questions
MARY HELMS
Global Process Partner P2P Sealed Air
JOE HYLAND
Chief Marketing Officer Taulia
