Simplifying Global Purchasing, Inbound Visibility, and E-invoicing Compliance with Descartes EZ Collaboration     

The pace of change in today’s worldwide healthcare environment is rapid, and the mandate to provide better outcomes for people has never been greater. For global medical imaging and IT solutions provider Carestream Health, using Descartes EZ Collaboration to simplify its complex purchase-to-pay and inbound logistics processes and to fully automate e-invoicing compliance is helping the company deliver flexible, global collaboration solution to reduce operating costs and lead times, increase inbound visibility and receiving efficiency.

The Challenge: Modernize Manual Purchasing and Meet E-invoicing Mandates

Managing the purchasing lifecycle can be challenging, especially for a company with offices in 170 countries, 1,500+ vendors around the world and a diverse customer base ranging from small medical clinics and single hospitals to large networks and even entire countries. With Carestream’s manual practices for purchase order (PO) creation to acknowledgment, changes, receipt, invoicing and payment, the labor involved and the potential for errors was substantial. To further exacerbate matters, there was no standard approach to the purchasing discipline across locations and no enterprise-wide visibility into purchasing activities and workflows. Additionally, Carestream wanted to reduce the risk of non-compliance with global e-invoicing mandates, particularly in Europe, by fully automating the invoicing process while adhering to applicable privacy legislation with full inbound visibility.

The Solution: Using Descartes EZ Collaboration

Carestream deployed the cloud-based Descartes EZ Collaboration solution to automate order management throughout the buying process with suppliers of all sizes, and at every level of technical sophistication. The Descartes solution centralizes supply chain data and directly populates Carestream’s SAP enterprise resource planning (ERP) system for POs, acknowledgments, advance shipment notifications (ASN) and invoices.

The Descartes solution provides cost validation against POs to ensure accuracy and reduce errors, eliminating Carestream’s previous challenges with matching POs and invoices. By automating ~38,000 invoices per year, the company has realized annual savings of ~US$400,000. And, with dramatically fewer blocked invoices, Carestream has recovered ~20,000 hours of productive time annually, totaling over $600,000 in total annualized savings. 

The solution also allowed the company to create a common labeling system for suppliers. The ability for vendors to produce labels for inbound shipments from a central platform accelerates the receiving process. Carestream now enters goods receipts automatically by reading barcodes that include a lot number, which is important for raw material buyers. Vendors can also generate labels for shipments that combine PO’s.  In addition, for blanket POs, Descartes EZ Collaboration helps Carestream replenish product when it is required. With the ability to rapidly call-off stock, the company minimized excess inventory and reduced the amount of administration required to process multiple PO’s.

To date, Carestream has connected almost 1,500 vendors worldwide to the solution using either web-based connectivity or EDI, including tight integration with European and Chinese suppliers. With enhanced supply chain collaboration, visibility, and process automation, Carestream has removed lower value tasks and communication from its supplier and customer interactions in favor of much more rapid, cost-effective and error-free transaction management. The solution also allows Carestream to customize business rules. For example, goods can be received before invoice receipt. This means that inventory is rapidly made available to fulfill customer orders instead of waiting on administrative processes. 

The Descartes solution also provided Carestream with a platform to meet compliance obligations in the European Union by transmitting electronic invoices to suppliers. Since replacing manual, paper-based invoicing practices, e-invoicing has spurred many additional benefits for the company, such as driving significant cost-savings, accelerating the order to cash cycle, improving the analysis of buying practices, increasing the efficiency and accuracy of AP processing, and enhancing visibility from the minute an e-invoice is generated until payment is received.

The Results 

1.  Reduced Costs: By improving the efficiency of the purchase-to-pay cycle with the Descartes solution, and integrating it with the company’s SAP enterprise resource planning (ERP) system, Carestream automated ~38,000 invoices per year for a savings of ~US$400,000.

2. Improved Supply Chain Visibility: The Descartes solution speeds up the order to cash process, which reduces outstanding debt and releases working capital for reinvestment. Carestream now has 100% acknowledgment on POs and PO changes and has improved production planning using ASNs from vendors.

3.  Accelerated Receiving Process: By providing vendors with the ability to generate a common barcode label on all inbound shipments, the Descartes solution has helped Carestream to create a faster and more accurate receipt process.

4. Fully Automated E-invoicing & Compliance: With the integrated, on-demand TrustWeaver service that monitors changing e-invoicing requirements in more than 60 countries, the Descartes solution helps Carestream automatically sign and validate invoice documents from its European customers.