How Greif Smoothed the Introduction
of e-Invoicing

By Barbara Myers

As a user of electronic invoicing for the past 18 months, Greif has seen a tremendous improvement in our ability to streamline the accounts payable process. In addition to the role of our e-Invoicing provider – we use the OB10 network – a large share of the credit for our success goes to the careful cross-functional planning that was done before our implementation in late 2006.

At the time, our intent was to translate Greif’s lean manufacturing concept into a performance excellence model. We were determined to eliminate the non-value-added activities that go into processing an invoice. This was on top of a significantly improved invoice workflow process that we had earlier instituted, which itself had a huge impact on improving processing time and costs.

We realized that to achieve our goals, we needed a way to get invoices into our system quickly and accurately, using a minimum of staff hours. We were finding it could take up to 15 days, including time spent in the mail, for an invoice to be properly entered into our system and prepared for processing. If we could remove nearly two weeks from the process, we knew we could look at value-added payment models on the back end, such as early payment discounts from suppliers.

We also sought a solution that would enhance our relationships with suppliers. As the AP organization, we didn’t want to be just a payment group. Instead, we wanted to be able to add value to our relationships by using a solution that would benefit both suppliers and Greif.

As we looked into solutions for electronic processing, we created a team with representatives from Finance, Supply Chain, IT, and AP. This assured that our eventual implementation would have the awareness and support of all of the relevant departments. We also conferred openly with our largest suppliers, to let them know our intended direction. Happily, they were very open to changing the invoicing method, understanding that this is where the industry is headed.

The cross-functional team was intended to educate everyone concerned, not to sell them on our solution. The Supply Chain organization, for instance, was neutral to the idea initially, but as they recognized the potential benefits, they became great supporters of our move to e-Invoicing.

When it came to the actual implementation phase, our approach was a mix of education and mandate. We contacted each of our initial group of suppliers to be enrolled and explained to them why we were making this change. We pointed out the benefits of e-Invoicing and the fact that once they are on the OB10 network, they can do e-Invoicing with other customers as well.

While we did make it clear that this was a requirement for doing business with Greif, we still looked at suppliers on a case-by-case basis. We couldn’t let our e-Invoicing mandate harm our production. Interestingly, as word got around that we were making this change, we actually had suppliers clamoring to implement e-Invoicing before we were ready to enroll them, simply because they understood the importance of this strategy to us.

Supplier Progress

In the year and a half since we began using the OB10 e-Invoicing network, we have made great strides in converting suppliers and eliminating more and more paper from our process. Our goal is to be at 100 percent eventually, but we realize that there will always be a few stray invoices we just won’t be able to get electronically.

The benefits of e-Invoicing has made a great difference to the Greif AP organization. We have freed up staff time in the department and been able to become more service-oriented. The overall cost of processing an invoice has fallen, and data keying errors are virtually eliminated due to electronic reception of the invoice from the supplier. We have vastly reduced calls from suppliers regarding whether their invoice was received, since they get electronic confirmation within minutes of submitting it.

Payments to suppliers are far more accurate, and our ability to take advantage of prompt payment discounts has been enhanced. AP clearly has become a more strategic partner in the supply chain team.