Optimizing the Procure-to-Pay Process

GXS Active Orders automates the procure-to pay-process between companies and their global supplier community. Active Orders makes it easy to quickly and collaboratively answer questions such as: “Was my order accepted?”, “Which version of the order are you shipping against?”, “Will the order ship on time?” and “What is the status of my invoice?” Buying organizations can cost effectively gain a powerful unified view into data from their various ERP instances and securely extend this view to their supplier community.

Active Orders is an on-demand SaaS application. Its three configurable modules: Order Planning and Execution, Shipping and Receiving, and Invoice Automation empower buyers and sellers with actionable visibility into their extended supply chains.

GXS ActiveSM Orders

www.gxs.com

Businesses using gXs Active Orders hAve reAlized significAnt Benefits including:

•Upto25%Improvementinpurchaseorderissuancebyautomatingtheprocessoftransmittingtosuppliersandtrackingtheacknowledgement

•Advancedshipmentnoticesandbarcodelabelsreduceinboundwarehousereceivingtimebyupto75%

•SafetyStockoptimizationbyupto15%throughbettervisibilitytoinboundshipments

•Upto80%errorreductionthroughautoidentificationtechnologysuchasweb-basedbarcodelabeling

•Automated3-waydocumentmatchingenablesacceleratedinvoiceapprovaltherebycreat-ingtheopportunitytonegotiateearlypaymentdiscounts

suppliers

event signalevent signal

Buyers

OrderAcceptance

Orders

Proof ofdelivery

remittanceAdvice

ship notice

invoice

Active Orders Process

Visi

bility

Supplier Management

Event Monitoring B

2B Scoreca

rds

Order Planning and execution

Efficiency in order planning and execution is a key performance driver in the procure-to-pay process. Despite the significant adoption of EDI and XML by larger companies, many small and midsize businesses continue to rely on faxes, e-mail and phone calls for PO receipt and acknowledgement.

Active Orders provides a dashboard that offers visibility to the progression of purchase or-ders through each step in the lifecycle. Through the order planning and execution module: • PO tracking and history—Active Orders provides a real-time view into purchase

orders and the associated order changes. All POs generated by the buyer’s ERP application and communicated to suppliers via EDI, XML or a web interface.

• Order Acknowledgement and changes—Upon reviewing the details of the order suppliers can accept, reject or propose changes to the order through comprehen-sive Order Acknowledgment capabilities. Buyers can configure Active Orders to acknowledge the entire order or just individual line items. With order acknowledge-ments, suppliers can provide detailed ship schedule commitments.

• Purchase Order changes—Active Orders also provides the ability for suppliers to propose order changes at the line item level. By tracking PO changes electronically, buyers and suppliers can reduce the significantly reduce the frequency of exceptions in the order fulfillment process.

• e-Mail notification—Suppliers have the option to receive automated email alerts when a new or changed order arrives. Notifications can be sent to end-users respon-sible for order fulfillment, customer service and sales functions. Auto notification enables users to identify changes to order contents, quantities and delivery dates that might be unachievable by the supplier.

The benefits of automated order planning and execution can be substantial. Businesses using Active Orders have been able to improve buyer and supplier productivity by up to 25% through the removal of paper from communications and minimizing the use of costly and error-prone manual interactions. Automation frees up time for more strategic activities such as negotiating price and terms, undertaking spend analysis, and optimizing supplier selection.

2 • GXS ActiveSM Orders

BUYEROrder Acknowledgement

Purchase Order

SUPPLIER

shipping and receiving

The Shipping and Receiving module can significantly improve supply chain efficiency by automating warehouse receiving and digitizing documentation flows. Common shipping and receiving challenges include: • Poorvisibilitytoinboundmaterials,shipments,andin-transitinventory. • Incompleteandinaccurateshipmentinformationduetopoordataquality. • Difficultyinplanningwarehouseordistributioncenterlaborschedulesduetolack

of data on inbound shipments. • Inabilitytoinstitutecrossdockingwithoutvisibilitytoinboundmaterialsandshipments.

Active Orders simplifies the shipping and receiving processes for both buyers and suppliers.

• Asn creation—Suppliers can generate advanced shipment documents specifying the contents, arrival date and transportation carrier for an upcoming shipment. ASN fields can be pre-populated from the original purchase order via a “turnaround” thereby reducing the likelihood of data errors.

• data Quality—Over 100 configurable data quality rules can be adjusted to ensure the buyer always receives an accurate and complete ASN. Business rules allow buyers to control whether multiple purchase orders can be consolidate into a single shipment (or ASN) and to ensure a single ASN is not split across multiple destinations.

• WMs integration—Ship notices are then directly transmitted into the Buyer’s Warehouse Management System (WMS). Active Orders supports interfaces to leading WMS from Oracle, SAP, Red Prairie, i2, JDA and Manhattan Associates.

• Barcode labeling—In addition to ASN generation, Active Orders enables suppliers to create and print barcode labels to be affixed to the physical shipment containers. When a shipment arrives at a warehouse, the barcode label can be matched against the corresponding ASN in the WMS to facilitate rapid check in.

• Proof of delivery—An electronic Proof of Delivery (POD) can be sent by a buyer or third party logistics provider to the supplier. The POD can be used a trigger for billing or a closed loop signal to track shipment status.

3 • GXS ActiveSM Orders

BUYERShip Notice

Proof of Delivery

SUPPLIER

The use of Active Orders with ASNs and barcode labels has been shown to reduce receiving time by up to 75% and reduce receiving errors by 80%.

Businesses also benefits from improved inventory management. With Active Orders, buyers and suppliers have visibility to inventory in-transit and on-order as well as expected arrival timeframes. When there is an urgent need for materials, parts or finished product, buyers can confidently assess whether the inbound inventory will arrive in time or whether an expedited shipment is necessary. Thus buyers and suppliers can optimize their use of safety stock and benefit from lowered transportation costs through a decrease in the reliance on expedited freight.

GXS Active Orders has the capabilities to facilitate complex scenarios such as drop shipping, consumer home delivery and direct store delivery.

invoicing Automation

The Invoicing Automation module within the Active Orders application allows suppliers to generate accurate invoices. More importantly, buyers can share an accurate, up-to-date view of the status of all outstanding invoices with their supplier community.

Benefits realized through the Invoicing Automation module of Active Orders include: • increased Accounts Payable Productivity—Suppliers can view the status of their

outstanding invoices through the Active Orders application. Self-service eliminates the need for a supplier’s collections staff to phone the buyer’s A/P staff about invoic-es. As a result, the volume of phone calls to your accounts payable centers decreases and your staff productivity increases.

• faster Approvals—Electronic invoicing can automate much of the invoice capture, validation and matching processes associated with processing thereby reducing the time required for approval. When invoices are processed in paper format the work-flow and approval process takes much longer. Sometimes payments can be delayed resulting in damaged relationships with supplier or credit approval processes.

• supply chain finance—Through automation, invoices can be approved in 2 -3 days after receipt, therefore buyers can seek out and negotiate trade discounts with suppliers. For example, a 2% discount for payments made within 10 days of invoice receipt could be obtained or pro-rated discounts for payments made between the

4 • GXS ActiveSM Orders

SUPPLIER Invoice

Remittance Advice

BUYER

11th and 30th days. Companies which do not wish to use their own balance sheets for early payments can route invoices to third party financial institutions which offer Supply Chain Finance services.

• Access to remittance information—The Active Orders application displays Remit-tance Advice from Buyers to Suppliers, identifying the payment settlement date as well as the payment amount. Additionally, buyers can also provide remittance details, including originating bank ID, receiving bank ID, and any applicable invoice adjustment information. Using remittance advices, Supplier’s accounts receivable groups can easily identify which payments are related to which invoices and identify any discounts taken.

• data Quality—Active Orders can eliminate a significant percentage of the manual work required to validate and match invoices by performing data quality checks before the documents are delivered to a buyer. Examples of this include:

– All mandatory invoice fields are pre-populated (e.g., Purchase Order number, Remit-to-Address or General Ledger Code).

– Invoice price matches purchase order price. – Invoice quantity matches actual goods shipped. – Invoice quantity matches actual goods received.

GXS Active Orders can also facilitate complex scenarios such as self billing and direct store delivery invoicing.

visibility throughout the Order lifecycle

The GXS Active Orders application allows for efficient order planning and execution between both an organizations internal users as well as their external supplier community. Through visibility into one web-based central interface, buyers can improve supply chain efficiency through faster identification of problems related to orders and on-going monitoring of key performance indicators.

• Order tracking—In addition to standard order information such as order numbers, quantities and shipping information, Active Orders allows buyers to track order acknowledgement requirements, advanced ship notices, delivery schedule commit-ments, and specific buyer terms.

• exceptions—Supply chain exception scorecards such as overdue shipments, invoices without shipments, late shipments, overdue payments, and fill rate exceptions are also included in Active Orders. These identify any performance metrics that have fallen outside of the pre-determined thresholds that have been set by the Buyer.

• supplier Performance Management—Through Active Orders buyers can measure both supplier community and individual supplier performance metrics through customizable pre-configured scorecards within the Active Orders application. Buyers can track and measure fill rates at the line, order, value and unit levels. Key perfor-

5 • GXS ActiveSM Orders

mance indicators (KPIs) such as delivery punctuality, ASN timeliness and order acceptance allow buyers visibility into the pulse of their supplier community provid-ing the concise information necessary to make quick decisions on improving the health of their supply chain.

6 • GXS ActiveSM Orders

supplier Performance scorecards

000

delivery Punctuality01-Jan-08 to 31-dec-08

6363

Order Acceptance01-Jan-00 to 11-Aug-08

7582

line fill rate01-Jan-00 to 11-Aug-08

0565

value fill rate01-Jan-08 to 31-dec-08

00001

Asn timeliness01-Jan-00 to 11-Aug-08

7582

invoice Accuracy01-Aug-08 to 31-Aug-08

0002

Order fill rate01-Jan-08 to 31-dec-08

3335

unit fill rate01-Jan-08 to 31-dec-08

line fill rate

Order fill rate

value fill rate

unit fill rate

NumberoffullyfilledorderlinesasapercentageofthetotalqualifiedPOlineitems

Numberofordersfullyshippedasapercentageofthetotalqualifiedpurchaseorderschedules

Shippedvalue(shippedquantity*unitprice)asapercentageoftheExpectedvalue(expectedquantity*unitprice)forqualifiedorderlines

TotalShippedquantitiesasapercentageoftotalexpectedquantities,forqualifiedorderlines

B2BScorecardsgivebuyerstheabilitytoanalyzecommunityfillrateperformanceinfourkeyareasincludingLine,Order,Value,andUnitFillRates.

PrimaryKeyPerformanceIndicators(KPIs)includingDeliveryPunctuality,ASNTimeliness,OrderAcceptance,andInvoiceAccuracyareallavailablethroughtheB2BscorecardcomponentofGXSActiveOrders.

delivery Punctuality

Asn timeliness

Order Acceptance

invoice Accuracy

Punctualshipments(PO’s‘scheduleddate’vsPOD’s‘delivereddate’includingtolerances)asapercentageofthetotalnumberofshipments

NumberoftimelyASNcreationinstancesasapercentageoftotalASNsforatimeperiod

FullyacknowledgedPOsasapercentageoftotalnumberofPOsinagivenperiod

NumberofPOsaccurately(Qty,Price)invoicedasapercentageofthetotalnumberofPOs

Why gXs Active Orders?

Improving the efficiency of your supply chain yields immediate and tangible results. Reducing waste, redundancy, and cost translates into better supply chain performance and higher levels of customer satisfaction. Users of Active Orders can realize gains from: • saas-Application—The Active Orders application is hosted by GXS in a data center

providing all the necessary maintenance, upgrades and support activities. As a hosted solution, Active Orders provides an overall reduced total cost of ownership (TCO) by leveraging existing supply chain integration systems and investments. SaaS ap-plications enable buyers to avoid the capital cost required by internally licensed software. With Active Orders you can pay as you go and pay only for what you use.

• visibility across erP Applications—Most global companies have multiple ERP systems for purchasing, invoicing, and supply chain execution. This often results in a lack of enterprise-wide visibility to the supply chain. Each organization executes transactions differently resulting in fragmented, inconsistent processes with no in-ternal control over the information. Active Orders acts as an overarching application into all the various ERP systems a business is operating.

GXS has over 40 years of experience in optimizing supply chains to improve performance and increase customer satisfaction. Contact us today to learn more about how GXS Active Orders can deliver improved visibility and performance to your B2B program.

About gXs

GXS is a leading global provider of B2B e-commerce solutions that simplify and enhance business process integration and collaboration among trading partners. Organizations worldwide, including more than 70 percent of the Fortune 500, leverage the on-demand services on GXS Trading Grid® to extend supply chain networks, optimize product launches, automate warehouse receiving, manage electronic payments and gain supply chain visibility. GXS Managed Services, GXS’ B2B outsourcing solution, empowers customers with the expertise, technical infrastructure and program support to conduct B2B e-commerce with trading partners globally.

Based in Gaithersburg, Md., GXS has an extensive global network and has local offices in the Americas, Europe and Asia-Pacific regions. GXS can be found on the Web at www.gxs.com.

AboutGXSGXSisaleadingglobalproviderofB2Be-commercesolutionsthatsimplifyandenhancebusinessprocessintegrationandcollaborationamongtrad-ingpartners.Organizationsworldwide,includingmorethan70percentoftheFortune500,leveragetheon-demandservicesonGXSTradingGrid®toextendsupplychainnetworks,optimizeproductlaunches,automatewarehousereceiving,manageelectronicpaymentsandgainsupplychainvisibility.GXSManagedServices,GXS’B2Boutsourcingsolution,empowerscustomerswiththeexpertise,technicalinfrastructureandprogramsupporttoconductB2Be-commercewithtradingpartnersglobally.BasedinGaithersburg,Md.,GXShasanextensiveglobalnetworkandhaslocalofficesintheAmericas,EuropeandAsia-Pacificregions.GXScanbefoundontheWebatwww.gxs.com.

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7 • GXS ActiveSM Orders

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