Optimization of purchase order processing

Phoenix Contact GmbH & Co. KG is a global market leader in the field of technology for electrical connections, electronic interfaces and industrial automation. The company has 10,200 employees, including 5,600 in Germany. The product spectrum comprises modern components and system solutions in the areas of electro engineering and electronics. Phoenix Contact also offers comprehensive service activities as well as training courses and seminars. The design and development departments continually implement innovative product ideas. Products from Phoenix Contact are used in the areas of industrial automation, power supply, equipment, machine and plant engineering and building installations.


A focus on service quality

PHOENIX CONTACT sells electronic components to more than 10,000 customers in Germany. Each day the specialists for industrial electro engineering receive more than 1,000 purchase orders by fax or e-mail in five decentral sales units.

The purchase orders were previously processed manually, including entering the data into the SAP system. Purchase order information was only available in SAP after the purchase order information had been entered. Completing the processing activities each day was only possible with a great deal of work. Processing telephone queries from customers about purchase orders was an arduous and time-consuming procedure. Tracking and reporting were also correspondingly complex.

PHOENIX CONTACT therefore planned to automate the purchase order processing system further. The aim was to ensure that the purchase order process was transparent throughout and to facilitate improved monitoring and control. Reducing the throughput time from receipt of the purchase order to goods issue was also intended to increase the time staff actively spend on sales activities.


Automated incoming purchase orders

The automated processing of purchase orders places extremely demanding requirements on the analysis and interpretation capability of software with respect to document recognition. Purchase orders are received at PHOENIX CONTACT in any format, from a heterogeneous customer base, ranging from multipage documents to handwritten faxes. As opposed to vendor invoices, there is usually no process that can be assigned to the purchase order document as a reference for incoming purchase orders.

With the smart ORDER product from Insiders Technologies, PHOENIX CONTACT now uses a high-performance standard solution for processing purchase order and order documents. This is based on an approach that ensures that the purchase orders do not have to be forms but can be any type of document. Document recognition and data extraction on the basis of the intelligent matching of customer master and article data makes this possible. All the data relevant to the purchase order is extracted, irrespective of where it is positioned on the purchase order, and fuzzy text recognition matches and different ways of writing are resolved. In combination with the system's self-learning ability, excellent recognition rates are therefore achieved with a minimum amount of maintenance work.

All incoming purchase order documents at PHOENIX CONTACT can therefore be processed by smart ORDER without additional modification. Purchase orders from new, previously unknown customers are also processed without problems.

Consistent process

The incoming purchase orders at PHOENIX CONTACT (fax, e-mail, letter) are collected from the server and are classified automatically after text recognition. Then, all the relevant information (name of the ordering party, article number etc.) is extracted and checked. During this process, smart ORDER makes automatic corrections or makes suggestions for improvement. In the event that recognition is uncertain, the purchase orders are forwarded for manual postprocessing. The data relevant to the purchase order is then transferred to the SAP system. At the same time, the purchase order documents are automatically archived.

The reporting function of smart ORDER provides an overview of incoming purchase order processing and supplies statistics that are important for control and optimization, e.g. the analysis quality and the verification duration.

Overview of all
the advantages

  • Incoming order processing reduced from 5 to 1-1.5 minutes
  • Entire throughput time reduced from up to 8 hours to a maximum of 30 minutes – purchase orders received by 17:00 processed on same day
  • Automatic capturing of all documents
  • Correct identification of the ordering party in more than 90% of cases
  • Fully-automated processing up to delivery in more than 70% of cases
  • Able to provide person-independent information at any time within the process from when the purchase order is received
  • Measures key parameters (e.g. processing/idle times) to realize additional optimization potentia
  • Automatic archiving
  • Return on investment within a year