Growing fast by acquisition, Southwire must engage with more freight partners than ever. Invoice automation could help manage the growth cost-effectively—but smaller partners lacked EDI capabilities.
Southwire switched from manual, paper-based invoice processing to a highly automated managed-services platform, enabling partners without EDI systems to submit digital invoices via a web portal.
Supportsa 100% increase in trading partners while keeping personnel costs flat
Saves40 hours/week, freeing the transportation team to focus on value-added activities
Acceleratesinvoice payments by 40%, strengthening supplier relationships
Business challenge story
New acquisitions, new partnerships
When we switch on the lights, flick on the TV or charge our phones, we rarely think about the infrastructure that keeps us connected to the world around us. Southwire—one of the world’s leading developers, manufacturers and suppliers of building wire and utility cable—plays a key role in supporting electricity transmission infrastructure across North America.
Tiffany Jacobs, EDI / PI Manager at Southwire Company, explains: “As well as delivering products for infrastructure and industrial applications, we are growing into consumer and retail markets. We are also innovating our product lines, including services and solutions that enable contractors to install our wires and cabling faster and more cost-effectively. We’ve recently even created a center of excellence to help train contractors in best practices around installation, health and safety, and efficiency.
“We are continuing to grow rapidly, and much of our expansion is through acquisition. Bringing new businesses into the company helps us to extend our market reach, but it also brings new challenges. As the number of manufacturing plants and business volumes increase, we need to ensure that we have sufficient freight partners to handle plant-to-plant transfers and customer deliveries effectively.”
As its trading partner base expanded, Southwire realized that it needed a more efficient way to manage the relationships—especially for smaller freight companies.
“Many of our trading partners for freight are the small ‘mom and pop’ organizations centered around manufacturing plants, distribution hubs and rail stations,” Jacobs continues. “As well as supporting the local economy, working with smaller providers is in many cases more cost-effective than working with larger companies.
“Most of our smaller partners lack EDI capabilities, and the majority submitted their invoices on paper, which one of our accounts payable clerks would have to manually review and re-key into our payments system. As well as being a time-consuming process, this approach made it difficult to check on the status of individual payments.
“As our business—and trading partner—growth accelerated, we realized that the paper-based processes would become an increasing drag on efficiency, and we decided to look for a way to bring the efficiency and automation of EDI to our smaller freight partners.”
Lightening the load
In parallel to a wider transformation initiative aimed at standardizing and integrating business processes across the enterprise, Southwire began its journey towards fully automated B2B integration.
“Moving the business to an enterprise-class ERP solution was a key focus of our transformation project, and from the EDI perspective, the progress of that work created opportunities to streamline the invoicing process for our smaller freight partners,” explains Jacobs.
“As the first step towards automation, we incorporated a managed service based on optical character recognition [OCR] into the invoicing process. This stage still required a member of our accounts payable team to review paper invoices, but instead of re-keying the information into our ERP system, all they had to do was stamp the document with the information that our payment system required. When a batch of invoices were ready, we submitted them into the OCR process, where the necessary invoice data was extracted, transformed and submitted for payment.”
As its business process integration project moved forward and the systems that supported it matured, Southwire’s EDI team seized the opportunity to make the leap to a more highly automated invoicing process.
“Our work around OCR had already given us the confidence that the managed services route was the optimal choice to make the final shift from paper to paperless invoicing for smaller partners,” Jacobs recalls.
“We decided to replace our OCR process with a security-rich web portal, and provide each partner with a user account. Once a freight job is complete, the partner logs into the portal, and a series of digital forms leads them through the invoice submission process. At every stage, the system checks that the submitted data corresponds with the requirements of the field, which ensures data is clean before it is accepted into the system. Once a partner submits an invoice on the web portal, it is converted into a 210 message—a format designed to replace paper invoices for motor carrier freight companies.”
Southwire now supports more than 200 small freight carriers on its web portal using just one data map.
“Our new approach dramatically reduces the complexity of the invoicing process,” says Jacobs. “Nowadays, everyone knows how to log into a website, and we provide detailed instructions to help new partners get started quickly. Better still, we offer the service at no cost to our trading partners—all they have to do is sign up.”
Surging ahead in growth markets
By enabling trading partners without advanced EDI capabilities to communicate via its online portal, Southwire is achieving its goal of driving acquisitive growth without sending the cost and complexity of partner integration spiraling.
“Since we deployed our web portal, we have made three major acquisitions,” says Jacobs. “In the past, processing the additional paper-based invoices would have created substantial work for our accounts payable team, even with the OCR process.
“Thanks to our automated process, managing the increased volumes was no problem at all—we simply invited those carriers in the region without EDI capabilities to log into the portal. The new way of working is so versatile that I don’t even have to test new partners on the system. Validation for fields such as purchase order numbers and bills of lading happens as partners enter their invoicing information, which makes it very difficult for erroneous data to slip through.”
By reducing the amount of manual work required to onboard new partners, Southwire’s transportation team can invest more time in value-added tasks.
“In total, we estimate that our automated invoicing process saves more than 40 hours per week across the department,” adds Jacobs. “The time we save means the team is free to focus on important activities such as negotiating new contracts with our carriers, resolving freight claims and disputes, and building customized solutions for special hauling requirements.”
She continues: “In fact, we now work with double the number of freight partners that we did in 2009 with no increase in headcount in accounts payable—helping to contain our operational costs. We place around USD155 million in annual freight spend and process more than 25,000 invoices per month, and accommodating those volumes with paper-based invoicing would be very costly.”
The web portal solution has enabled Southwire to shrink the average time from the moment of shipment to invoice payment by 40 percent for all its partners. Faster processing is particularly valuable for smaller partners, as it enables them to improve their cashflow and solve issues more quickly.
“Offering faster payments strengthens our relationship with smaller suppliers in the community, who can be more vulnerable to cashflow challenges,” adds Jacobs. “Our new process also offers a searchable audit trail, which means it’s more straightforward for the EDI or logistics team to track invoice numbers and find where a payment is in the process if we receive a question from a partner.”
By embracing paperless invoicing, Southwire is shaping even more efficient and cost-effective operations that support its future growth.
“As our business expands, we’re actually onboarding more new freight partners than customers, and it’s vital we can integrate seamlessly with companies of any size,” concludes Jacobs. “Our web portal helps us integrate with hundreds of small freight companies quickly and cost-effectively—supporting our continued growth.”
Founded in 1950 and headquartered in Carrollton, GA, Southwire is one of the world’s leading developers, manufacturers and suppliers of building wire and utility cable, as well as the tools used in their installation. The company serves clients across a wide range of sectors, including residential, commercial, mining, industrial, and electricity transmission.
- IBM Sterling Supply Chain Business Network