Developing a culture of Continuous Improvement requires much more than sending employees to formal quality management training. Any culture is a reflection of management and therefore needs to start at the top. Management must embrace Continuous Improvement, be an example, and get people excited about the contributions that they can make. While not a simple task, the blending of the Continuous Improvement philosophy within the overall Shared Services culture can reap tremendous benefits to the organization as a whole.

A recent Peeriosity Peercast^TM in the Accounts Payable research area featured a major multi-media conglomerate that has focused significant resources over the past decade to streamline its back-office operations and implement a world-class Shared Services operation.  Utilizing a hub and spoke model, with the primary service center in the United States and additional centers in Europe, Asia, and South America, they have been able to leverage the capabilities of Lean Six Sigma to drive process optimization, with Continuous Improvement being well established within their Shared Services culture.

The feature company shared how its Accounts Payable operation has achieved particular success in the area of eliminating invoice defects.  Using the DMAIC model, which is a core tenet of the Six Sigma quality discipline, they first defined the problems they were facing in this area and then carried out the process mapping effort.

The invoice defects they discovered were categorized as either Upfront Defects or PO Defects, including the following:

• Upfront Defects
  • Invalid PO number
  • Under-Funded PO
  • Incorrect legal entity name
  • No VAT identification number
  • Invoice not legible
• PO Defects
  • Banking or address not matching
  • Incorrect tax amount
  • PO not released
  • Goods receipt required
  • Incorrect PO

The company then quantified these defects by region, as well as their impact on the aging report.  By prioritizing defects based on volumes and effort, they could then go back to the “Define” stage as a continuous improvement model to determine how to further automate or correct the highest remaining causes for items to defect.

Specific examples were then provided by the featured company related to the tools they now use to track and monitor their progress in this area. 

In conjunction with this Peercast^TM were two iPolling^TM questions.  The first question asked for the opinion of the member companies regarding whether the Continuous Improvement philosophy has been blended into the culture of their Purchase-to-Pay organization to the point where maximum success and impact are being achieved.  The results are clearly in the affirmative, with 19% saying they “Strongly Agree” and another 48% saying they “Agree”. 

The second poll question then addressed the topic of what would have the most impact in enhancing the Continuous Improvement program in Purchase-to-Pay.  Not surprisingly, the need for more time for the team to work on projects (48%) was the most popular response, followed by the need to develop a more formal process improvement program at 24% of the participating companies.

Some of the comments from Peeriosity members related to the poll include the following:

Consumer Products & Services Member:  With our recent outsourcing initiative, we are now getting visibility into our P2P opportunities globally. The focus on CI varies by region and is subject to other business priorities and resources. However, in order for improvements to be implemented and sustained, there needs to support from senior management.

Computers & Electronics Member:  Documenting lessons learned will help in continuous process improvements.

Consumer Products & Services Member:  I think we have come a long way with CI, but still have opportunities to eliminate the silos within North America Purchase-to-Pay. A little more time and resources would also be helpful as we try to develop the CI culture within the lowest levels of our organization.

Media & Entertainment Member:  Many times, we are asking employees to do their normal jobs and process improvement initiatives. Unfortunately this puts a limit on how many we can successfully complete.

Consumer Products & Services Member:  We now involve end users in Process Improvement projects from the Design/Testing phases so they actively participate, provide their input, and better understand its flow.

Manufacturing Member:  More time available for IT to work on improvement projects, more analysis of data to identify areas to target for the biggest improvement, and more root cause/corrective action all would have a substantial positive impact on continuous improvement. The challenge is in carving out the additional time to work on these things.

How well engrained in the culture of your P2P organization is Continuous Improvement?  Are there opportunities to reduce the number of invoice defects using a structured approach to diagnose and resolve the root causes of these exceptions?

Who are your peers and how are you collaborating with them?

“Peercasts^TM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion.  Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content.  Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member.  Using Peeriosity’s integrated email system, Peer Mail^TM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees. 

“iPolling^TM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility of all respondents and their comments. Using Peeriosity’s integrated email system, Peer Mail^TM, members can easily communicate at any time with others who participated in iPolling.