Case study: Crane Group

“We wanted better visibility and control over our financial transactions,” says Mark Conelly, CFO, Crane Distribution. “With our eCom implementation, we got all that and more.”

• Better transaction visibility and measurability
• Streamlined business processes
• Reduced accounting costs
• Improved process reporting

Mark, some of our readers won’t have heard of Crane Distribution. But you’re a big organisation, aren’t you?
Crane Distribution is New Zealand’s largest distributor/retailer of plumbing and electrical supplies. It is a listed company on the ASX with turnover of about $2.1 billion and is just about entirely New Zealand and Australian companies. It encompasses Mico Plumbing and Pipelines and Mastertrade/Cory’s Electrical.

What were the issues that prompted you to approach eCom?
We were conscious that with our large distributor network we didn’t have visibility of invoices that were not paid and we couldn’t manage resolution well because we were constantly retrieving documents, requesting photocopies and recirculating them through the network back to branch.

If a document doesn’t match the receipt log from the branch then it doesn’t get paid until a resolution is agreed. About 80 to 85% match first time, but that 15% represents significant volume. So we always thought that to get better performance and efficiencies of scale, we had to get visibility of our invoices that were going wrong. We spent 80% of our time getting 85% of the invoices processed that matched first time, but this didn’t leave us with enough time to focus on the ones that failed. We wanted to get to where the invoices that matched cleanly, let’s get them matched quicker and gone, and free up more time to focus on issue resolution on the ones that don’t match.

We didn’t know by branch what the issues were, we didn’t know by supplier, we didn’t know what our good and bad features were. We would rely on a feeling or an intuition. Say we’re always having problems with Supplier X, then it became sort of folklore that that supplier was a problem now. But we never knew for certain whether that supplier really was worse than others.

How was visibility after implementation?
Boy, did we get visibility! You need to know the facts and be able to measure performance and outcomes to get visibility about status, collaboration and all those sorts of things.

It allowed us to focus better on what the issues were and exactly where they were. But what was worse – or better in some ways – we could measure it for the first time.

Previously, if we wanted to report on some of the performance issues within accounts payable in terms of matching percentages or whatever it was, we would literally have to stop the department and hand count documents to get a sense of perspective.

The measurement you had must be invaluable.
Absolutely. For the first time we could focus resource where it needed to be focused. Not only can we say which branch is failing but we can also say what date they are failing at or even which operator is failing, and you can focus on some of the core reasons for it.

So it’s not just a matter of resolving issues faster now, but also identifying why they occur so you can ‘cut them off at the pass’ in future?
That's right. It brought all these things very quickly into focus. Previously, we were focused on the outcome rather than the cause, and I said you have to ask the question why this was and it all resulted from poor purchasing and poor receipting at the branch. We had known this forever but the branches had never accepted it. A branch manager said, “I can’t believe this is happening.” I said, “Well it’s been happening forever; it's just that we all know for sure now.”

Can you talk about the scale?
We handle 70 to75,000 documents a month, which would be in the top 8 to 10 businesses in New Zealand for volume.

Any other benefits we haven’t touched on?
Now we can just press buttons and pull up a view and know who has looked at a task, when they looked at it, what they did with it, what they are waiting for. You don’t have to ring them, you don’t have to talk to someone in Rotorua; you can view information from a central location and collaborate together through messaging.

In the past there was never anything that was done about KPIs in terms of what is your match rate 50% to 80% or whatever. Well now we can set these and monitor them with a click.