Case Studies

Automated Communication Solution Improves Efficiency of Purchase Order System

Project at a Glance
RDA developed an automated communication mechanism utilizing Microsoft BizTalk Server 2006 and SQL Server 2005 to deliver and receive purchase orders and invoices for this leading metals manufacturer. Our solution improved the accounts payable process by several days, reduced invoice mismatches and significantly reduced overall invoice related issues.

About Our Client

RDA's client is a world leader in the technology, production and marketing of specialty metals as well as other advanced alloys, including stainless steel, nickel alloys, titanium, armor materials, silicon electrical steels, and tool steels.

Background

Our client had a partner interface capability in place that required many internal resources at a very high cost. In order to address the business problem and significantly reduce the annual cost associated with maintenance, repair and operational (MRO) procurement, the company decided to outsource much of its MRO procurement to one source and needed to develop an automated communication mechanism to deliver purchase orders and receive purchase order acknowledgments and invoices.

Solution Detail

RDA employed Microsoft BizTalk Server 2006 and SQL Server 2005 for the solution. The resulting approach accomplished the following goals:

• Delivers outbound PO Transactions from the procurement system to the client's trading partner. The interface implements a guaranteed delivery system, via the use of functional/technical acknowledgments.
• Receives inbound PO acknowledgments back and delivers them to the procurement system. These acknowledgments have the ability to update information on the original purchase order (e.g. quantity).
• Receives inbound invoices back and delivers them to the procurement system. This interface implements a guaranteed delivery system via the use of functional/technical acknowledgments.
• Provides appropriate system level monitoring and error handling to allow the client to effectively monitor the status of the system, and quickly respond to any errors.
• Captures and stores information about the transactions flowing through the system in a fashion that allows the client to develop technical and business reports that give them an accurate picture of the data flowing through the system.

Challenges

The implementation has complex business rules and alert notification logic which may be frequently modified to tune the process. The BizTalk 2006 Business Rule Engine was leveraged to make this easily configurable and modifiable without requiring that the system be brought down for a change.

The solution employs complex mapping rules between a legacy system, which communicates via a daily batch process where a single flat file is sent and received on a daily basis, and another system, where POs and invoices are sent/received one at a time as individual XML files.

In addition, the project included highly detailed archiving requirements to support reporting against PO and invoice data, showing a history of multiple acknowledgments and invoices against a single PO. The associated data purging requirements were based on time, state of the PO, etc.

Benefits

RDA's client is experiencing the following benefits as a result of this project:

• The ability to track the integration with their business partner via reports and email alerts when issues arise. This results in much quicker resolution of issues, with a significant reduction in overdue orders which can impact a plant's productivity.
• Significant reduction in invoice mismatches. Electronic order acknowledgement allows for POs to have the correct price and quantity to be delivered maintained electronically to avoid downstream errors.
• Improved efficiency. Electronic invoicing ensures that invoices are received promptly and directly into the accounts payables system, speeding up the process by several days and reducing the volume of invoices going through workflow and getting hung up due to data entry issues.
• Significant reduction in overall invoice related problems as a result of robust electronic integration achieved through PO, order acknowledgements, and invoicing.

Technically Speaking

The following diagram graphically depicts the Partner Interface solution:

Three major interfaces exist: Outbound PO Transaction, Inbound PO Acknowledgement, and Inbound Invoice.

• Outbound PO Transaction - This section of the Procurement interface is responsible for delivering the client's MRO purchase orders, which are approved and generated in their procurement system to their trading partner for fulfillment. The purchase orders are generated in a batch and then split up into single messages for delivery via HTTPS. Each individual message receives an individual PO acknowledgement HTTP 200 OK response, which is used to verify delivery.
• Inbound PO Acknowledgement - This section of the Procurement interface is responsible for the formal acknowledgements for each purchase order from the trading partner. Purchase order acknowledgements are delivered to the client on an individual basis. The company responds to the message with an HTTP 200 OK response. Acknowledgements are processed and queued so that they can be delivered to the procurement system as a single batch (single file). Any PO acknowledgements which have not been received within a period of three days generates a notification email to both the client and the trading partner for follow-up, listing all outstanding acknowledgements sorted by date.
• Inbound Invoice - The inbound invoice section of the Procurement interface is responsible for receiving invoice messages from the trading partner for delivery to the procurement system. Invoices are delivered as individual messages. Each invoice received generates an HTTP 200 OK response to the trading partner. Each invoice message received is then processed via a validity check and finally delivered to the procurement system so that it is received in a batch which includes that day's invoices.