DRIVING THE TRIPLE C FACTOR

Costs down, compliance up and cycle time contracted

Driving the triple C factor:

Compliance upCosts down Cycle time contracted

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Industry reference

Aberdeen Group (2007)

5% reduction in bottom line costs

20% improvement in the top line

Paper manufacturers

embrace electronic media

Good business practice

Improvingproductivity

SAPPI

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Our business

Planting

Depot

Maintenance

Fellings

Shorthaul

Seedlings

R&D

Transport

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Our business

2 slides

Goodreturns

Strongbalance sheet

To ensure that Sappi is an exciting, growing and profitable leader

in paper and specialised cellulose.

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Our business

How?

Maintaining and growing global

leadership position as a low

cost dissolving wood pulp producer

Growing high margin speciality paper business in

all regions

Smaller and simpler low cost

graphic paper business

Maximising value from our

forestry operations in SA

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Our diverse business = broad supplier base

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Our business: touching you …

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Our business: bringing it home

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Global footprint, local flavour

screen

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Our business: countrywide

Enstra200kton uncoated fine paper

Ngodwana195kton paper pulp230kton kraft paper140kton newsprint210kton dissolving wood pulp

Tugela280kton kraft paper130kton paper pulp

Stanger110kton coated paper & tissue60kton pulp

Cape Kraft60kton kraft paper

42% local uncoated paper

28% coated fine paper

40%of SA’s packaging

paper requirements

36%of local newsprint

supply

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Our biggest asset: our people

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AP process

Industry hype: shared services

Accounts payable: goods and services

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Shared services

Opportunity for Sappi

Reduce waste

Lean six sigma: green belt

Business process mapping

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Shared services

Reduce geographical creditors

clerk footprint

Business process mapping:

as-is at the time, identify gaps, propose

opportunities

Scan paper invoices / capability

to receive SARS compliant email pdf

(128kb encrypted)

Another challenge borne –

courier costs, lag time in transporting

invoice to hub

Birth of technology

Re-deploy team centrally,

right sizing exercise

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Technology investigation

Technology feasibility and

capability

Business process management Value

engineering

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Value engineering

Travel and expense reporting

Time recording and travel booking

Travel charges are integrated with

payroll

Multiple payment methods including

electronic payments

Automatic audit Integrated with the G/L Automatic alerts

Accounts payable and expense

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Value engineering

Average cycle time for

creation of annual forecast

(in days)

Total external audit cost incurred

(in selected currency)

% of invoices using online processing

% discounts lost from suppliers

Average discount

(in %)

Average time to close

monthly books(in days)

Average time to create a new report

for which there is no previously defined report

template

(in days)

Annual purchase amount eligible for discounts (in million currency)

Key metrics: AP AR

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Value engineering

Shared services hub for account payments

Task:process 144k invoices annuallyacross 8 company codes

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Enter ReadSoft

Evaluated alternate products in the

marketplace and competitors are present

at Saphila 2014.

Sappi EU and NA use the product, so it was a non-event in the choice

of ReadSoft.

Sappi single SAP project presented timeline and challenges, resulting in

upgrade to EUNA’s ReadSoft environment.

Preferred technology of choice:

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Invoices

Enter ReadSoft

Preferred technology of choice:

InputPaper

Image file PDF XML Fax

EmailInvoices

OutputInvoice image files

Invoice dataTarget system

Configuration & administration

Optimise

Manager

Interpret VerifyScan Transfer

Production

Interpretation tuning

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Measures of success

70% 31

ReadSoft tool with optimised

functionalityRight first time: Invoices processed

per clerk per day

Opportunity for continuous

improvement

(EU standard in Poland is 33)

CURRENT ACTIVITIES

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Measures of success

Overdue workflows

669587

685

906

1118

719 689

August September October November December January February

ROAD AHEAD

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Continuous improvement

InfrastructureHardware Architecture

Slow response time

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Continuous improvement

Technology focus: tweaking the engine

Optimising the scan to improve right first time

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Continuous improvement

Reduce workflowsImprove GR/IR ‘Touch less’ invoices

Training: Goods receipt, service acceptance and workflow handling

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Way forward

Shared services AP is proving success Payroll next opportunity

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Self-reflection

Compliance upCosts down Cycle time contracted

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Your turn!Questions and queries

Feedback: did you enjoy it?

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Koosh PandayMobile +27 83 235 2932

koosh.panday@sappi.comLinkedIn:

koosh.panday@telkomsa.net