The Business Case for Paperless Manufacturing
– using ECM to improve services
The Business Case for
Paperless Manufacturing
– using ECM to improve services
Introduction
In this article we will look at two use cases as they apply to going paper-free in the manufacturing sector.
The first use case, of an accounts payable (AP) specialist working in a sheet metal plant. Incoming invoices are up
30% in the last three months; the field data contained is entered manually by the professional and two other fulltime
employees. The team is relegated to tedious data entry tasks to process invoices, tasks which are error prone and
preventing their repurposing to more value added positons. Outbound delivery receipts have also proved problematic,
as the professional’s company lacks an e-signature mechanism. This case looks at the ways e-signing and automating
workflows can be used in such an everyday situation, to improve processes and lower costs.
Background
The back-office in a sheet metal shop is currently going
through a process improvement project to reduce the
amount of paper they handle. The primary goal is to lessen
costs, increase productivity, and reduce errors associated
with manual data entry of AP aging reports, invoices, and
postings. Although the majority of invoices are delivered
electronically—most are printed anyway.
Elsewhere in the business, field workers have not been
equipped with devices to capture e-signatures, instead
relying on wet-ink signatures to ensure document integrity.
Traditional signing adds lag time to status confirmations,
and risks potential inaccuracies when drafting documents
without awareness to changes not yet reported.
With a 4x average improvement in speed of response,
removing paper from processes with scanning and
capture technology is a well-established business
benefit.1
Figure 1: By how much do you think driving paper out
of the process using scanning and capture, improves
or would improve the speed of response of your
organization to customers, suppliers, citizens or staff?
0%
20%
30%
No improvement
1.5x faster
The Solution – The Office
2x faster
The sheet metal shop has installed a new enterprise content
management system (ECM), but user adoption issues are a
concern, and the project has stalled. With a renewed push
by upper-management, invoice scanning and capture are
integrated to AP processes and are being used to automate
the workflow. Invoices are saved as compressed, searchable
PDFs allowing easier storage, access, transfer, and retrieval
of unstructured content and other financial documents.
Workers hand-off their manual tasks to be automated by
the ECM system, and then oversee the process to ensure
accuracy.
3x faster
4-5x faster
5-8x faster
10x faster
20x or more faster
0%
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10%
l
20% 40% 60%
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3 months
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The Business Case for Paperless Manufacturing
– using ECM to improve services
0%
10%
20%
30%
No improvement
The downside becomes a user interface that some workers
don’t enjoy using. Others are resistant to change, and prefer
to continue working with paper. Senior management wisely
allocates the required hours of training to push through the
initial usability hurdles. Workers that have been more closely
involved in the rollout of the project are more supportive
of the effort. The new ECM system is designated as the
company’s official invoicing processing hub, and therefore,
all employee performance review and metrics are linked, in a
plan to gradually phase out paper.
The Solution – The Field
Devices to capture electronic signatures on location, in
real time are distributed to field teams. Designed to gather
additional layers of metadata, such as timestamps, and
automatically serve up identification information before a
delivery, workers are happy to throw out their clipboards.
Recognition of delivery confirmations and receipts occurs on
location, synching with an ECM system back at base to notify
key personnel—such as the (AP) specialist—and streamline
processes.
The Accounts Payable Specialist
After an initial period of resistance, the professional begins
to stop printing electronically received invoices, or manually
entering data into the legacy software. Watching a senior
manager adopt the ECM system to manage complex
contracts or other unstructured data, gave the professional the
confidence and support to do the same for structured content
such as invoices, and hand over habitual tasks to the ECM
system.
The professional was capable of processing an average of
150 invoices per day. The ECM system was capable of
processing 300 invoices in three hours. The professional’s
role transitioned to supervise the invoicing processing handled
1.5x faster
by the ECM. With
a human overseeing, machine recognition
improved accuracy compared to manual data processing.
2x faster
Due to cost savings and reduced need for manual work, the
professional was eventually repurposed to assist with payroll,
fasterrole. Overall, paper was removed
in a more value3xadded
from major accounts payable processes, and resulted in cost
4-5x faster
savings and early
payment discounts.
5-8x faster
35% of respondents
10x faster experienced return on
investment of their paper-free projects within one
3
year
20xoforlaunch.
more faster
Figure 2: Overall, what would you say has generally
been the payback period for these paper-free
process projects?
0%
20% 40% 60%
3 months
6 months
12 months
18 months
2 years
3 years
More than 3 years
Don't know
60%
50%
40%
Alternatively
30%
Without the improvement project and the use of ECM technology, the process
20% would have been very different.
While manual invoice processing would have continued to meet its processing goals for the time being, once the
10%The professional would not have the
business grew in size, manual paper processes would prove the bottleneck.
opportunity to branch out to other more value-added positions in the organization.
In addition, forgoing e-signature
0%
capabilities and continuing on with paper methods would lead to falling behind competitors. We need to bring the
business closer to the customer, and do our best to speed up response times to customers, suppliers, citizens, and
staff, or risk stagnation.
0% 10% 20% 30% 40%
No more producve
10% more producve
2
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15% more producve
2x faster
The Business Case for Paperless Manufacturing
3x faster
– using ECM to improve services
4-5x faster
5-8x faster
10x faster
The second use case, of a quality inspector specialized in the assessment of industrial machine parts. Paper
time cards and “clocking in/out” is a daily routine for the inspector.
However,
these days the inspector is
20x or
more faster
growing uncomfortable with the process. Every day, employees select their time card from a rack and “punch
in.” The process was slow, and often caused daily bottlenecks during peak hours and shift changes. On the
time card, the commonly used practice is to print the employee’s name and social security number—exposing
employee privacy.
0%
20% 40% 60%
The inspector—made aware of high profile security breaches on the news—has grown more concerned about
identity theft, and has broached the issue of information security with his
supervisor and HR. Meanwhile, at an
3 months
operational level, the organization is in the early stages of considering ways to preserve the integrity of critical
information, such as logs, records and contracts. This case looks at the6ways
ECM and paper-free systems can
months
be used in such an everyday situation, to shore up data security and protect sensitive information.
12 months
18 months
Background
A manufacturer has been holding high-level discussions
for months about taking their information management
to the next level. However, it has been a challenge to
turn the dials on implementing an ECM deployment. Key
decision makers have been aware of the cost of paper-laden
processes in terms of slowed efficiency, but this hasn’t been
enough to spur change. Now, momentum is increasing as
concerns about compliance and risk are reaching a boiling
point. Time card systems are breaking best practices in
safeguarding the privacy of employee information, and
without information management systems in play, other
critical documents throughout the organization are equally
at risk. Upper management decides to undergo a process
improvement project to “right the ship” and prepare for
future security and liability challenges.
The number 2ofyears
large organizations citing compliance
and risk (blue) as the largest driver for information
yearsrisen sharply in the past year from
management3 has
38% to 59%. Cost and efficiency steadies at 38%
More than 3 years
(red).2
know
Figure 3:Don't
When
you consider your document and
records management projects, what is the most
significant business driver for your organization?
60%
50%
40%
30%
20%
The Solution - HR
10%
The manufacturer has installed a small force of network
scanners at key points in the human resource office. These
scanners are used to convert paper files as part of formal
workflows, and streamline activities such as performance
reviews or onboarding new employees. The goal is to create
a central point of access for all relevant information.
One of the main issues troubling human resources has been
ensuring data integrity, from knowing who last opened,
saved or made changes to a particular document. This
problem is felt in other parts of the organization as well,
and lack of version control has led to rework, waste, and
inconsistencies. ECM leverages metadata to provide greater
visibility of information, and preserves uniform standards in
classification to assist with document control.
Before the ECM deployment, a major complaint was how
vulnerable employee personal information was due to an
open office floor plan. Some file cabinets were often
0%
0% 10%
20% 30%
left unattended, sometimes
unlocked.
Any40%
passerby
could access sensitive identification data such as benefit
summaries,
contact info, and salary.
No more producve
ECM
fixes this problem with digital transformation—
10% more producve
managing sensitive data digitally. Human resource
workers
areproducve
quick to pick up the new technology and gain
15% more
the greater security benefits of the digital format. In four
months,
HRproducve
staff are finding that protecting critical HR
20% more
information while making it accessible to specific people in
33%
more producve
the
organization
is becoming easier.
50% more producve
75% more producve
100% (twice as
producve) or more
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The Business Case for Paperless Manufacturing
60%
– using ECM to improve services
50%
40%
30%
The Solution – Electronic
Time Cards
Combining cross functional teams of HR, payroll, and
management, the manufacturer renovated their paper-based
timecard system and came up with a digital solution. Social
security numbers were replaced with a digital entry system
which utilizes employee identification cards. Using a digital
sensor, employees now swipe their photo IDs to “clock-in.”
The process of clocking-in and out has been streamlined, and
employee bottlenecks when punching the clock are a thing of
the past. Buddy punching has been reduced since employees
must now use their own IDs, and there are no more lost paper
time cards. Employee privacy is also maintained, with the
phasing out of social security numbers.
Figure 4: By how much do you think driving paper out
of the process using scanning and capture improves or
would improve the productivity of process staff in your
organization?
0% 10% 20% 30% 40%
No more producve
10% more producve
15% more producve
The Solution – Integrated
Attendance
20% more producve
Using this opportunity to rehaul the entire attendance process,
the new digital sensor for clocking-in has been integrated
with ECM and automated workflows in the manufacturing
organization—driving out paper time cards. Now when
an employee swipes their badge, important attendance
information is automatically saved and routed to payroll and
HR. This information populates fields in payroll software to
ensure the correct hour-to wage compensation, and provides
a convenient, self-service database for employees to access
archive time cards or hour/wage inquiries.
50% more producve
In addition, exceptions to schedules like lateness or leaving
early are easily identified. The system also restricts employees
from “clocking-in” before their shift begins. This information
can be tallied to reward and remediate employees based on
their attendance, to boost productivity in the workforce and
encourage good working habits.
The Quality Inspector
Involved early in the process to deploy the ECM system, the
inspector had the opportunity to provide feedback and describe
his personal concerns. He was listened to, and his opinions
have helped shape company decision making throughout the
deployment of ECM and the digital “clock-in” system. For these
reasons, the inspector feels a sense of ownership of the ECM
system and has immediately taken to its use.
Incentivized by the reward-based attendance, the inspector
hopes to gain an edge for his performance review. Each day,
the inspector spends less time getting ready for work during
shift changes, and is able to transition to his tasks and become
productive faster. The greatest value is the heightened visibility
of human resource documents and wage/hourly information.
With it, the inspector maintains accuracy of his bi-weekly
wages and ensures compliance with employer policy.
4
20%
Increased productivity
is often cited as one of the main
benefits of paper-free processes and AIIM research backs
10%
this up. Of those that responded to the survey the average
productivity improvement
was 30%.1
0%
©AIIM http://www.aiim.org
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33% more producve
75% more producve
100% (twice as
producve) or more
Alternatively
Without the improvement project and the use of
ECM technology, the process would have been
very different. While clock-in/out routines in this
manufacturing organization would have continued
without incident in the short term, dissatisfaction
for the employer’s lack of vigilance to protect
confidential employee information would surely
spread to other workers and lower morale. Instead
of becoming galvanized by a successful team
project to solve a company problem, the inspector
may have become less willing to support the
business in future development, and grow fed
up with the duplicative work, inaccuracies, and
overall information chaos faced in their daily tasks.
When it comes to information security, paper is
a vulnerable medium. Lacking metadata, version
control, sophisticated audit trails, and accessibility,
paper no matter how well it is regulated increases
the risk of the organization and slows down
efficiency. Workers need the right tools to be
productive, and are ineffective when anchored to
slow, paper processes.
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The Business Case for Paperless Manufacturing
– using ECM to improve services
References
AIIM Industry Watch titled “Winning the Paper Wars – capture the content and mobilize the process troops”
www.aiim.org/research
1
AIIM Industry Watch titled “Information Management - State of the Industry 2016”
www.aiim.org/research
2
AIIM Industry Watch titled “Paper-Free in 2016 - Are we there yet?”
www.aiim.org/research
3
About the author
Thomas LaMonte
Thomas LaMonte is an AIIM Market Intelligence Researcher well versed
and credentialed in the fields of ECM, ERM, and BPM with a heightened
focus on solving the operational problems of today’s businesses.
Market Intelligence
Researcher, AIIM
© 2016
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100 Williams Drive
Ramsey, NJ 07446
201 818-5712
http://kmbs.konicaminolta.us/
About Konica Minolta
Konica Minolta Business Solutions U.S.A., Inc. is a leader in information management focused on enterprise
content, technology optimization and cloud services. Our portfolio of offerings deliver solutions to improve our
customers’ speed to market, manage technology costs, and facilitate the sharing of information to increase
productivity. Konica Minolta has won numerous awards and recognitions, including placement in the Leaders
Quadrant on the Gartner 2014 Magic Quadrant for Managed Print Services (MPS) and Managed Content Services
(MCS). Konica Minolta has been recognized as the #1 Brand for Customer Loyalty in the MFP Office Copier
Market by Brand Keys for eight consecutive years. Konica Minolta, Inc. has also been named to the Dow Jones
Sustainability World Index for four years in a row. Clients trust Konica Minolta to help them envision how they can
achieve their goals and deliver innovative solutions to give shape to their ideas.
For more information, please visit: www.KonicaMinoltaECM.com and follow @KonicaMinoltaUS on Facebook,
@KM_ECM on Twitter and Konica MinoltaUS on YouTube.
Konica Minolta Business Solutions, U.S.A., Inc.
100 Williams Drive
Ramsey, NJ 07446
201 818-5712
http://kmbs.konicaminolta.us/
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The Business Case for Paperless Manufacturing
– using ECM to improve services
AIIM (www.aiim.org) is a global, non-profit organization that provides independent research, education and
certification programs to information professionals. AIIM represents the entire information management
community: practitioners, technology suppliers, integrators and consultants. AIIM runs a series of training
programs, and provides industry certification, including the Certified Information Professional.
http://www.aiim.org/Training
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