The client
An industrial manufacturer with 12 plants in 4 countries and about $1.7B a year of materials spend, owned by a private equity firm. It makes parts for heavy equipment and farm machinery makers. It runs SAP at every plant and works in Microsoft Teams.
The engagement
The chief financial officer and the head of procurement sponsored one engagement, because both teams work a blocked invoice. The buyer owns the price, accounts payable owns the payment, and the plant controller books whatever is still open at month end. Five workflows were in scope:
- Invoice match exceptions: about 39,000 a year, 19% of 205,000 supplier invoices.
- Supplier price changes: 9,600 a year, mostly steel and resin surcharges.
- New supplier setup: 460 a year, each signed off by 5 teams.
- Payment holds and duplicate checks: on about $2.3B of supplier payments a year.
- Month-end close: about 14,000 open lines of goods received but not yet invoiced, across all 12 plants.
What the pilot found
Four forward-deployed engineers ran a 4-week pilot across 3 plants and the shared services center. They studied 2 years of orders, receipts, invoices, and payments in SAP, and read the policies and supply contracts. They also interviewed 38 people.
- Each team thought the other owned the exception. 58% of exceptions needed a buyer to act, but the invoice sat in the accounts payable queue. The typical exception waited 9 days for the buyer, and plant controllers spent 3 days of every close sorting out the rest by hand.
- Price increases were agreed but not entered. Buyers agreed increases by email, and SAP typically kept the old price for 19 days. 27% of all exceptions came from that delay.
- Duplicates slipped past SAP, because it caught only exact matches. An invoice sent once by EDI and again as a PDF with a different reference was paid twice. Payments made twice or above the agreed price came to $6.6M a year.
An exception passed through 4 people over 13 days and cost $68 of their time. Accounts payable counted only its own $21.
The redesign
Invoice match exceptions were the focus. The process now runs on 5 agents with 2 decisions left to people. Simple mismatches, such as a different unit of measure or a late receipt, resolve before an invoice is ever blocked. A price change reaches SAP the day the buyer approves it, once the agent checks it against the contract. When a real difference remains, the agent sends it to the person who must act, with the figures worked out. Tolerances and approval limits did not change.
Before14 steps, 4 owners
13 days
After6 steps, 2 human decisions
2 days
- Manual step
- Agent step
- Person decides
Process steps
- Before
- 14
- After
- 6
- Change
- 57% fewer
Time to clear an exception
- Before
- 13 days
- After
- 2 days
- Change
- 85% shorter
People who touch an exception
- Before
- 4
- After
- 2
- Change
- 50% fewer
Cleared with no correction
- Before
- 9%
- After
- 72%
- Change
- +63 pts
Early-payment discounts taken
- Before
- 64%
- After
- 92%
- Change
- +28 pts
Cost per exception
- Before
- $68
- After
- $26
- Change
- 62% lower
| Before | After | Change | |
|---|---|---|---|
| Process steps | 14 | 6 | 57% fewer |
| Time to clear an exception | 13 days | 2 days | 85% shorter |
| People who touch an exception | 4 | 2 | 50% fewer |
| Cleared with no correction | 9% | 72% | +63 pts |
| Early-payment discounts taken | 64% | 92% | +28 pts |
| Cost per exception | $68 | $26 | 62% lower |
4 weeks of discovery, then 4 weeks of deployment
- Weeks 1 to 4, discovery: the pilot above maps the process, interviews the team, and sets the baseline for every figure on this page.
- Week 5, build: the agents are built on the redesigned process, the manufacturer's SAP, and its supply contracts.
- Week 6, shadow: the agents work live blocked invoices and price changes with read-only access, and their answers are compared with the team's.
- Week 7, validate: the agents are tested on 6 months of past exceptions, and accounts payable, 2 category managers, and the plant controllers sign off.
- Week 8, deploy: live at all 12 plants, with every action logged.
- From week 8, train: the engineers stay on site to train buyers, payables staff, and controllers. Supplier setup, payment holds, and the month-end close follow, 4 weeks each.
What the agent does
- When a supplier invoice is blocked because its price does not match the purchase order, the agent finds out why.
- It reads the buyer's emails, the supply agreement, and any market index the price is tied to.
- It works out the price the contract allows and asks the buyer to approve it in Teams.
- Once the buyer approves, the agent fixes the open purchase orders so the next invoices match, and accounts payable releases the invoice.
Results
New supplier setup takes 15 days instead of 41, because the agent chases each sign-off. Approved price changes reach SAP the same day, instead of 19 days later. Goods received but not invoiced for more than 90 days fell from $14.8M to $3.1M, and the controllers' close work from 3 days to 1. Every figure is measured against the pilot baseline.
| Source | Annual value | How |
|---|---|---|
| Capacity released | $4.5M | 72,600 hours at $62 fully loaded, 26,400 of them in match exceptions |
| Overpayments stopped | $5.0M | Payments made twice or above the agreed price, down from $6.6M to $1.6M a year |
| Price increases held to contract | $1.6M | 9,600 supplier price changes a year checked against their index or surcharge clause, 0.9% off $178M of re-priced spend |
| Early-payment discounts | $1.5M | 28 more points of the $260M a year invoiced on 2% 10-day terms, at 2% |
| Total | $12.6M | Against the $38.8M a year it costs to run the workflows in scope: about 250 buyers, supplier quality, payables, and cost accounting staff at $62, plus $6.6M paid twice or above the agreed price |
What stays with people
Agents work out the numbers, and buyers, controllers, and payables staff decide. Choosing suppliers, approving a new supplier, releasing payment, every short-pay, every price or contract change, and supplier disputes stay with named people. Every agent action records the contract clause it used, the documents it read, and the approval. A wrong posting is reversed in SAP, linked to the original.
