'One Call Does it All' for Medical Manufacturer Respironics, Inc., Thanks to SAP and Enterprise Effectiveness
Respironics, a recognised resource in the medical device market, provides innovative products and unique programs to health care providers while helping them to grow and manage their businesses efficiently.
The company’s focus is on home and hospital care, asthma & allergy, and international markets. Respironics provides programs that manage sleep-disordered breathing, chronic obstructive pulmonary disease, asthma, infant care, heart failure and restrictive lung disorders.
Respironics has consistently maintained its market leadership role through the timely introduction of next-generation or breakthrough products.
Respironics is positioned as the largest home medical device manufacturer in the respiratory market. With production facilities located worldwide, and far-reaching sales and distribution capabilities, Respironics is thoroughly global in character. The company currently employs approximately 1800 associates
Business Issues
Before Respironics and Capgemini found one another, Respironics felt its Customer Service Department was spending too much time on non-revenue generating tasks, as well as on software application tasks that were extremely time consuming. Respironics’ vision of handling customer inquiries and orders in a one-stop approach illustrated by the slogan “One Call Does It All” was not being accomplished.
In addition, Respironics’ Credit and Collection processes did not support the business requirements, and had reached the limits of growth. The challenges that Respironics faced in the “Inquiry-to-Cash, End-to-End” process were magnified by the growth strategy of the company and expectations to increase shareholder value following acquisitions.
Respironics wanted a lean and efficient customer service that would help the company achieve it’s “One Call Does It All” goal. Gaining a holistic view on end-to-end processes would:
- improve the customer service department
- enable problem-free orders (zero errors)
- provide 48-hour customer delivery
- compress cycle time from customer acquisition and negotiation to set-up
- transform the Accounts Receivable system, providing a complete picture on financial performance
- build sales of profitable programs (products and services).
System Requirements
Respironics was running SAP® R/3® business software, and had been very successful with the ASAP™ rapid implementation.
Respironics recognised the need to drive more value out of its ERP investment, aligning SAP software with company business processes through Capgemini’s (EE) Enterprise EffectivenessSM approach.
Solution
In the Inquiry to Cash Project - Phase One (eight weeks) Scoping & Diagnostics, a joint team of Respironics and Capgemini specialists identified a number of issues and improvements that were needed. A closer analysis uncovered problems including:
- Respironics’ (CSR) Customer Service Representatives were losing valuable time
- processing inconsistencies, from order inception through delivery and billing, which ultimately delayed cash collection
- cumbersome methods of informing customers when backordered products would become available
- inefficient processes for entering prices and for reconciling the way products were listed in the field and set-up on the system.
In Phase Two, Design & Implementation (19 weeks) the Operational Excellence project focused on six work streams: four in Processes and Technology, two in Training and Organisation.
Capgemini discovered 150 opportunities for improvement by using several diagnostic tools including “A Day in the Life of a Respironics Employee,” “Brown Paper” idea generation sessions, surveys, executive interviews and data probes.
The final EE analysis was a welcome surprise: Respironics’ implementation of SAP was not the major source of the company’s problems; rather it signalled shortcomings related to improvements tied to company business processes and people-related issues.
A joint Respironics and Capgemini team:
- designed and implemented process system enhancements and recommended next steps
- designed a customer-focused Inquiry-to-Cash organisation
- educated users in the end-to-end process and system enhancements.
During Phase Three (eight weeks) of Design & Support, Capgemini focused on Key Performance Indicators - a scorecard to measure Respironics’ improvements. Capgemini taught Respironics how to continuously measure what was occurring.
A corporate scorecard on metrics was developed for Respironics to improve management and stimulate improvements A business case study proved that the project would pay for itself because of the dramatic decrease in Days of Sales Outstanding.
Capgemini also worked with Respironics on:
- an Operational Excellence project focusing on improving Respironics’ closing consolidating process
- implementing in record time SAP’s CO/PA modules
- providing next steps towards building common, global business processes, controls and systems within Respironics by migrating BPCS and Oracle ERP systems to SAP R/3 across three sites.
Benefits
Respironics was considered by Capgemini to be the “model” engagement for an EE project covering all dimensions, from strategy through system.
Respironics recovered a significant amount (nearly 60%) of the project cost over a six-month period thanks to improvements in Accounts Receivable.
CSR’s roles reflecting the end-to-end processes are now aligned with sales representatives and customers, allowing them to build stronger relationships.
“We wanted a specialist to come in and evaluate our use of the SAP system and to ensure that we were maximising its benefits by customising the system to fit our needs. That’s what Capgemini delivered.” commented Respironics’ CFO.
“After our EE project with Capgemini, internal processes improved. Reports were processed more quickly; our headquarters’ financial closing process was condensed to one day instead of five, and overall access to data was significantly improved. We’re significantly more productive and we think we’re a better company now because of it. Now we are addressing core end-to-end business processes with the goal of driving customer and shareholder value.”
Written in co-operation with Respironics, Inc.
