Home > Case Study > Kao Corporation

Manufacturing / Makers Business Process Outsourcing Services

Kao Corporation

Digital BPO services for multiple, small lot indirect materials procurement
Centralized various operations including quotation assessment and supplier selection into BPO center Procurement team now focus on their buyer roles, especially for high-price deals

Challenge

Build and operate a new quotation & procurement process without putting additional workloads to the Procurement department

Results

  • Integrated quotation & procurement process for 110K items from assessment, to approval, to acceptance inspection
  • Cut lead time from purchase request to approval by 20%
  • Reduced man-hours with the use of RPA

Kao Corporation Ms. Yumi Takeuchi

Ms. Yumi Takeuchi
Vice President
Procurement-Indirect Materials & Services,Global
Kao Corporation

Aiming to elevate productivity to the next level with Digital BPO that proactively adopt cutting-edge technologies

It is hard to manage an indirect material purchase process because indirect materials cover diverse product categories with small lots, and the process involves numerous transactions, meaning a one-size-fits-all approach does not work. We have kicked off this project with the aim to improve our procurement process, especially for small deals, with the use of the latest IT, and to make the procurement & payment process simple and convenient through digitalization, whilst utilizing business process outsourcing (BPO) services for the quotation & procurement process in order to boost productivity.
We first considered operating the quotation & procurement process in-house, but whilst working with transcosmos in developing a new operations process to solve our challenges, they have demonstrated to us how professionals centralize and streamline operations using their scheme, and manage quality. Through this experience, we have decided that it is best to entrust the BPO expert transcosmos with operations. We especially appreciate transcosmos for its effort in boosting productivity with their Digital BPO services that combine cutting-edge technologies like RPA and human operations. We expect transcosmos to elevate current productivity to the next level by proactively applying the latest technologies and expanding the scope of business process automation by working closely with us.

BPO services for quotation & procurement process to build a centralized indirect material procurement flow

Kao Corporation (Kao) used to let each of their factories and research laboratories across Japan purchase equipment and supplies that will be used as indirect materials separately. However, as each worksite operated their quotation & procurement process without Kao’s Procurement department’s assessment and approval, Kao could not control all these processes.
Recognizing this challenge, Kao kicked off a “cross-departmental project” with the aim to visualize costs and enhance the Procurement department’s governance over the procurement process by developing a centralized procurement system. Under this project, Kao developed an e-catalogue for regular items and introduced “Kao Mall,” a cloud-based procurement system which enables centralized procurement.
Yet, there were still nearly 110,000 items and services in a year that could not be included in the e-catalogue. Despite Kao’s effort to drive digitalization of their quotation & procurement process with the system, the company had to rely on manpower to communicate with suppliers for making requests for quotation and giving responses, to assess quotations, and approve requests for purchase. For Kao to centralize all these operations into the Procurement department, Kao had to develop a new operations process, yet Kao was hesitant to do this because it might have put additional workloads to the department members as they would have had to build and operate the new process.
In order to migrate to a new system without any disruption and to build a new process for quotation & procurement, Kao asked transcosmos to offer business process outsourcing (BPO) services for Kao’s entire quotation & procurement process on “Kao Mall,” and to setup and operate helpdesk services.

A new quotation & procurement process using RPA tools

transcosmos first visualized and standardized all the operations involved in the quotation & procurement process in order to centralize the process that were performed by each worksite separately. Closely working with Kao, transcosmos developed rules and a new process that fits well with relevant approval & acceptance inspection workflow using “Kao Mall.” Now, all processes that require massive volume of operations including “Purchase Request Acceptance,” “Quotation Assessment,” “Supplier Selection,” “Approval,” and “Request for Acceptance Inspection” are centrally performed at transcosmos BPO center. What’s more, transcosmos continued to identify operations in each process that can be automated in order to further increase productivity. In order to do so, transcosmos broke down each operation into smaller units, identified tasks that depend on manpower and the ones that are simple but time consuming, and then selected and validated relevant robotic process automation (RPA) tools that can be applied to these tasks. After this preparation, transcosmos implemented RPA to the “Purchase Request Acceptance” process to further increase efficiency. Now, transcosmos is offering stable system operations services whilst responding to changes in operational rules and performing tuning every time the system is repaired. Its services reduced the risk of human errors including misreading of procurement items and prices, and misjudgments. As a result, transcosmos successfully decreased monthly man-hours by 273 and shortened the average lead time from accepting a purchase request to approving the quotation by 20%.
In addition, transcosmos offers helpdesk services for the new system, responding to Kao user enquiries about how to use the system and suppliers’ enquiries about scheduled delivery date. Through offering customer-centric, attentive services to suppliers, not to mention Kao internal users, transcosmos prevented confusion at the system implementation phase and underpinned smooth system migration. At the end of each month, transcosmos pays special attention to comply with the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors, by taking measures that include confirming acceptance inspection status of delivered items, calling on parties that have not performed required acceptance inspection, etc.

Aiming to reduce indirect material procurement costs

transcosmos helped Kao execute their project smoothly by developing and operating the quotation & procurement process. Its services successfully reduced workloads of Kao’s Procurement department members, allowing them to focus on the implementation of the new system across Japan as well as to concentrate on their work as buyers especially on high volume items.
Through combining cutting-edge technologies and the business process outsourcing services, transcosmos continues to automate more operations that relay on manpower that cannot be systemized in order to further drive productivity.
Going forward, transcosmos will expand its scope of operations in order to collect quotations from multiple suppliers, promote procurement based on price comparison, and ultimately deliver services that contribute to cut indirect material procurement costs. With the same sense of purpose and goals as Kao’s Procurement department team, transcosmos is committed to optimize their procurement operations.

Service provided to Kao

Service provided to Kao

Return to top

For inquiries via E-mail, click here