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When One Black Belt Is Enough

Companies turn to more economical versions of Six Sigma to hone their business processes

By Staff Writer | Updated on March 01, 2006

For years, the treasury team at American Standard Companies Inc., the $9.5 billion producer of bathroom fixtures, air conditioners and car brakes, used a pretty standard three-way matching system to pay invoices. Outgoing payments were first matched against the purchase order, then against the goods delivered to the shipping dock, and finally, against the invoice sent by the supplier. That changed when, in 2003, Marc Willensky from treasury led a team in an analysis of the payables system and found that it was causing labor redundancies, input errors, payment delays and even preventing the overworked department from taking on new business.

The inefficiency in the process, the team decided, lay in the final step, which was to issue a supplier invoice. So the solution became simple: Bypass the supplier invoice altogether. Not only has the new system reduced errors–since invoice data no longer has to be manually entered into the payables system–it has also sped up the payment cycle because the finance department doesn’t have to wait for invoices to be forwarded by various business units.

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