Implementing Order Processing Automation: A Case Study of Lam Research and Esker

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When Lam Research, a U.S. maker of semiconductor equipment, began implementing Esker’s order processing automation technology, in early 2016, the decision had already been a while in the making.

Founded in 1980 and headquartered in Fremont, California, Lam Research counts Samsung, Intel and IBM among its customers. The past decade has been one of impressive growth for the company, whose revenue expanded from $2.1 billion in 2010 to around $9.6 billion in 2017.

But as the company grew, so too had its workforce. Before Lam Research implemented Esker, it had around 70 customer service representatives throughout the U.S., Europe and Asia. Today the company has around 10,200 employees.

Selecting a Vendor

Dawn Uyeda, previously the senior manager of global spares customer service at Lam Research and currently the director of business operations, sought a way to reduce the cost of sales and to increase business without expanding the customer service department. This is where automation — and eventually Esker — came in.

Esker, a provider of cloud-based document processing automation technology, has been around since 1985. Headquartered in Lyon, France, Esker boasts 11,000 customers worldwide. All of Esker’s solutions are integrated with SAP, and it was at an SAP conference that Uyeda came to learn about the provider.

Uyeda found that Esker is similarly partnership-oriented as Lam Research, a sentiment echoed by Steve Smith, chief operating officer of Esker’s North and Latin American divisions.

“Lam approached the relationship with Esker as a true partnership, knowing that there would be bumps along the road and the key was to communicate openly about them and work together to find ways around any hurdles,” Smith says.

For Uyeda, it was crucial that the experience be seamless for Lam’s customers. “They shouldn’t have to know whether an order was processed through Esker or processed manually through SAP,” she says.

However, Lam Research did not automate immediately. “[Uyeda] was a proponent of [implementing automation software] for quite a while, but it took a while to get our organization to a space where we can look at it,” says Candie Stroope, spares operations manager at Lam Research. “Eventually in 2015, they took another look at it and decided they were going to go forward with that.”

In choosing a vendor, it came down to cloud-based software that offered strong language capability.

“We are in seven different regions and very heavy in Asia-Pacific,” Stroope explains. “So we needed language capability. That was a real big piece of it.”

Managing Headcount, Reducing Errors

The project began in January 2016. After Lam Research had finished implementing Esker’s customized solution in all of its regions in December of the same year, the company’s goals were threefold. It wanted to manage its customer service representative headcount, improve efficiency and reduce the error rate.

The reduction in error rate was seen immediately. “When you have the customer service representative entering by hand, they enter in the wrong ship keys. They enter in wrong part numbers or quantities,” says Stroope. “It’s very easy for human error, and this has been eliminated.”

Stroope estimates that Lam’s customer service team processes around 60,000 purchase order lines a month. The rate of error when the POs were processed manually was around 1%-2%. Thanks to automation, the rate of error is now close to zero.

Order processing automation has also brought about greater efficiency. Lam’s average order entry time went from nine minutes for manually inputting an order into SAP — not to mention requiring seven SAP screens to do so — to a two-minute processing time with Esker, involving a single screen.

Meanwhile, Lam Research’s business was growing by leaps and bounds. To keep up, the company added around 30 customer service representatives. “Our outbound business tripled,” Stroope says. “[But] we didn’t triple our headcount to support it.”

Smith credits Lam Research’s successful implementation to the company’s mature process improvement and project methodologies.

“They already had a strong culture of improvement, and the project team assigned to the Esker implementation was well versed in both best implementation practices and the Lam business,” Smith says. “They included user representation across all of the geographic business units globally so that the solution was not geared to just one or two regions.”

Challenges and Recommendations

Smith cites strong participation by key stakeholders and involvement throughout the process by end-users as crucial factors for a successful implementation of order processing automation. It is also important for the organization to have a good set of change management principles in place. Users should be provided with continuous training, preferably with some one-on-one in-person time.

A challenge that often arises has to do with the IT-driven implementation, Smith says. “It’s important for IT to include the business as partners in the process and engage them throughout the process, including prior to selection of the automation vendor.”

Continuing with the process improvements after implementation is another big challenge. “Post-implementation investment in self-evaluation and continuous improvement is critical to achieving the kind of productivity and efficiency you want to become a leader in your industry,” Smith says.

If your company is thinking about implementing order processing automation, make sure to get the users involved in the early stage, as they are the ones who know what they need in order to be most productive. This way, user feedback can be factored in early in the process to create the best-fit customizations.

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Voices (13)

  1. Donna Harvey:

    I was not aware how long Esker has been in existence. Very excited to be using this to automate our system.

  2. Titia:

    One of the things I loved about working with ESKER was their cooperation with us to include the business users in the process. This was so helpful in the implementation and adoption of our ESKER project!

  3. Kelli Liebe:

    Always interesting to read about others implementations!

  4. Ginger Luster:

    Great Story! Very interesting and informative

  5. Dee:

    Interesting article and it’s amazing how much the company has grown.

  6. Teresa Talucci:

    excited for the day when esker has “learned” to read our customer’s POs and we can be fully automated.

  7. Chris M.:

    Very nice to see how the implementation of the Esker can reduce the errors to almost nothing!

  8. Linda Foley:

    I didn’t realize Esker had been around so long 🙂

  9. Jennifer:

    Interesting article and how it all started.

  10. Jana Sherlock:

    Great story.

  11. Kara C:

    Very interesting and informative! I am interested to know more about what qualifies as best implementation practices as I was part of a team that recently completed an AP automation project.

  12. Josh Dixon:

    Great article

  13. Lisa:

    What a great success story aided by a one-stop shop with automation and even across different languages.

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