Hi Everyone, I am Aditya Achalkar, AVP & Team Leader at Practus

Client Intro slide – SLIDE 2

In this video, we will take you through a client situation in the Pharmaceutical industry, where the procurement team
were not able to resolve the outstanding invoices pending from long time for one of its largest site.

PROJECT CATALENT is a Global provider of delivery technologies, development, drug manufacturing, biologics, gene
therapies and consumer health products. They are preferred industry partner for personalized medicines, consumer
health brand extensions, and blockbuster drugs. They work on a B2B business model where their customers are amongst
top pharma companies of the world. The company is listed on New York Stock Exchange and generated $4 billion in
revenue in its 2021 fiscal year. The company is Headquartered in Somerset, New Jersey

Company uses QAD ERP software for its inventory management and accounting.

SLIDE 3

Client had issues with its Accounts payables since a considerably long time which was affecting the vendor relations for
entire organization with impact on reputation as well as financial impact due to cancellation of rebates, credit holds and
delivery stoppage. That’s why Practus was onboarded with Roles & Expectations highlighted in this slide:

 Very First expectation from us was to identify the bottlenecks like what loopholes are there in P2P process
which is slowing down the processing of invoices and creating such huge backlogs.
 Then we were expected to setup a defined process to study each supplier’s statement in detail and list down
the areas where each invoice is stuck which then is taken forward from there.
 After identifying areas, our role is to track that all requisites are then received, and open invoices are getting
processed in system.

Observations at all three stages were used for overall P2P optimization.

SLIDE 4

Catalent Baltimore Finance team has taken a strategic initiative for P2P process re-design & implementation and Practus
advisors were onboarded to support them with 2 primary objectives:

 First one is to “To streamline execution and clearing the backlog of Account payables”
 & Second one is “To identify areas of process improvement across the P2P process”

This was time critical since client was in midst of an ERP implementation and needed clean set of data to migrate to new
system within 5 months.

Our journey till date is represented by the timeline shown in this slide.

1. In May & June, AP Backlog clearing project initiated and key stakeholders identified
2. Between May & July, data was gathered and team requirements were planned
3. In July 1st week, Practus team onboarded onshore at Baltimore
4. In July, vendor reconciliations were done based on prioritization
5. By July end, we revamped the process for Invoice resolution through cross functional collaboration
6. In August, the new process was activated and key metrics reported weekly. In same month Practus offshore
team was onboarded
 7. Between August to December, focus was on Invoice Booking, Invoice Resolution & Payments Processing. During
this tenure almost 95% of total invoices amounting to $293.67 M were resolved, $273M invoices were booked
and payment processing was increased by 27%
8. In January, we identified additional process improvement opportunities across P2P

SLIDE 5

We did a detailed study of outstanding statements of major current suppliers to understand the key challenges client is
facing, to resolve them. Few major bottlenecks and their respective resolutions are highlighted in this slide:

1. First bottleneck was Absence of reliable data availability around open invoice count, value etc. – For this daily
reporting was required, providing details of open invoices with respect to Suppliers, Invoices, Ageing, PO, Buyers
etc.
2. Second bottleneck was Limited coordination across functions Site Finance, Buyers & Warehouse- Due to which
if an invoice is stuck with any of the function, minimal follow ups were done and it remained open for very long
time. To resolve this issue, daily calls with buyers were set prioritizing basis inputs from Global, Overdue Ageing,
Invoice Amount.
3. Third bottleneck before us was there were Multiple touchpoints which lead to lack of clarity on supplier’s part
on whom to connect for their queries and questions and absence of centralized response to them. For this we
arranged a weekly call with major suppliers and all accountable people on same platform to give more visibility
to suppliers as where the invoice is stuck and how it can be resolved.
4. Fourth bottleneck was Duplication of efforts due to teams working in silos – Since there was limited
coordination, various departments work on same issue due to which there was duplication of work. To resolve it
daily calls with material control and warehouse teams were set to resolve receiving exceptions.
5. Then there was Lack of key metrics and progress tracking periodically – For this resolution was development of
progress tracker based on data extracted from QAD providing objective status update
6. Final bottleneck was Volume of Invoice entry in QAD being lower than Invoices received resulting in backlogs
– To resolve this, a dedicated resource for Invoice entry engaged by Practus to aid Shared Service Finance team

SLIDE 6

The client was able to implement the recommendations with the help of Practus team. The benefits of the same were
reaped in the next 6-7 months in terms of increased rate of invoice processing, clearing of backlogs & positive feedbacks
from suppliers.

In next few slides, we will show you the impact delivered by our team’s efforts at Catalent :

Explaining Invoice resolved numbers

Almost $38.7 million dollar worth of invoices were open on 1st June 2022, out of which 88% of invoices worth 34.1
Million dollars were resolved.

Out of new invoices added of worth 271.53 million dollars almost 96% i.e., 259.57 million dollar worth of invoices were
resolved till 23rd January.

Slide 7

These charts shows invoice resolution in different ageing buckets

In first chart, blue bar shows invoices open on 1st June and yellow bars shows the resolved invoices.

Point 1 shows that 90% of total invoices in the ageing bucket 0 to 90 days have been resolved
Point 2 shows Invoices with ageing more than 90 days take longer to resolve due to limited information; Resolution rate
being more than 85%

In the second chart, numbers are displayed for new invoices added till 23 rd January 2023 Resolution rate of ~90% for
invoices past due for more than 30 days. Whereas it is 96% for invoices due within 30 days which indicates the
effectiveness of the process in terms of invoice resolution resulting in lower no. of overdue invoices remaining
unresolved

Slide 8
Here is the sample dashboard that was presented on weekly basis to external leadership team involving senior supply
Chain Director & Senior procurement managers.

KPIs covered:

1. Week on week open invoice resolution count & value for all materials and services.
2. Ageing of the invoices yet to be resolved bifurcated between old invoices (Aug 22 and before) & new invoice
(Sept 2022 onwards)
.

Slide 9

This chart shows the increasing rate with which the invoices were entered on weekly basis. Invoice count was increased
from 87 to 235 within four weeks from mid-December to mid-January which further went to 275 in next week

The table below chart shows the Payments ageing where the payments are compared with the due dates of the
invoices.
The payment on time matrix has improved and more than 85% of the payments are made within 15 days of the due
dates compared to ~ 40% prior to new process implementation.