Reference no: EM131847684

Saving Costs at Costco For Costco Wholesale to provide quality, brand-name merchandise at substantially lower prices, it must communicate quickly and effectively with thousands of vendors.

The company cannot afford slow response times when accessing purchase orders, debit memos, or invoices; unsatisfactory image quality; or indirect access to transaction documents. Costco began the search for a technology that could handle its growing volume of paper, microfilm, and microfiche. The company processes 30,000 documents per day and has more than 75 million documents scanned in total.

Costco chose Stellent Imaging and Business Process Management because of its open architecture, competitive price, and multiple features, which provided a rapid return on investment. Costco worked with ImageSource, Inc., a Stellent solution provider, on design and implementation. With Stellent, Costco processes about 6.7 million documents per year. Imaged documents can be accessed in seconds.

Costco also gained easy storage and quick retrieval of information and integration of workflow processes with computer data. Faster payment processing and easier transaction storage and retrieval improved service to warehouse, depot, and vendor customers. Faster document retrieval times and quicker problem resolution led to increased vendor satisfaction. Costco recouped the cost of the Stellent solution in just 11 months of operation and saved $7 million in labor and payment term discounts. Today, 750 of Costco's 2,000 corporate office employees use the Stellent system including: The accounts payable group accesses invoices related to expense and merchandise functions.

The accounting department scans and stores capital expenditure and fixed asset documents, which can be accessed by the facilities department. Costco's legal department uses Stellent to process and store vendor maintenance and setup agreements and other documents. The tax department improved its audit process now that it can randomly review a sampling of historical transaction documents. Regional offices can also quickly access vendor invoices and rebate documents via a Web browser.

Questions

1. Identify content management and document management and explain how Costco is using them to improve business operations.

2. Provide an example of a few of the documents that Costco must maintain electronically.

3. How might other Costco departments benefit from a document management system?

4. The Stellent Imaging and Business Process Management solution allowed Costco to grow as a company without increasing expenses. Identify another business that could benefit from the Stellent Imaging and Business Process Management solution.