Document Imaging Helps Manufacturer Win The War Against Paper

When Patricia P. Upton founded Aromatique, Inc. in 1982, she created an industry. Her company enjoyed instant success as a manufacturer and distributor of decorative fragrances to high-end retail stores. By combining botanicals with fragrant oils in her kitchen, she created a fragrance for a friend to display in a local gift shop. The gift shop customers were so intrigued by the fragrance that Upton began to fill orders. As the orders poured in, Upton created new lines of decorative fragrances and continued to supply the demand she created.

In the 16 years since its founding, Aromatique has grown into the largest decorative fragrance manufacturer in the world. The company employs 550 people at its Heber Springs, AR, headquarters which has over 340,000 sq. ft. of warehouse space. Aromatique has about 7,000 active high-end retail accounts worldwide and also has a distribution site in London. 1998 gross sales are expected to exceed $100 million. In 1988, Aromatique was ranked 39th on Inc. Magazine's list of fastest growing privately-held companies in the United States and Upton was profiled on "Lifestyles of the Rich and Famous" five years later. The company processes about 1,000 invoices and 400 payment checks per day. As Aromatique has grown, so has the problem of managing the paper related to each sales transaction.

A Makeshift Filing System
Ronnie Fair, comptroller and vice president of finance at Aromatique, has been affiliated with the company since it was founded. Upton approached Fair in 1982 to do her company's bookkeeping and tax returns. "Because the company was a start-up, I didn't charge her for my services," recalls Fair. "She promised to take care of me if the company was ever successful. Seven years ago, I moved to Heber Springs from West Memphis (AR) to join the company."

Fair watched as the paper required for each sales transaction began to overtake Aromatique. At one point, the accounts receivable office had 26 file cabinets filled with past invoices and copies of payment checks. During the company's busy season, the six months prior to Christmas, employees did not even bother to file the sales paperwork in file cabinets. "We placed current files in boxes and placed the boxes on top of the file cabinets," says Fair.

Outgrowing An Antiquated System
The standard process for billing a customer at Aromatique had not changed since the company's inception. After an order was received, a computer invoice was generated and printed. The invoice was mailed to the retailer and a copy of the invoice was placed in the retailer's file. When the retailer sent a check as payment, the invoice in the file was marked "paid" and a copy of the check was stapled to the invoice.

Of course, there are certain to be some discrepancies in the sales process when a company is manually handling 1,000 transactions per day. All questions about orders and shipments are handled by 14 customer service representatives at Aromatique. At the height of the busy season, the switchboard processes an average of 800 calls per day.

"The problem with our system was obvious. We were trying to process invoices the same way we did 16 years ago. The original system was satisfactory when we had 100 accounts, but trying to manage 7,000 accounts with the same system was a nightmare," states Fair.

The Solution Which Wasn't
Trying to find a solution to control the paper Aromatique was generating with each sale, Fair researched several possibilities. One option would have been a COLD (computer output to laser disk) system. This would allow all of the billing information to be stored and viewed electronically. "We felt the cost of COLD was more than we wanted to invest," comments Fair. "We also wanted to eliminate documents that were not stored in the system."

Another technology option was to install a document imaging system. This technology would allow the company to scan and store documents as digital images. Coincidentally, at the same time Fair was considering document imaging technology, he heard a radio commercial for a VAR (value added reseller) which sold the technology. He contacted the VAR and, after a demonstration of a document imaging system, Aromatique purchased the technology.

Fair's original plan was to image all of the invoices generated by his company. To accomplish this, Aromatique purchased a VisionShape document scanner, Pioneer 18-disk jukebox, OTG jukebox management software, Microsoft SQL server and document imaging software with OCR (optical character recognition). The invoices would be fed through the scanner. The OCR software would read data on the invoice such as company identification number, date and invoice number and use this data as index information. The paper invoice would be sent to the retailer and the image of the invoice stored in the jukebox. Customer service representatives would be able to retrieve a copy of the imaged invoice and view it at their desktops. Well, this was the plan.

"We spent about $40,000 on the system and the OCR software was not reading the data on the invoice accurately and the VAR could not increase the accuracy," comments Fair.

A Second Chance For Document Imaging
While Aromatique had struggled with current system, it did not give up on document imaging technology altogether. The concept of a document imaging system was rekindled when Rhonda Keith, president of DataScan, Inc., paid a visit to her friend, Ronnie Fair. Keith's company, located in Jonesboro, AR, sells and installs document management systems. "I asked Ronnie if his company had considered document imaging. He told me, ‘Yes, we have and we have a system that isn't working,'" recalls Keith. "However, he was still interested in the technology and asked for a demonstration of what I had to offer."

Keith demonstrated a software package called File Magic Plus from Westbrook Technologies. "The software actually had all of the functionality that the previously-installed software claimed to have," states Keith. "Aromatique had already made the investment in hardware (scanner, PC, jukebox) with the previous system, so we merely integrated the File Magic software. The cost of the software integration and training on the system was under $15,000."

OCR - A Viable Option
The File Magic Plus software overcame the biggest problem encountered with the previous software - OCR accuracy rate. Currently, the system has an accuracy rate of over 90%, while the previous system was accurate about 50% of the time. For example, an Aromatique employee scans 100 invoices. That employee then instructs the system to index the documents using the information gathered through OCR. The index information appears in columnar form on the monitor. "Out of the 100 documents, there may be a couple of OCR mistakes. The mistakes are not hard to recognize and it only takes a few seconds to make any corrections," states Keith.

Once the indexing information for the scanned invoices is accurate, the images are stored on a hard drive. After enough images are stored on the hard drive to fill an entire CD (650 MB), the images are burned on to a CD and deleted off of the hard drive. The CDs which store the images are housed in a jukebox. Network users can then access the stored images.

Improving The Accuracy Of OCR
Keith increased the accuracy of OCR through two methods.

• The Aromatique invoices were made more "OCR-friendly." All of the invoice forms generated by Aromatique are identical. The data, located in different fields on the forms, changes with each invoice. For example, the OCR software reads the fields which contain customer identification number, date and invoice number. These fields usually have line boxes around them. "If the invoice goes into the scanner at a slight angle, the OCR may read part of the line box which surrounds the field," comments Keith. "Making the line box bigger puts more space between it and the data contained within it. This gives users more room for error."
• The File Magic software allows users to specify the type of information contained within a field. The previous software had difficulty distinguishing between a "2" and a "Z." File Magic software allows users to designate fields as containing only numeric information. "If the software knows a character has to be a number, then there is no confusion between reading a '2' or a 'Z'," states Fair.

Expanding Imaging Technology
Imaging invoices has been so successful for Aromatique that it recently expanded the imaging system. The company purchased a new Bell & Howell scanner which can scan both invoices and checks. "If employees need to view a customer's invoices, they key-in the customer's number and a date range. From their desktop, they can view the appropriate invoices and the checks sent as payment," says Fair.

Another department at Aromatique manages current customer status and processes applications from new retailers which want to carry Aromatique's products. "There are 15 file cabinets in that office and we don't plan on adding any more," states Fair. "We are planning to scan and image all of the documents and make the file cabinets obsolete."