Komatsu Australia achieves end-to-end automation with Power Automate

Komatsu Australia is the Australian subsidiary of Komatsu, an industry-leading manufacturer of construction, forestry, and mining equipment. When the parts department at Komatsu Australia struggled to manually process nearly 52,000 invoices annually, it used Power Automate and AI Builder to automate its invoice processing workflow. The solution was developed in just three weeks, saving over 300 labor-intensive manual entry hours for a single supplier alone. Because of this success, Komatsu Australia also launched their own citizen developer program, to inspire and empower employees to build their own business solutions. The program, which has begun with its first cohort since the pilot, is helping divisions and departments across Komatsu to innovate quickly and to streamline processes and improve efficiency through automation and digitisation.

“Citizen development creates opportunities for the business to be able to solve their own business problems and challenges.”

Eric Cheng, Digital Solutions Architect, Komatsu Australia

Automating for increased efficiency

In 1917, Meitaro Takeuchi founded the Komatsu Iron Works to develop machinery for mining operations, which became Komatsu Ltd. in 1921. Over the last century, the company has grown to become a worldwide manufacturer of forestry, mining, and construction equipment. Komatsu Australia is the Australian subsidiary of the corporation. As part of its normal business operation, Komatsu Australia source their parts from over 250 global OEMs and local suppliers and receives hundreds of invoices per day. The invoices are usually sent as PDFs to a shared Microsoft Outlook inbox monitored by the parts department, which consists of three people. Receiving over 1,100 invoices from a single supplier alone left the small parts department scrambling to stay on top of the invoice influx, as well as perform the manual process of entering the invoices into its system.

Each invoice had to be read by one of the three team members, entered by hand into Excel, validated against purchase orders using Excel spreadsheets, uploaded to a web portal, and entered again (manually) into a mainframe system to add in any taxes and charges.

Delays in the invoicing fixing process may also result in issues downstream including issues during goods receipting and delays in the picking and shipping of parts to our customers. Every inefficiency in the chain ripples along the entire workflow, slowing down processes across the company’s operations. “We needed to modernize our invoicing process, and automation was part of the answer,” says Eric Cheng, Digital Solutions Architect at Komatsu Australia.

Saving hundreds of hours of work

Using Microsoft Power Automate and AI Builder, Komatsu Australia automated its invoicing process end-to-end from examining incoming invoices from their suppliers. The new invoicing process uses two types of automated “flows” within Power Automate: cloud flows and desktop flows. Cloud flows use digital process automation (DPA) to connect with APIs, and desktop flows use RPA to do UI automation (for those without APIs). The company built, trained, and published a document processing AI model using AI Builder that was key for the full automation of invoice processing. The team used a sample size of 10 invoices to train the model with a 99 percent accuracy score (see Figure 1).

Figure 1: A custom AI Builder model analyzes and extracts data from the PDF invoices received by Komatsu Australia and a Power Automate cloud flow saves the extracted data into a SQL database which then executes corresponding desktop flows.

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By using robotic process automation (RPA) capabilities, the solution is interoperable with the company’s legacy IBM AS400 mainframe system, which has no API layer available for integration, meaning direct access to the database is otherwise impossible. Power Automate is part of the Microsoft Power Platform, which works seamlessly across the Azure ecosystem and connects to other solutions like Azure Synapse, Azure SQL Database, and Microsoft Teams.

The solution works as follows (see Figure 2):

The scheduled cloud flow examines incoming emails on a shared Outlook mailbox and downloads those that meet the format of PDF invoices.
The cloud flow sends the PDF files to the AI Builder document processing model.
The results from the AI Builder document processing model are saved into a SQL database.
The cloud flow verifies invoice data (supplier number, purchase order line-item numbers, part numbers, etc.) against purchase order details in an Azure Synapse data lake
The cloud flow triggers a desktop flow to store all pertinent data in a CSV file which is loaded into the IBM AS400 mainframe system.
A second desktop flow processes the invoices, including additional data like freight, tax, and assorted charges, into the IBM AS400 mainframe system.
Processed invoices are achieved into a separate table in the SQL database for audit history so it can be referenced for future audits.

Figure 2: Automation of the invoicing fixing process with Power Automate.

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By automating the process for just this one supplier, Komatsu Australia processed 1,100 invoices in just three weeks and the company estimates it has already saved the parts department 300 hours of work per year. The process has now provided Komatsu Australia with a blueprint to automate the remaining suppliers, which should see the hours saved increase dramatically in the coming months. Cheng describes the situation as being exceptionally straightforward and useful. “We went from having literally nothing in that space to purchasing the licensing, setting up everything, building the processes—all of that in three weeks.”

Cheng highlights the idea that with Power Automate and the company’s own Microsoft Sharepoint site, it’s possible for teams to adapt the framework to each individual client and supplier’s needs without rebuilding the entire solution from scratch. The team is already hard at work onboarding more clients for further improvement and rolling their new solution out to more suppliers.

Empowering citizen developers to innovate

At the simplest level, it’s easy to see how invoices being automatically converted to a standard format saves time. But working in an industrial field means that every step links together. Komatsu Australia can use Power Automate to expand and cover other sections of the business within Australia, and even reach beyond the region to help transform Komatsu’s overall operations.

“With the global economy as it is, there’s more and more pressure to do more with less,” says Cheng. ”Even just having one department automate a client process with Power Automate has provided an efficiency gain, freeing employees to do more important work that requires greater attention.” Power Automate also offers Komatsu Australia a scalable solution that doesn’t require elaborate reworking to be applicable.

To help other departments and divisions benefit from digitisation and automation, Komatsu Australia launched its own citizen developer program. This new initiative brings together team members across the division without prior programming experience to design new tools and develop solutions. Citizen developers use a Teams channel and regular ‘office hours’ to ask questions and share news, and the company is currently building a Power Virtual Agents chatbot using OpenAI to help further with technical questions.

Cheng is excited about the potential return on investment and improvements to the overall business. “There are going to be solutions where departments don’t need IT to be involved all the way,” says Cheng. “So, it’s about creating opportunities for the business to be able to solve their own business problems and challenges.”

Employee-built apps are already being rolled out. There’s one to scan and identify equipment attachments, and another to quickly change the destinations for new equipment to simplify short turnarounds. Citizen developers are currently creating a solution with AI Builder—now the go-to AI document processing product for Komatsu—that will save 4,675 hours on 187,000 purchase orders (20 percent of customers). Cheng sees employees who volunteered early on as an encouraging sign, showing that people are eager to make the best use of the technology available to pioneer improvements to processes. “We have seen the early successes as a catalyst for other pockets of the business to become involved,” says Cheng.

"Working with Microsoft is part of the strength of this solution as it rolls out new features on a continual basis,” says Cheng. “This helps build confidence that we can continue being a leader in the space and develop new and exciting innovations, and it gives Komatsu Australia new capabilities for the same investment.” This includes tools like chatbots for the citizen developer program that can quickly answer questions from employees, further saving time for the IT team.

Using Microsoft Power Platform and the citizen developer program ensures small problems get solved quickly and don’t ripple down the chain—allowing IT and other teams to focus on what they do best.

Starting local, building global

Even though Power Automate is still being rolled out in Australia, Cheng is already speaking with his counterparts across the world about the benefits of automation and citizen development. The AI technology used with Power Automate is a good fit for any situation where the company needs to automate processes to save redundant employee effort, maximizing productivity.

Cheng also recognizes the need for a human touch. “It’s allowed us to optimize the way we work,” he says. “The team is now able to focus on high-value tasks.” Making better use of employee time and effort ensures that the same workforce can accomplish more and make the best use of its time in an ever-moving environment.

All of this is new technology and is just beginning, says Cheng, but he is already looking at calculating the time saved as the team onboards more clients and as the process simply runs quietly in the background. “They can continue building new solutions,” he says, “as opposed to continually firefighting and fixing existing processes.”

Find out more about Komatsu Australia on Twitter, Facebook, and LinkedIn.

“We went from having literally nothing in that space to purchasing the Microsoft licensing, setting up everything, building the processes—all of that in three weeks.”

Eric Cheng, Digital Solutions Architect, Komatsu Australia