Purchase to Pay risks are the enemy of any P2P project. Understanding them and knowing how to tackle them increases your chance of success.
Indirect procurement of goods and services can be one of the largest areas of expenditure in any company. And the operational impact that the provision of Indirect goods and services can have on a company can be significant, either positively or negatively.
Yet the lack of attention and focus that Indirect Procurement is often given is inconsistent with the true importance of this area. Indirect Procurement takes a back seat to Direct Procurement unfortunately.
But it is time for Indirect Procurement to stand up and be counted!
Procurement and Procurement Spend. Purchasing. Commodity Management. Category Management.
They are all running their own businesses within their companies, or at least they should be, whether they realize it or not.
Competition is fierce. Your company needs every advantage it can get. And needless waste from your procurement processes only eats up valuable resources and holds you back.
Without an effective and reliable supply chain, your business risks unnecessary delays. Your customers and clients will wait longer for goods and services (or they may not receive them at all). You’ll lose out on valuable discounts. And you could end up damaging vendor relationships you need to stay competitive.
Luckily, you can drastically reduce procurement inefficiencies easily by following best practices. Here’s what you need to do to make that happen.
Step 1 is to get good spend visibility and understand what you are buying and how much you are spending across all your spend categories. Without visibility of spend you cannot progress. Many companies have limited or no visibility of spend that is equivalent to 20% of their revenues in value.
Difficulties with buying within your organization are often associated with the use of inappropriate user-facing technology. Fundamentally it is because there is no Buyer Portal. There is a “purchasing system” and a “process”, however, there is no user-centric access to this. This is what a Buyer Portal provides – it is the user-friendly way of presenting a buying process.
As the world approaches what will likely be an unprecedented recession, businesses are talking about “innovating out of the crisis” by working more closely with their suppliers. But what does innovation mean in this crisis and what should it achieve?
Currently, China is the world’s largest exporter of goods. Official estimates say Chinese exports amount more than $2 trillion, making the country the largest trading nation on Earth.
But with China’s economy running at just 40% capacity amid Coronavirus lockdown, the effects on the global supply chain industry are devastating. Not only for the country’s economy but to everyone else who depends on Chinese goods.
It is fair to say that Covid-19 has disrupted businesses and economies in a way, unlike any other global event. Although it is humbling to see communities changing their behaviors in the face of the pandemic to help save lives, it is equally sobering to witness the speed at which certain industries have been crumbling in the face of the sudden drop in demand for their goods or services.