The digital landscape in procurement-land is changing rapidly. The era in which we raised a limited number of purchase orders per week and managed everything via e-mail is behind us. What counts nowadays is speed, reliability and focus on anomalies. This has forced us to change the “traditional” procurement process. I will give a brief explanation below of what changes we have put through by means of automation.
We work with Robex in Steel Machinery for scheduling all production orders. The purchase orders for this are raised from SAP. By linking the two systems together, SAP now shows the correct delivery date directly for items required for a production order. This automatic link means it is no longer necessary to look in the schedule when something is needed. If the delivery date in Robex changes, the delivery date for materials is also changed automatically in SAP. Previously we did this manually, which was very liable to errors.
This tool enables purchase orders to be tracked digitally. Until recently, we used to send orders via e-mail and received the acknowledgement a couple of days later. Because we don’t know what it says, we ned to open each e-mail to see whether the right quantity at the right price and on the requested date are being acknowledged. If you issue 20,000 orders a year, it means a time-consuming job. With Tradecloud, every order is acknowledged digitally in SAP and we only see the anomalies in terms of quantity, price or delivery date going past. By responding rapidly to these, we try to keep the impact as small as possible. Meanwhile, around 80% of our orders are being processed in this way. This has resulted in considerable time saving on our and the supplier’s side, as well as a sharp improvement in the availability of materials and increased data reliability. Finally, it also reduces the likelihood of an anomalous invoice.
It is intended to implement automatic purchase invoice processing at the beginning of next year. This tool will process our suppliers’ invoices digitally. Once the order number, receipt and invoice amount have been matched, the invoice will be entered, approved and made ready for payment without anyone doing anything. The better we arrange the front end (order acknowledgement), the more invoices can be processed digitally. This saves a considerable amount of e-mail traffic, paper and time in our finance department.
At present, the finishing touches are being applied to developing this tool. This will enable us to send a link in Tradecloud along with every request or order. Clicking this link will take suppliers to a protected section of our SharePoint environment where they can download documents (e.g. drawings) relating to the request or order. This gives suppliers access to the right documents at any time.
All orders are still being processed manually in SAP. Where the situation permits later on, we intend to have these purchase orders raised in SAP itself. We are currently testing this functionality and we expect to go live in a controlled fashion at the beginning of next year. Using the tools described above, in procurement we are taking a major step into the digital landscape and achieving a huge turnaround in efficiency.