Especially when it requires achieving the perfect order.
So how can you maximize the chance of a perfect order, which, by definition, is acquired at just the right cost (which, technically means there are no savings to be had beyond what you negotiated when you signed the contract).
As per this post, for savings to materialize, the following necessary (but not sufficient) conditions have to be met:
- the order has to be placed with the contracted supplier
- with sufficient lead time
- and then shipped by the supplier on-time
- using the approved carrier and shipping arrangement
- with the required third party and government fees promptly paid
- and paperwork promptly filed
- so there are no delays and the product arrives at the warehouse on time
- where it is properly received, inventoried, and shelved
- and then the invoice is verified against the good received and the PO
- and paid at the right time when everything is okay.
This is a tall task, taller than accepting the tall tale of Jonah and the whale, but not an impossible one, and no miracles are required to make it so. Just the acquisition of the right technology, implemented in the right framework, supporting the right processes, and tailored to support your organizational talent. It will take some terrific transition management to get the right organizational alignment, but such alignment is possible, and the leaders are getting closer — especially now that we are beginning to realize Procurement 3.0.
So where do you start? Acquire the core technologies you need to streamline your supply management practices.
- a CLM solution to manage your contracts
- an e-Procurement solution that only allows orders for products on contracts from approved suppliers
- a demand planning solution (which may be part of a next-generation ERP solution) that integrates with your e-Procurement solution and notifies you when order deadlines are approaching and automatically submits auto-fill orders
- a 3PL solution that tracks shipments in real-time
- a Trade Management solution that automatically generates the required paperwork, computes the required fees, and manages, tracks, and confirms their submission
- an Inventory and Warehouse Management System that integrates with the e-Procurement Solution that manages receipt, shelving, and distribution
- an e-Procurement solution that also does invoice management and m-way matching
- an e-Payment solution that integrates with the e-Procurement solution and includes Supply Chain Finance Capabilities (including dynamic discounting, supplier financing, and pre-shipment finance, for example) to help the company determine the best payment time
It’s just the beginnings, but it’s a good start.