The computerization of business processes by way of digitization is always meant to aid management to improve productivity, quality and consistency, leading to a greatly improved performance.
Increased Profits through Procurement?
Procurement as a function is very human-centric and needs long drawn efforts in getting the right material, within the right time, at the right prices and in right quality, sourced from the right vendor, each time. Deviation in any of these counts may lead to losses beyond recovery and volume of losses could be large enough to ruin the profits earned during several past months of the year. On the other hand, a Digitized Procurement function is not only ultra-efficient, it also increases profits by reducing costs. Needless to say therefore, digitization of the procurement process definitely results in much faster Returns on Investment (RoI).
Challenges encountered during the procurement process are various – and the most impacting ones are addressed here.
Procurement demands execution with clock-work precision
The Procurement Process involves various component tasks like Purchase Requisition, Scrutiny and Approval, Floating of RFQ, Receipt and Collation of Responses, Quote Comparison, Technical Approval, Identification of Qualifying Vendor, Awarding of Purchase Order, Follow through of Order Fulfilment. Every step in the process should work like a machine such that the material arrives within stipulated time. A delay in any of the stages mentioned above will create huge idle time of Man, Machine and Money in the absence of Material, resulting into heavy losses. The TeckSRM Procurement Solution Suite dynamically integrated with Alerts and an Approval Workflow system aids to ensure every action required to accomplish the procurement is taken on time.
Delay in offloading Material results in demurrage charges
As important as PR Processing is, it is equally important to follow through aspects that start with Material Dispatch from the Vendor: aspects such as ASN, GRN, Invoicing and Payment. At times in absence of a system like TeckSRM, the Vendor sends the Advance shipment notice via email or other conventional modes of communication to the Buyer expecting that appropriate arrangements to off load the material immediately on arrival will be made. In the absence of any single-source mechanism of alerts or dashboards, such communication at times go unnoticed and result in demurrage charges and production schedules go haywire. This becomes more critical in case of Import consignments, where the stakes are much higher.
Technical and Commercial evaluation of the Material
Key items like raw material, instruments, machines, quality testing reagents, etc need very minute conformity to specifications, intricate design and precise use cases: both for samples for supplier qualification as well as quality testing for acceptance of supplies received. Hence there is always a to-and-fro communication flow between the vendor and the user department and this is generally co-ordinated through the procurement team. Crispier more the merrier. This important set of interactions documented into a system like TeckSRM ensure the right material delivered and avoids all subsequent possibilities of conflict. It also helps in the material approval process where lab-testing and evaluation is taken up before finally approving the purchase order or preparing the GRN.
Inter-communication with External and Internal Stake Holders
Communicating through emails does not help keep track of relationships to a case at a central point, resulting in precious time being lost in searching previous communication case references. TeckSRM provides an internal communication platform in the form of a Vendor Management Portal, which provides a very convenient mode of communicating with vendors and internal stakeholders with integrated references to supply cases. As a buyer, one is expected to work on the basis of requests and responses. The system records all such internal communication case-wise, effectively freeing them up from the monotonous work and affords focus on more fruitful work in the procurement space. The in-system documentation has audit trails to trace and record all communications in case of discrepancies or disputes.
Negotiations with Prospective Vendor
Personal negotiations with vendors is a very cumbersome and time-consuming process. This process often takes longer than expected and results in delays. Due to manual intervention in negotiation process, the vendor could resort to supplying sub-standard material which increases rejection rates and further bout of delays. To avoid this entirely, TeckSRM provides an easy-to-use Auction platform which makes the negotiation process easy, impersonal, time bound and predictable – eliminating delays.
Management of Vendor Ratings
It is always challenging to keep track of delivery standards as per the quality parameters, rejection ratio of material in a specific number of cases, vendor response, engagement quality, etc. If at all maintained, any conventional method of vendor rating computation and maintenance becomes a full-blown activity right from timely accumulation of data from various discrete systems to preparation of meaningful vendor rating charts. Even so, it stops short of being available in real time, it is always point in time with a recency. A solution like TeckSRM comes handy with its user-friendly dashboards with continuous evaluation and rating systems helping buyers to have up-to-date information every time a new order is processed.
The main objectives for a vendor audit are to periodically assess and re-determine the quality management of the whole supplier organization, through its practices, procedures and data processes. It is an assessment of quality control measures taken by the vendor to assure that their products and services are consistently predictable and acceptable for consuming organization. TeckSRM’s conformity with ISO and CAPA makes compliance matters easier to conduct audits, fill out observations, share feedback and corrective measures and ensure the corrective and preventive actions suggested are implemented by vendor in right spirit within the allowable timeframes with scheduling, monitoring and follow-ups.
TeckSRM: As complete as can be
So TeckSRM is a holistic, optimized supplier management and procurement process that helps organizations simplify and automate the procurement process. It minimizes manual intervention by creating a platform that both buyers and suppliers can use through the lifecycle of the procurement process and beyond. It is versatile enough to function independently, but flexible enough to be integrated with any ERP solution you use.
Not only are Procurement’s most impacting challenges effectively overcome by the feature-rich TeckSRM – Smart Sourcing Suite and Vendor Portal from Teckraft, it also improves your profit greatly by reducing costs effectively: case by case, day after day.
Watch out for more articles from us, on solutions available to digitize your Procurement in the most economical and efficient manner.
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