5 minute read • published in partnership with K3 Syspro
Insight: The transformative powers of digital procurement to boost supply chain resilience
One of the key lessons of the past few months has been the danger of poor procurement strategies. Those businesses that have managed to adapt and pivot have needed robust procurement processes and the agility required for effective supply chain management. K3 Syspro looks at how systems have been put to the ultimate test and how those manufacturers and distributors who have embraced ERP and the digital agenda have reaped the rewards of having business-critical data available at the touch of a button.
Procurement should sit at the heart of any sustainable business strategy. It is critical in making organisations more profitable, efficient and robust. Through sourcing diversification, effective supply chain management, cashflow and cost control, procurement strategies can offer a competitive advantage in any trading climate.
Procurement managers throughout Britain have taken the helm helping their business navigate global supply chain disruption and pivoting to exploit new avenues of production, from ventilators to PPE. Be it Covid-19, Brexit, or global trade wars, uncertainty is the new normal and business must respond with a new toolkit.
Ensuring all things are in the right place at the right time and of the right standard and cost is no easy task at the best of times, let alone amidst a global pandemic. Making quick changes becomes almost impossible if your processes are paper driven and disparate software systems are incompatible.
Powers of ERP
Using a centralised ERP system which automates tasks, streamlines operations and provides invaluable insight into every aspect of the business allows procurement departments to operate on a whole new level. Be it managing inventory levels, keeping on top of purchasing requests, or tendering for new suppliers, access to accurate real-time information opens up infinite possibilities.
Unlike a standalone procurement program, SYSPRO ERP offers seamless integration into all company and supplier chain systems. It provides a 360-degree view of resources and assets throughout your entire supply chain, with tools that allow you to make timely shifts and adaptations.
Cost remains critical, yet too many businesses sacrifice supply chain resilience for the sake of cost-cutting. By setting up and managing procurement strategies and policies, effective ERP systems mitigates purchasing risks, improve governance and maintain negotiated agreements – while enabling the purchasing at the best value-to-price ratio.
By automating procurement processes within a centralised system, information can flow between a business, its customers and suppliers, providing end-to-end visibility, boosting productivity and improving customer service.
The management of sourcing strategies and policies helps mitigate risk, improve governance and maintain negotiated agreements across the supply chain. Meanwhile, the use of technologies like online portals, IoT, AI and Bots, provides the insight and collaboration to instantly react to the unexpected.
Having digital agility across the procurement process allows businesses to exploit new markets and opportunities. They can quickly shift suppliers, introduce new production lines and pivot in response to shifting demands. Technology is key to minimising response time and building resilience across the organisation.
Key to adopting more agile procurement strategies is gaining a real-time view of stock availability and material requirements. SYSPRO’s Inventory Management provides real-time reporting. The solution allows the procurement team to accurately forecast demand, identify stock availability, establish supplier lead times, cost and material requirements, contingency stock requirements, and warehouse capacity constraints.
Automated inventory optimisation, forecasting and tracking avoids interruptions due to materials shortages, alerts you when items need reordering and manages costs by ensuring you only hold the material you require. That same automation allows businesses to manage Material Requirements Planning, ensuring the correct materials area available to bring a new product to market.
Yet effective digital procurement must reach beyond your own factory walls and connect the entire supply chain. In a trading environment where lead times are constantly changing, distribution is disrupted and it’s necessary to diversify suppliers, you need visibility and free flow of data between all business partners.
You require an ERP system with built-in procurement solutions which makes strategic supplier management more resilient and responsive. They automate the entire planning, procurement and supply chain management process. That real-time insight allows businesses to control costs, identify where they need to find alternative suppliers and build resilience whilst controlling governance, compliance and value for money.
Sourcing new suppliers
Agile procurement in a fast-changing global market demands relationships with a bigger pool of suppliers to better manage risk and ensure businesses can respond to new opportunities. A centralised ERP system automates invites to tender and the process of supplier selection before generating purchase orders.
By using a supply chain portal, procurement professionals can take charge of requisitions approval, collaborate on a delivery schedule and manage workflows. With full visibility of granular data, users can monitor supplier performance and ensure decisions are quicker and better informed.
Southampton-based manufacturer Millbrook Beds has used its SYSPRO to create an effective and efficient digital ecosystem. In September 2019, the business launched its new Fast Track service, which guarantees delivery of certain products directly to the consumer’s door within 48 hours. This was made possible by SYSPRO MRP dictating procurement requirements and when to efficiently replenish stock.
Millbrook’s Commercial Director, Andrew Longland, said: “We finally had an agile system for an agile business. Having everything integrated into one system is utopia. People are no longer constantly transferring data, and everyone is looking at live data”
Similarly, food supplier Fiddes Payne has used the SYSPRO system to eliminate the need to manually order stock and reduce overheads.
Financial Controller at Fiddes Payne, Hazel Barton, added: “The new ERP system is already bringing in much greater levels of visibility and stock control, which has improved our procurement operation. For our customers, it will enhance our service levels and overall satisfaction with more accurate and timely billing”
Procurement professionals have more to gain than ever in exploiting digitalisation and leveraging the powers of ERP. The agility and resilience embedded within a centralised system allows decision makers to respond to whatever the market throws their way. End-to-end supply chain visibility drives efficiencies, boosts productivity and ensures businesses to stay one step ahead of the competition.