Procure to Pay
Procure-to-Pay covers sourcing through paying suppliers. Buying only the required materials at an acceptable quality and achieving on time delivery at a good price are the goals.
Improve cash flow: Demand visibility helps ensure timely purchase of required materials to keep operations flowing smoothly. Vendor managed inventory can help ensure the company pays only for materials used. Reducing scrap and rework cuts costs, while vendor performance reporting helps improve quality and delivery performance.
Reduce inventory: Having the right materials on hand when needed to complete a job helps reduce inventory in queue at work centers, increasing throughput and operational efficiency.
Source strategically: Monitoring supplier performance helps ensure that suppliers offer the best possible mix of price, quality and delivery to minimize supply chain disruptions, while maintaining cost controls and margins.
Eliminate non-value-add processes: Adopting methods like vendor managed inventory and evaluated receipts settlement helps enable users to focus on more strategic activities while keeping costs low.
Capitalize on supplier knowledge to improve processes and designs: Suppliers know their own processes better than anyone else knows them. Often, they can provide key design tips or ordering suggestions that reduce overall costs and may improve quality.
Make quality a key performance metric: Don’t inject quality inspection into the process; make it a key selection criterion and work with suppliers on continuous improvement and performance metrics.