In an increasingly integrated supply chain, collaboration, intended as a sharing of information and processes between cooperating partners within the same product/service chain, is the must have condition for the achievement of objectives and best performing of the supply process, in terms of efficiency, quality and cost reduction.
The supplier collaboration is just like that: a further step compared to the classic customer-supplier relationship that turns into an advanced partnership.
Together with Stefano Lubian, Head of Procurement Solutions Synertrade Italia, we addressed this issue, analysing the collaboration topic in the P2P (Procure to Pay) area and highlighting its inherent ( deeper?) value, often not immediate and easy to apply.
How supplier collaboration is defined and implemented?
Supplier collaboration is a journey that starts from the definition of the domain in which the collaborative relationship takes place, which typically focuses on the most critical processes and product categories for the business – hardly impacting on the core business – and the production process.
Once the main supplier companies and referents have been identified, the next step is to outline the information kit, the key points of the supply process to be controlled and the monitoring methods. The advantages of this collaboration – efficiency, quality, cost reduction – are well known, however, it is still difficult to apply it in practice for two main reasons
On the one hand, the evolution that the purchasing department has experienced only in recent years, from “order making office” to a valuable and strategic function aligned with company decisions, and on the other hand the lack of suitable tools to encourage integrated supplier collaboration. We experencied some Vendor Management Integrations, often adopted by companies that could afford costly investments in terms of implementation and maintenance. These solutions were typically not very scalable and difficult to extend to a wide range of suppliers.
These conditions are rapidly evolving and today, thanks to the introduction of cloud solutions such as Synertrade’s Accelerate, we are able to easily achieve the benefits of supplier collaboration, not to mention the recent situation we have been experiencing worldwide, that certainly encouraged and accelerated the search for tools enabling a stronger and advanced partnership.
How does Synertrade concretely react to supplier collaboration P2P? Can you give us some examples?
Synertrade supports its customers as main technology partner, providing tools to enable collaborative flows between customer and supplier, especially in the areas that most require integration between the parties: order management, planning and advanced delivery management, invoicing, product development.
Since Accelerate platform supports all procurement processes, the P2P module is dedicated to the management of all phases, from collection of requirements to invoicing. Within the Procure-to-Pay process users are enabled to identify and choose among several points crucial for a true customer-supplier collaborative relationship
For example, the simplification of the entire end-to-end order management process, from the definition of requirements to collaborative management with the supplier, as well as the support to order change process, i.e. the modification and confirmation of the supplier’s order and its internal approval. A further example is related to the reduction of lead-time and management costs of delivery planning, the possibility of real-time exchange of delivery plans and communication of the composition of packaging units, which can be integrated with warehouse systems.
Concerning invoicing, Accelerate manages the 3-way matching of passive invoices allowing control directly on the supplier’s invoice platform and defining the compliance of the document in terms of comparison with the purchase order and delivery. In this way the approval process is complete and automatic.
Thanks to the integration of specific components in P2P, our solution supports collaboration in the product development process, simplifying document and information exchange between customer and partner.
We have several P2P use cases in the world, in Italy for instance a company in the pharmaceutical distribution sector fastened and mapped the entire end-to-end process from the purchase request to the payment of the invoice thanks to P2P implementation. All steps are now traced and the project allowed centralisation and digitalization of the paper archive of orders distributed between different sites and to manage the history of information related to orders and the order management process.
The second case I would mention is a Telco managed by a proxy-to-pay process that is not fully integrated. With the implementation of our P2P module we were able to cover the entire procurement process from a functional point of view, enabling control across departments and also simplifying their procedures in some cases.
Green procurement and Collaboration are key focus today, do you think there is a link between these topics?
The benefits of digitisation and supplier collaboration have a direct and indirect impact from the point of view of green procurement and sustainability. Delivery times and methods optimisation for products/services, paperless management of purchase transactions, the reduction of the application base following the adoption of SaaS solutions, as well as the possibility of managing all these processes remotely anywhere, anytime. All these aspects have a huge and positive impact on the environment
There are also indirect impacts: think about the sustainability and environmental performance assessments of supplier companies for Purchasing departments, provided by dedicated info providers. The results of these surveys are integrated and visible in our P2P module, this contribute to the end-to-end assessment of partners, in line with a collaboration and continuous improvement approach.
A further and important factor is the impact of all those tools that contribute to reduce the internal management costs of the purchasing process, allowing resources to be freed up for procurement activities with greater added value.
Could you give us some examples of solutions that allow the purchasing department to focus on more strategic activities?
A typical pain with purchasing offices is the famous 80/20 rule: 80% of documents and transactions must be handled with 20% of the time as target, leaving the remaining time for value-added activities. This is achievable when you can automate your workload as much as possible.
This automation can be achieved thanks to RPA, Robotic Process Automation: all purchases not requiring direct control by the procurement department and/or that may require as little intervention by the buyer are automatic. Once the product categories that fall within this area have been identified, these tools enable the management of the entire process, such as approval of the order itself, direct dispatch to the supplier, automatic signature and distribution of the order to the company departments that use it.
Another central theme related to supplier collaboration and non-core business categories is the Catalog Management and Punch-out module of the P2P solution in our platform. This integration provides all company departments a way to autonomously sourcing all non-core products and services, which, on the other hand, would increase the workload of buyers facing a high number of transactions with low unit value.
Suppliers in these categories have the possibility to publish their catalogues directly on our platform or, in the case of Punch-out, to enable the same customers to navigate within their own purchasing portals, integrated with the P2P platform and with their own accounting systems. A perfect seamless integration from the need to delivery and invoicing, without direct negotiation of the purchasing department.
Benefits of supplier collaboration are successfull only when linked to speed adoption of the most suitable tools to achieve them. Until thirty years ago it was unthinkable to implement a P2P system process in just three months. Today, however, it is the standard of reference for us, not to mention the investment in terms of people and technology, which has been significantly reduced and which widens the range of adoption by companies. The solutions available to the CPO today are much more accessible, quicker to implement and user-friendly.