4
900 words required………………….
e-Procurement Business Case Development
Team B
ISCOM/361
e-Procurement Business Case Development
A commodity product includes a series of physical substances that have basic use that could be taken from natural sources. The company we chose to write about and that has a commodity product is the Bean Company. It is a company that sells 100% organic, healthy Arabica bean coffee. The customers can purchase whole beans, already ground up beans, or in K-cup form. However, typically the company is popular for the coffee beans more so than the other variety it offers. For instance, this paper involves all activities in e-Procurement that allows a commodity product to be released in an easy way because the company uses tools such as ERP and MRP that includes transactions, forecasting, and among other challenges with these systems to create a better flow in production.
Define the elements of e-Procurement employed with the commodity supplier.
ERP/MRP system
ERP and MRP codes represent systems that a business utilizes to ensure they are coordinating their planning activities according with the production process. ERP (Enterprise Resource Planning) allows the company to cover areas that include accounting and purchase ledgers, human resources including payroll and time sheets, supply chain such as stock control and purchasing, or warehouse data to manage every document. Similarly, MRP (Manufacturing Resource Planning) focusses on sales, job costing, purchasing and production orders. Both are necessary in manufacturing because they facilitate upper management to locate their resources and to control inventory levels of raw material as well as final products or services. Transactions
These agreements are made between two parties, the supplier and the buyer in which they both exchange products or services that will turn into payments. These transactions can get complicated if they are not clear or if the parties have not settle their terms and conditions. Every company is responsible to be accounted for their financial records and tax reports. For instance, some of these transactions include, credits, deposits, and among other forms of payment rules to make sure each party is corresponding to their agreements. Moreover, each company has their internal control of what financial transaction are being made and one department is responsible to authorize purchases, receipts, and payments.
Forecasting
Forecasting is a vital yet demanding job in supply chain that consists of a full-time position, making sure and understanding what is needed ahead of time will help keep the company producing products in a more productive manner. As a supply chain manager, it is your duty to save the corporation costs as needed, and by forecast supplies that are needed you can order in larger quantities with better pricing. Having a software that can analyze history of products will better be able direct you to not over or under ...
4
900 words required………………….
e-Procurement Business Case Development
Team B
ISCOM/361
e-Procurement Business Case Development
A commodity product includes a series of physical substances that have basic use that could be taken from natural sources. The company we chose to write about and that has a commodity product is the Bean Company. It is a company that sells 100% organic, healthy Arabica bean coffee. The customers can purchase whole beans, already ground up beans, or in K-cup form. However, typically the company is popular for the coffee beans more so than the other variety it offers. For instance, this paper involves all activities in e-Procurement that allows a commodity product to be released in an easy way because the company uses tools such as ERP and MRP that includes transactions, forecasting, and among other challenges with these systems to create a better flow in production.
Define the elements of e-Procurement employed with the commodity supplier.
ERP/MRP system
ERP and MRP codes represent systems that a business utilizes to ensure they are coordinating their planning activities according with the production process. ERP (Enterprise Resource Planning) allows the company to cover areas that include accounting and purchase ledgers, human resources including payroll and time sheets, supply chain such as stock control and purchasing, or warehouse data to manage every document. Similarly, MRP (Manufacturing Resource Planning) focusses on sales, job costing, purchasing and production orders. Both are necessary in manufacturing because they facilitate upper management to locate their resources and to control inventory levels of raw material as well as final products or services. Transactions
These agreements are made between two parties, the supplier and the buyer in which they both exchange products or services that will turn into payments. These transactions can get complicated if they are not clear or if the parties have not settle their terms and conditions. Every company is responsible to be accounted for their financial records and tax reports. For instance, some of these transactions include, credits, deposits, and among other forms of payment rules to make sure each party is corresponding to their agreements. Moreover, each company has their internal control of what financial transaction are being made and one department is responsible to authorize purchases, receipts, and payments.
Forecasting
Forecasting is a vital yet demanding job in supply chain that consists of a full-time position, making sure and understanding what is needed ahead of time will help keep the company producing products in a more productive manner. As a supply chain manager, it is your duty to save the corporation costs as needed, and by forecast supplies that are needed you can order in larger quantities with better pricing. Having a software that can analyze history of products will better be able direct you to not over or under ...
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Purchasing is a subset of procurement. Purchasing generally refers simply to buying goods or services. Purchasing often includes receiving and payment as well.
A Request for Quotation (RFQ) is a formal document issued by organizations to invite suppliers to submit price quotations for specific products or services. This guide provides a thorough overview of the RFQ process, detailing the essential steps, key components, and best practices for successful execution. From defining clear requirements and evaluating supplier capabilities to comparing quotes and making informed decisions, this guide aims to equip procurement professionals with the knowledge to optimize their RFQ processes. Whether you're new to procurement or looking to refine your strategy, this comprehensive guide will help you achieve cost-effective and efficient sourcing outcomes.
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Addressing S2P (Source-to-Pay) is necessary for organisations today in order to reduce transaction costs, but that alone is not enough to drive real cost reduction and bottom line profitability. To derive the maximum benefit, organisations need to seize the opportunity created by the disruption of a S2P implementation to radically transform the way in which procurement is carried out throughout the organisation. This paper provides suggestions on how to make the most of the opportunity created by S2P implementation and makes recommendations on how to maximise the benefits,
Procurement Management during project Management process:
A Procurement Management Process, or Procurement Process, is a method by which services are purchased from outside the organization. The procurement management process involves managing and review the contract and work with approval of final product from suppliers.
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"Procurement Leadership Agenda " is an insightful e-book that outlines the key strategies and priorities for procurement leaders in this year. It provides valuable insights into navigating the evolving landscape of procurement, including best practices, trends, and emerging technologies. This comprehensive guide equips procurement professionals with the knowledge and tools needed to drive innovation, efficiency, and value within their organizations. Whether you're a seasoned procurement leader or aspiring to take your procurement function to new heights, this e-book is an essential resource for staying ahead in today's competitive business environment.
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The ultimate source to pay (S2P) process guide for 2023.pptx
1.
2. The Ultimate source to pay (S2P) process guide for
2023
Procurement in any business has a direct influence on the overall savings. A streamlined procurement procedure makes it feasible to buy high-quality
products at affordable prices. The procurement source-to-pay process includes steps including vendor evaluation, contracting, supplier identification, and
payment for products provided.
What is Source to pay?
The source to pay process (S2P) comprises of all the procurement tasks that involve the vendor and the organization. The initial phase in the source-to-pay
process is choosing the best supplier, and the final step is paying the provider. The entire sourcing and procurement process for identifying, assessing, and
negotiating with suppliers of goods or services, finalizing contracts with vendor payment, is another way to define the source to pay concept.
The source-to-pay process involves tactical procurement tasks like spending assessment, purchasing, contract management, and supplier management as
well as concluding tasks like purchase order processing, electronic procurement, accounts payable, invoice automation, and payment processes.
3. When is a source-to-pay system used by a company?
A source-to-pay system might be helpful for organizations that need to evaluate new vendors who offer better purchasing terms, lower costs, or new commodities that
are not supplied by existing vendors.
What are the advantages of a source-to-pay system for your business?
The benefits of a source-to-pay system are:
1. Centralizes the whole supply chain to increase the efficiency of procurement
2. Creates a single sourcing platform that combines key procurement processes
3. Promotes adherence to regulations, contracts, and procedures
4. Aids in improving the consistency and accuracy of business forecasting
5. Facilitates accurate expenditure analysis
6. Collaboration between suppliers and businesses is improved
7. Assesses supplier performance against standards and benchmarks such as pricing, deliveries, invoicing cycle time and other crucial performance indicators.
A streamlined source-to-pay procedure improves spending and procurement visibility. Source to Pay combines purchases across business units rather than treating
procurement as a collection of unrelated jobs in order to boost performance, create business value, and enhance expenditure analysis.
4. Standard Source to Pay process flow
Source-to-pay process can be laborious and time-consuming without a sound plan. The source-to-pay life cycle includes the processes listed below:
5. 1) Discovering Suppliers:
Finding potential suppliers is the first phase in the S2P lifecycle. Researching the market extensively is necessary to select the ideal supplier. The sourcing team members
will send out the RFIs (requests for information), RFPs (requests for proposals), and probably RFQs (requests for quotes) to prospective vendors. Some businesses utilize
templates to quickly collect vendor information. E-auctions are a commonly used strategy that sourcing teams use to find the greatest prices on products and raw materials.
E-auctioning is a more efficient way to find reputable and cost-effective vendors.
2) Evaluation and Screening of Vendors:
The RFX vendor data and the e-auction results aid the sourcing team in screening the vendors to identify good matches. Finding the right balance between product
affordability and making a profit is the key to effective sourcing. For the business to turn a profit, the raw materials must be affordable. Suppliers are assessed based on their
pricing, minimum order quantities, delivery timeframes, and other criteria in addition to their quality. Negotiations happens once the sourcing team selects the ideal buyer.
3) Contracting and Negotiating:
The sourcing team may choose to work with only two or three vendors after analysing the vendor information from multiple vendors. The goal of the contracting and
negotiation process is to select the best provider. Businesses are constantly looking for methods to keep production costs low throughout the supply chain, and the ideal
place to do so is during the sourcing stage. Purchasing costs for goods can be significantly reduced when larger quantities are sourced. Contracts must be issued after a
specific price and order volume evaluation.
6. 4) Purchase Order:
According to the agreed upon cost and quantity of the items, the purchase order is issued. The purchase order becomes a legal document once the vendor accepts it. It
includes every clause of the agreement between the business and the vendor.
5) Products Delivery and Payment:
This completes the source-to-pay procedure. To guarantee that the received items are in accordance with the purchase order, the information in the goods received note is
compared to that in the PO. At this point, the quality of the received goods is also examined. Payment to the seller is processed once the verification is finished. As per the
business requirements, a shipping and payment process is set up to make sure verification and on-time payment and delivery. The timely delivery of raw materials and the
continuity of production operations are ensured by adhering to a delivery and payment schedule.
The complete source-to-pay process can be efficiently automated with cloud procurement software, which saves time as well as effort. An extensive range of functions is
provided by a source-to-pay software throughout the procurement cycle.
7. Automating the Source to Pay Cycle
Nearly half of the source-to-pay process might be efficiently automated using current technologies. By removing duplication and redundancy, the numerous source-to-pay
products on the market are intended to streamline the source-to-pay process. The S2P solutions contribute to higher savings, lower prices, and more chances to investigate
new value-add sources. As per the McKinsey reports, digitizing the source-to-pay process can decrease spending by almost 3.5%. The scope for automating the complete
source-to-pay procedure is about 56% of the tasks in the workflow.
The more transactional aspects of the S2P process, especially the placing and receiving of orders, were determined to have the greatest potential for automation. Around
88% of the tasks can be digitized and about 93% of the activities in payment processing. Additionally, 47% of the supplier selection workflow and negotiation activities can be
automated.
An important business decision is selecting the appropriate automation technologies for the source-to-contract process flow.
The first and most crucial step for businesses is to decide which processes of the procurement process can be completely automated. For each task in the source-to-pay
process, it is important to determine the level of automation that is currently in place and to correlate it to what is technically feasible. The team can calculate the benefit of
bridging this gap. The analysis is based on changes in compliance, cycle durations, and payment conditions at each step, as well as the number of tasks that can be
automated. Businesses that are considering automation should make careful and targeted decisions on using the right technology for digitizing the S2P workflow because the
digital world is always changing.