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May 13
Organized Contract Management

5 Reasons You Need a Real Contract Management System

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Are you still using Sharepoint or similar software for contract management? You may be putting your business at risk and losing a lot of time and credibility in the process. A real contract management system not only boosts efficiency and reduces liability, it makes everything so much easier. It’s like sending your contracts on a vacation with a day-spa—the whole supply chain process is going to be a lot more zen. 

If I give you fifty random contracts to find… how fast can you find them?

If you’re not using a robust contract management system, the answer to that question could be days, weeks, or worse—maybe you couldn’t find all of them. If that last part applies to your business, you’re not alone.

When we have had clients come to us for help with contract management, we’ve asked them this exact question. One client (we’re not naming names! There’s no shame in fixing a broken system.), they could only find sixteen out of fifty contracts over the course of three full days searching.  Yikes. Talk about a costly timesink, especially when you think of this inefficient process accumulating over years of business. 

“When am I honestly going to need to find fifty random contracts?” some ask. Let’s talk about when and why this matters to your business. 

  • You need to cancel a contract. You are not sure about the start or end dates.
  • You have suppliers for duplicate or similar products.
  • Your company gets involved in litigation regarding a supplier, perhaps due to faulty products that caused harm to your customers.  
  • Your line of business is in the healthcare industry. Not being able to pass this test effectively could jeopardize your business’s accreditation.

With proper contract management, this task should be as easy as searching Google. A few quick taps of the keyboard, and there are your contracts. Easy peasy, and so much less stress when a situation is already wearing on your nerves, such as in the case of a lawsuit. It’s one less thing for you to worry about, and can save massive amounts of time, money, and Tylenol over years of running a business. 

Are all of them signed by both parties? 

A contract that isn’t signed by both parties is no contract at all—it’s as enforceable as a scribbled-on burrito wrapper. Especially when you’re dealing with lots of different contractors who renew at different times of the year, it can be difficult to track who has signed what and sent it back without a good system supporting you. 

Carrying contracts that aren’t signed by both parties is a huge risk to your business.  We’re talking sub-par harmful products with no recourse, errors and ommissions insurance nightmares, unfortunate liabilities in the case of catastrophe. It can be legal chaos to find out, in a desperate moment for your business, that a contract was never signed, thus there’s nothing you can do. There was never an agreement at all, for most purposes. 

A successful contract management system will ensure everyone you do business with has signed all necessary documents, so you’re never caught with your pants down. This brings us to our next point…

Do you use electronic signatures?

A startling number of businesses are still managing contracts like they were dropped in a cubicle in the early 90s. Faxing? It needs to be a thing of the past. And let’s toss out pen signatures too while we’re at it.

Let’s be honest, do you think your business would basically implode if we dropped your fax out the window? 

Well, let’s have a lesson in gravity, because putting so much stock in an outdated, inefficient method of transmission is costing your business a lot of time and money as well as putting your business at risk. 

Electronic signatures through applications like DocuSign are a reliable method of signing contracts in a way that boosts efficiency for you and your contractor while also resolving the issue of carrying contracts signed by only one party. 

With e-signatures, contractors are shown step by step which places require signatures and initials throughout a contract, so there are no more missed steps. Aside from the fact that it is straightforward, nearly instant, and auditable, they also help in another way—reminders. Have you been waiting for two weeks on a signature? Let the platform automatically remind your client. It’s one less thing to pay your employees to manage and is likely to get that contract back signed faster than older methods. Plus, it’s easy to organize contracts that are already digitized. Bye, bye scanner. Enjoy the company of the fax machine. 

Do you have a report that shows when all of your contracts expire?  

Is it time to renew your contracts? Right now? Last week? If you’re like most businesses without a CMS, you have no idea. 

Knowing when your contracts expire lets you be a step ahead. Unhappy with a supplier? You’ll probably need some time to search for a new one before you drop the old one. That means research, comparisons, time, and ultimately money. It’s not something you want to have to rush through. 

A real contract management system will let you know which contracts expire 30 / 60 / 90 days in advance, so you have plenty of time to determine your most advantageous next move. 

Can you quickly and easily keyword search?

Do you need to know which contractors you have supplying bed linens? Toilet paper? Are you among the buyers in the Great Glitter Conspiracy*? With a proper contract management system, you just need to do a simple text search to find exactly what you’re looking for.

Don’t settle for anything less than user-friendly, data-driven contract management that keeps you ahead of the curve instead of rustling papers and unjamming the fac machine way, way behind it. 

About Premikati

Premikati is a woman-owned business of procurement experts providing best-in-class software to maximize your company’s ROI.  

Our award-winning team has a 100% success rate implementing on-time and on-budget, due to our agility, leanness, operational experience, and the ability to tailor the transformation process from C-level to end user. (For more information, visit www.premikati.com)

 

*Spoiler alert: After much deliberating and searching among hordes of Redditors, the answer has been found.  It’s the boating industry. Boat paint uses glitter. However, the intense secrecy surrounding glitter production and the surprising technological complexity of glitter creation makes it worth a look for the curious at heart. 

 

May 12
Procure to Pay Premikati

A Day in the Life in the Procure to Pay Cycle

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Even with advanced solutions available, many businesses still try to make do with their legacy systems – and manual tools –  when managing their procure-to pay process. Even if work is getting done, it is often prone to error, redundant, inefficient, and slow.

It’s really just a matter of time before countless issues arise and cause damage to a company’s procurement strategy, especially in these current economic conditions where companies need to be agile most of all.

So what does the procure-to-pay process entail?

The procure-to-pay workflow is a coordinated set of actions based on the objective of acquiring goods and services at a reasonable cost and in a timely fashion.  It begins with need identification and moves on to invoicing and payments.  There are several steps, and they need to be executed in order.

Invariably, the procure-to-pay process is one component of supply chain management.  Once the required goods or services are obtained, the supply chain department will make sure these goods or services reach the right destinations.  Of course, a day in the life is never ordinary.  Keep reading to learn more.

Market analysis

Most people will research a company’s goods or services before making a purchase.  The same is true for the procurement-to-pay process. The initial step is to perform a market analysis.  The goal is to get the best deal possible. In addition, the company’s budget is met.

Often, a procurement manager will look at how a fluctuating market may affect prices.  Further, they will also review prices from a list of suppliers.  After the comparisons, the procurement manager may send a request for quotation (RFQ) to help make the final decision.

Compliance checks

In the digital era, compliance is one of many areas a company must adhere to based on their industry and location.  There are federal, state, local, and global regulations to follow.  As a result, the procurement manager must ensure all contracts are in compliance with legal mandates.   Moreover, the procurement manager must remain apprised of any legislation updates and revise company policies around procurement-to-pay when needed.

Compare the suppliers

Each supplier has their pros and cons. What’s most important is working with a supplier/s who can meet a majority of the company’s needs.  A supplier usually isn’t signed on to a contract without a careful review.  Plus, the supplier must demonstrate they can deliver the necessary goods and services as needed and that they are of the desired quality.

Get team members on the same page

Planning out schedules for employees is part of the process with the intent of meeting deadlines.  Not to mention, any issues with goods or services need to be addressed immediately.  Sometimes this means holding weekly, or daily, meetings to get the team and suppliers on the same page.

Determine the need

For starters, the initial step is to figure out a valid need and the associated business requirements.  Then, the procurement team starts work on the terms of reference (TOR) and statements of work (SOW).

Create a formal purchase requisition

Once the TOR and SOW are completed, then the procurement team will fill out and submit the requisition form.  The form can vary in procurement whether it be for consignments, purchases, or something else.

Obtain requisition approval

The procurement manager usually approves or rejects a purchase requisition based on whether it meets the need and budgetary guidelines.  Not to mention, incomplete requisitions are automatically rejected.  This is about focusing on best practices to ensure the company saves money without sacrificing on quality.

Complete a purchase order

The purchase order will be based on a negotiation around payment terms, price, and delivery time.  A spot buy may also be executed for unique purchases or unmanaged category buys.  The purchase orders will also come from the purchase requisitions.

Obtain another approval

As you can see, there are many approval procedures to go through during the procure-to-pay process.  The purchase orders are reviewed for accuracy and legitimacy.  Suppliers also have the option to reject, approve, or renegotiate.  Usually, POs are sent electronically – they can be entered right into the supplier’s PO system.  And once a PO is approved, then a legal contract ensues.

Apply a goods receipt

Now is the time to take stock of the goods or services.  Were they delivered on schedule?  Are they of the quality promised by the supplier?  Do they comply with the contract?  There may be other policies in place before creating the goods receipt.  Additionally, the goods receipt can be rejected and the process restarts.

Rate the supplier

It is crucial to have reliable suppliers.  Based on the goods receipt, performance can be assessed.  Again, the procurement team will look for quality, budget, compliance, timely delivery, and several other factors.  Any negative ratings will be stored for future reference.

Approve the invoice

Once a goods receipt is approved, a three-way match between the purchase order, the vendor invoice, and the goods receipt is performed.  If there are no discrepancies found, the invoice is approved and forwarded to the finance team for payment disbursement.  The goods or services are matched against the line items published on the invoice.  In the case of inaccuracies, the invoice is rejected back to the vendor with a reason for rejection.

Send the payment

Once the invoice is approved, it is submitted to the accounting/finance department for approval.  Payments are then sent based on the terms of the agreed-upon contract.  Unquestionably, the payments will be made as one of these types:  Final, advance, partial, installment, holdback. Other stipulations accounted for may occur, for instance, when a supplier offers a discount for payments made 10 days after a goods receipt.

Weekly or monthly responsibilities

Outside of the strict procure-to-pay workflow, procurement managers will consistently review purchase orders and potential suppliers for other needs.  In fact, needs can evolve and demands will change – as we have seen directly during the COVID-19 crisis.  Bid awards will also be created, subject to final approval.  Sometimes, procurement managers may also handle the responsibility of creating bid specifications.

Analyze spend

Again, the procurement-to-pay workflow was designed to get the most cost-effective goods and services possible with the required quality.  Therefore, the procurement manager will continuously monitor spend – searching for any potential areas of concern such as a supplier changing or raising their pricing structure.  Keeping an eye on all purchases helps to conserve resources while meeting the company’s budget initiatives.

Final thought

As you can see, the procure-to-pay process requires a strict adherence to specific actions, guidelines, and regulations.  The workflow is ripe for incremental improvement as the world becomes more digitized.

To ensure value development, and success in a post-pandemic world, innovative companies are transitioning to Procure-to-Pay software as a means for addressing inefficiencies and creating an agile environment.  Are you ready to streamline your entire procurement-to-pay process?

Experience the Premikati difference.

May 05
Ariba Snap procurement

Procurement Lessons in the Midst of a Pandemic

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As the COVID-19 pandemic spread throughout the world, supply chains and procurement saw their traditional modeling around price negotiations, contract compliance, and cost control become overwhelmed with unprecedented challenges. Through this time, Premikati has learned that managing risk is paramount.

Suddenly, supply chains and procurement have been disrupted in ways we have not seen in our lifetimes. Many large and small entities had to immediately reconfigure their manufacturing, and procurement, to producing, distributing, and meeting the most essential healthcare supplies and foods to ensure populations are safe and healthy.

All of these actions required identifying new suppliers, vetting them, and ensuring enough liquidity to purchase necessary goods at scale. Further, unused inventory needed to be addressed as well.

Invariably, experts from every field prognosticate on how COVID-19 has changed our lives – and our economies – forever. The many blanket, and even extreme, disruptions to our work lives only serves to convey that we are still all playing a role in this huge experiment where technology has led the transition from traditional office environments to remote working and virtual happy hours. Is the future here, right now?

At Premikati, we don’t have any exact predictions around how this pandemic will impact procurement processes over the long term. What we do see is an opportunity to determine how digitization and new platforms can help companies gain a competitive edge once we reach the other side – and, we will.

Naturally, we all hope the pandemic will end soon and life will return to normal – as it has in previous disaster scenarios. Yet, it appears that many facets of our economy will never return to the pre-pandemic version of normal.

At this point, technology can help solve many of the issues which the pandemic has brought to the forefront. It’s time to change the mindset and work in a more collaborative and strategic way.

History in the making

For the first time in modern procurement, and supply chain history, a pandemic created a global impact on supply, demand, and the available workforce simultaneously. In order to revive the supply chain, and get things back to efficient processes, we view automation as a critical aspect.

In light of the global cracks in the supply chain, automation can help to increase productivity at home and with alternative suppliers who are located much closer to the communities they serve. In fact, with automation, many processes can be successfully executed domestically while creating new job opportunities for tech-savvy employees.

We also consider how important data will be not just now, but for the future of work. For procurement, greater connectivity demands an acceleration in digitization across the board and a utilization of collaboration tools, industrial IoT, and AI-driven insights to improve agility, capacity, predictability, and availability.

What does the future hold for procurement?

At Premikati, we truly believe that companies who invest in strategic technologies will come out of these perilous times with a competitive and profitable edge. Not to mention, your in-house team can ultimately become much more productive.

The COVID-19 pandemic has been a wake-up call for procurement in terms of addressing supply chain risk and business continuity. Perhaps it’s time for full-scale deployment of connected intelligence.

Yet, sourcing is just one side of the issue. Companies should also understand the supplier side. When you can comprehend the issues affecting your suppliers, then you can more efficiently ward off potential issues in the future. Some of the most critical components for the supplier side include:

  • Tier 1 supplier risk
  • Ensuring an alternative supply network
  • Efficient workforce planning
  • Bolstering the supply chain
  • Improved planning
  • Business continuity amidst plant closures
  • Production flexibility
  • Capacity security
  • Global planning

Think about your non-negotiables: Customers, employees, products, services, lines of business, and more. Which of these are the most critical for business preservation?

Without adequate plans in place, many businesses went towards overadjusting where they would increase inventory across the board – just as consumers were doing the same hoarding toilet tissue, masks, disinfectants, canned goods, soaps, and hand sanitizers. Nonetheless, overadjusting can come with consequences such as excessive inventory during a time when consumers have cut back on spending.

Disruptions have occurred upstream and downstream. The most successful companies will work on improving visibility, agility, and responsiveness using strategic analytics. As a result, you can determine how you can mitigate the risks and begin recovery quickly.

At Premikati, we realize that every company is at a different stage in terms of dealing with the impacts of the pandemic. Not to mention, problems can vary depending on region. We want to offer guidance on where to find opportunities in the midst of unprecedented challenges. Quick action is essential right now.

Premikati can help your organization control the narrative and the outcome, complete with a thriving environment. Working through this crisis, we are prepared with new business models created to define the future of work in procurement and for supply chains.

Final thought

The organizations with the highest likelihood of weathering this storm are those who have achieved the optimal balance between short-and-long-term strategies. During a crisis, the most common mindset is the short-term one. On the other hand, being forced to operate differently has helped many businesses see what they can do and also, what they need to do.

More than just adapting to the current environment, become a market shaper and take part in the reinvention.

Premikati hopes that by sharing what we’ve learned about this pandemic, that we can help strengthen your procurement processes. Our solutions are focused on accelerated efficiency, resiliency, mitigation, scalability, and flexibility. We are all facing this together, so let’s collaborate.

Apr 28
Future Proof your Supply Chain

Future Proof your Supply Chain

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Future Proof Your Supply Chain

Over the past two months, every government and healthcare facility around the world has worked tirelessly to learn more about COVID-19, to treat afflicted patients and most of all, to stop the spread. At the same time, global importers and exporters have also struggled with the pandemic’s unprecedented impact on their supply chains.

Even with the lessons we have learned from the SARS outbreak, or the Swine Flu outbreak, or the 2011 Fukushima tsunami, the logistics concerns and risk management strategies have been put to the test by COVID-19.

Given the scale of the pandemic, it is difficult to rush into the creation of a methodical supply chain. Nonetheless, staying ahead means taking the lessons learned and planning for a future with the possibility of similar incidents.

Invariably, toilet paper has been the one commercial product which everyone can tie to the global panic surrounding the coronavirus. You would think people would be buying pallets of hand wash, but it was oddly toilet paper. We’ve never seen so many news headlines about toilet paper in modern history.

Despite the illogical rush, many manufacturers did not halt their production and distribution of toilet paper. Yet, there are many other products with halted production due to supply chain disruptions. Now, toilet paper is widely available once again.

Still, with a deeply linked global supply chain, operating in tight margins, this is prime time for a significant reordering. The tissue hoarding is just one example.

As a result, it is never too soon to start planning for the next potential crisis. Not to mention, global economies will be in recovery mode for the foreseeable future. Even as nations open back up, things won’t bounce back to pre-pandemic levels just yet. If the recovery period is protracted, then it will require increased levels of coordination and orchestration.

The uncertainty is still here. But, with planning, you can help facilitate a more significant bounce back. In addition, the actions you take now will set the stage for sustained performance and growth once the pandemic is fully mitigated.

Implement risk management systems

Regardless of how great the current implications are, risk management is still a priority. The tools which should be in place include credit risk and supply risk. Think of the lessons you learned from the Great Recession in 2008 to get a sense of how to address client and supply-side credit risks. Keep things in balance without any overlap.

Increase visibility

One of the keys to supply chain recovery is by increasing visibility so that you can make data-driven decisions on a timely basis using real-time data. To achieve this, look at deploying control towers to send alerts, insights, and data. If you can put these types of control towers together quickly, even better. Utilize control towers powered by artificial intelligence and machine learning which provide advanced analytics.

Next, you want to look at your direct and indirect supplier base and identify areas with increased levels of supply chain risk. Review your KPIs throughout your extended supply network, contracts, bottlenecks, stock-outs, and overall performance with the objective of working towards better synchronization.

Then, improve real-time visibility around order fulfillment while looking for areas prime for improvement such as better delivery estimates or improving expectations around product availability to even accessing inventory outside of primary fulfillment centers.

It’s also extremely important to have better visibility around the logistics infrastructure, backlogs, delays, capacity constraints, inventory levels, and the material flows. Figure out where you can improve customer service through these processes.

Further, take a look at your factories and expectations around any supplier constraints of inbound materials along with the quality of materials. How are asset utilization and labor scheduling affected by COVID-19? What is production like across various facilities? Are their quality control issues? Can you make use of advanced algorithms to address inbound quality issues, as well as finished goods quality issues moving forward?

Analyze your supply chain infrastructure and design

Before the pandemic, most organizations worked with the assumption that raw materials were always readily available and accessible for global production. It seemed a one-size-fits-all supply chain perspective. Although, COVID-19 has thrown a wrench in this philosophy.

So then, instead of continuing to use static operational systems, look at dynamic distribution capacity. Find local supply sources in all of your major markets. Stop relying on single sourcing. Even if single sourcing has kept costs low, we are living and will live in a different world after the pandemic.

Research suppliers in local markets in the event you need to have a secondary source. As a result, you can diversify your supply chain and rely on more dynamic distribution.

As you can see, the only thing you can rely on is change.

Break up your supply chain. If your supply chain is too long, you can expect larger issues. Take the toilet paper example again. Production has continued, but store shelves remained empty because brand owners were not getting replenishment alerts fast enough even though they normally sit on at least two weeks of inventory. If there are a larger number of nodes affected, then the bullwhip effect comes into play with distorted signals and an increase in demand error.

Separate fact from fiction

Right now, your supply chain may be experiencing the bullwhip effect of unpredictable buyer behavior, such as the run on toilet paper and related products such as flushable wipes. Or, the panic-buying of staple items such as rice and beans, disinfectants, and medicines. There is a known-unknown matrix in the pandemic scenario. But, it’s still vital to separate fact from fiction, don’t make assumptions.

Increase agility around evolving customer demands

Manufacturers could not immediately respond to the toilet tissue shortages because they do not rely on shelf signals. At the same time, demand for luxury items tumbled. The COVID-19 pandemic has made the estimation of final customer demand more challenging but also more significant.

Figure out if the demand signals you get are coming from your direct customers, and if they reflect the pandemic uncertainties. Create a demand-planning team, using analytical tools, to ensure you have a dependable demand signal to ensure you are providing adequate supply.

In addition, use marketing insights, databases, and customer communication platforms to better understand the demand straight from your client’s customers. If data sources are limited, then use direct communication channels to plug the discrepancies. Furthermore, use stringent processes that can quickly adapt to evolving scenarios. Remember to do the following:

  • Create an accurate demand-forecast strategy
  • Incorporate market intelligence
  • Use analytical forecasting tools
  • Create a dynamic monitoring system that facilitates quick mitigation of forecasting errors

Many customers were buying based on shortage predictions. If needed, decrease the size of the orders, but make them more frequent to ensure a higher level of agility when needed and the ability to manage the highs and lows of varying demand.

Optimize both production and distribution

It’s crucial to employ scenario analysis to detect various production scenarios for understanding their operational and financial implications. And then, production should begin by making sure your employees are safe, offering the option for remote work if possible, and listening to your employees’ concerns.

Plus, scenario planning is crucial to determine the implications of a long-term shutdown. How will this affect available capacity and current inventory levels? Figure out which products are the highest in demand – strategically – taking into consideration that health and human safety are at the forefront of customers’ minds.

Further, how will these current implications impact future recovery? Draw a more comprehensive analysis with input from strategy staff, marketing, sales, and operations to contribute to macroeconomic forecasts. By taking these types of actions, you can better align production and supply chain with the expected demand – depending on the circumstances.

Improve deployment of dynamic inventory

For the most part, companies often have a primary distribution center to serve its customers. Then, historical demand data is used to optimize the network. So then, customers get the products they want, when they want them. But, the pandemic environment is anything but normal with much higher supply-side volatility and surging demand for certain types of products.

As the economy rebounds, there will be inventory imbalances present throughout the network. As a result, consider alternative routes to secure your logistics capacity. Regions will emerge from quarantine piecemeal, which means that there will be an irregular supply chain for an extended period of time. Think of how you can diversify your distribution networks and how to address regional availability. Create alternative distribution centers now.

In conclusion

Take notes from corporate investors who have been working on reducing their stock portfolio volatility and re-evaluate cumbersome overseas supply chains. Whether we are facing a pandemic, or a trade war, organizations in every sector must work at improving supply chain risk.

The only way to mitigate the impact of unpredictable pandemics is with thorough preparation. Even before the next crisis occurs, your contingencies should already be in place. The recovery may be V-shaped, or it could take longer and resemble a L-or-U shape. Still, recovery is coming. In the meantime, this is the word of the day: Diversification.

Apr 21
Virtual workforce

How To Thrive While Transitioning To A Virtual Workforce

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How To Thrive While Transitioning To A Virtual Workforce

Summary: Many people are working from home during the coronavirus pandemic. New remote workers and businesses can help foster success by generating routine, utilizing calendar sharing, having video meetings, setting clear expectations, developing time management skills, and continuing to learn. 

 

As of 2017, 43% of employees worked remotely with some frequency. In 2020, with the COVID-19 pandemic shuttering many brick-and-mortar office places, agile companies are quickly pivoting employees to remote work. Telecommuting is a great benefit in the age of social distances, but it comes with its own challenges. Especially companies and their employees who are new to telework will likely experience growing pains, but there are steps you can take to ease the transition and ensure your virtual workforce is able to thrive. 

New Normal, New Habits 

Working from home is a major transition for employees who have spent their entire working lives in an office space. While offices offer a sort of comforting familiarity, a steady set of expectations, and a familiar environment while home may be full of energetic children, stir-crazy pets, and plenty of chores and hobbies alike to do. 

The best thing for companies who are new to this form of work is to understand that is a transition and that it can take an adjustment period for workers to find their focus, their flow, and their new normal. During this period, be lenient, expect some technical complications, and have patience while new systems for collaborating and working are developed and tested among workers who are unfamiliar. 

You can ease the transition by creating a form of routine, just as employees had at the office. This could be a recurring meeting, a consistent sign-on, sign-off, or lunch time, or anything else that offers stability in this time of stark change. 

Similarly, equip teams with a calendar sharing application such as Google Calendar. When teams can collaborate and understand where time is used and how their efforts fit into a bigger picture that they all are working toward, the stress and isolation of working from home can transform into great freedom for productivity and collaboration. 

Set Expectations

When life is in a deep state of flux, employees can feel overwhelmed with a bombardment of decisions and uncertainty. Guide employees through work changes by offering clear expectations. This may mean specific output quotas, work hours, required meetings, or anything else that is a high priority for your business. 

Don’t set expectations too high or add requirements for their own sake. While structure is important, offering employees some freedom to feel into their new roles and schedules can help ease stress too, boost loyalty, and benefit your company’s culture on a broader scale. 

Communicate Differently

When workers can’t meet face to face, utilize technology to boost presence, connection, and accountability. Instant messenger and chat applications, such as Slack, help employees have real time conversations throughout the day. You can even set up a “watercooler” chat segment where employees can talk about anything to keep connection and camaraderie high. 

For meetings, use a video software such as Zoom in order to help replicate the rapport that comes with in-office meetings. Even a once-a-month meeting on a video can go a long way for morale and accountability. 

It’s important to find new, effective methods of communication with clients and buyers as well. For example, we at Premikati use remote demos to help engage potential clients. Because we are doing this from afar, we pay special attention to asking meaningful questions and really engage with our clients on a deeper level. 

Use Your Time Wisely 

Many new remote works feel like they simultaneously have more and less time than they once did. There’s no more commute time, tedious morning primping, prepping meals ahead, or other tasks that come with office work, but they may feel like work starts expanding into their personal life or struggle with focus during the day due to distractions. 

Time management is a make-or-break factor for virtual workforces. Set expectations surrounding schedules to help prevent worker burnout and the “always-on” mentality. Have focus sprints. Have patience with coworkers who may not always be available. 

Similarly, many job functions can’t be fully performed from home. If you or any of your employees are “benched” during the pandemic, look for other ways to contribute. Could they update documentation? Spend time brainstorming resolutions to industry problems? Furthermore, could they continue their education in order to make deeper contributions after the crisis? Do what you can do, and encourage your employees to do the same, but be mindful as well to not get caught up in busywork. 

Never Stop Learning

Continued education is always important to pursue, but now is a prime opportunity for many employees to pursue an expansion of their skills. Many courses are free during the coronavirus crisis, so time availability, a desire to learn, and an idea about what’s important to know are all you need to bolster yourself and your employees for the future. 

As the new normal for work continues to  change, keep learning what systems work for you and your employees, and don’t be afraid to try new things to make life, and work, a little bit easier and more connective. 

What has your business done to adjust and thrive during the transition to virtual work?  Reach out to us and let us know!

 

Apr 13
Streamline procurement

How to Streamline your Procurement Processes During a Pandemic

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Procurement Processes and a Pandemic

 

Within our modern era of globalization, and inter-woven supply chains, the coronavirus pandemic is presenting an unforeseen set of challenges to address. The state of multi-factory and multi-country manufacturing is now teetering on shaky ground. If COVID-19, and the economic downturn, isn’t effectively mitigated soon, the supply of various items from cars to clothing to electronics and even oranges will falter.

With the breaking down of the global supply chains, many are calling for returning critical production of medical and tech supplies to the United States. Perhaps, another option is to increase the redundancy of supply chains by further diversifying suppliers and inventory moving forward. As a result, any future obstacles can be more easily managed.

With increased demand for specific items such as soap, hand sanitizer, face masks, ventilators, cleaning products, and more – retailers have done their best to serve their communities while drastically transforming how they run their stores and protect the health of their employees and customers alike. In many communities, the pandemic has already negatively impacted the economy and sources of income.

In these times, businesses are going above and beyond to manage their supply chains effectively and ensuring consumers have access to the goods they need. Yet, we have all seen the deluge of images conveying barren store shelves and out-of-stock items. Right now, it’s time to address the short-term fallout from the current health crisis. In this article, we will focus on steps you can take towards minimizing the challenges associated with COVID-19.

How COVID-19 May Affect your Supply Chain

Since this is a novel pandemic, there isn’t an exact method for determining how the coronavirus may impact supply chains but you could experience instances of the following?

  • Materials: Shortages of supplies or materials from deeply-impacted locations.
  • Workforce may face fluctuations due to illness, fear and/or quarantine.
  • Travel, and shipping, may be limited due to newly-placed restrictions and decrease in demand for flights.
  • Established logistics, and networks, may be upended due to capacity shortages and even labor shortages.
  • Consumers are transitioning to online shopping en masse, for a larger percentage of their purchases, and this may be the existing reality moving into the future.

Now is the Time to Secure Demand

As network-wide stockouts increase for certain types of non discretionary goods, it’s critical to strengthen your relationships with co-manufacturers, consumer-packaged-goods (CPG) makers, and distributors. For the most in-demand products, you should hold daily conferences with suppliers to ensure comprehensive supply.

One way you can secure your supply is by limiting variety, for now, then increasing the quantities. In addition, it can help to be more flexible with your delivery windows and even your payment terms. Then redirect your employees and capital to the essential categories during this pandemic. Right now, it is very important to foster an environment of open communication with your partners.

If you are dealing with decreased demand and excess inventory of non discretionary goods, then perhaps you can sell to your distribution partners and also start working with suppliers who have adequate cash reserves.

Living in an unprecedented scenario requires long-term planning, as well. If you supply non discretionary goods then perhaps it might be time to shift focus and resources to 2021. Review your buys for next year, and revise the variety based on expectations of demand even after the pandemic is mitigated. Many of the changes the world has recently made will be long lasting.

Plan Quickly

Now that we are going through this crisis, it’s important to focus on how you can improve your supply chain to become more agile and responsive in the next crisis. Conduct a simulation test and develop a strategic response with action plans. There is no time like the present to create a network of alternative sources.

Being better prepared than the competition might even open new opportunities when the next disruption comes around. When the next disruption arrives, you want to be better prepared than your competitors. Figure out how to diversify concentrated supply chains with high value, and find alternate routes and sources.

Prioritize Flexibility

If you want to limit any future disruptions, then your procurement processes must be more agile than ever. Surges in demand are cobbling excess capacity of specific non discretionary product demands. In fact, freight costs and trucking demand have skyrocketed. Not to mention, shipping rates have gone up. Now that you have experience with this level of disruption, what can you learn from it and how would you prefer to handle a similar disruption in the future?

It will take creativity to ensure you have the capacity to consistently stock your store shelves with the essentials. And, it will take a larger portion of your financial resources. One way to limit expenditures is by having suppliers ship directly to stores, as opposed to distribution centers. Next, you could decrease packaging and assortment complexity so that suppliers send same-SKU shipments to dedicated hub stores.

Product variety is less of a concern, consumers just want to ensure they have supplies of important products. So then, packaging and assortment simplification can help to improve shipping speeds.

Fix the Gaps

When extraordinary measures are needed, then more resources are concentrated on expediting shipments. But, if your company is prepared for a major disruption, will you have to pay premiums to secure adequate supplies or raw materials?

From a future-proofing perspective, what gaps are slowing you down and how can you fix them with the right people, processes, tools, and data? How can you align your procurement and business objectives to protect your organization from crisis events in the future? Think of how customer spending, and demand, will be affected in various crisis scenarios. Make time to prioritize research to get a comprehensive picture.

What are the Financial Implications?

You want to ensure your inventory is located logistically, strategically, and within easy reach. Moreover, it should not be located in areas that are heavily impacted. Then, work with your HR and legal team to determine any financial impacts for not providing reliable supplies to customers and how to guide your team members correctly.

In Conclusion

Once we get to the other side of the COVID-19 pandemic, businesses will quickly fall into two categories: Those who have learned from the crisis and used those lessons to improve their procurement processes and those who like to gamble with their survival by not doing anything and hoping something like this will never come around again. Reviewing your supply networks, and making the right investments now, can ensure you don’t have to feel blindsided by the next crisis.

 

 

Mar 03
spend sieves

Eliminate Spend Sieves

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Eliminate Spend Sieves with a Three-Way Match

 

Your business is dynamic and fast paced, and you want to be on the move, getting the real work done. In this type of environment it is easy to think you can manage your organization’s purchasing decisions on the fly. After all, you know your business and your suppliers; transacting with them doesn’t have to be a big deal, right?

Well, maybe. As your business grows and adapts to an ever-changing marketplace your purchases of goods and services are changing too. They are becoming more complex, or higher in volume; maybe you need to expand your supply sources to keep up with customer demands. This is when you benefit from having a consistent, optimized purchasing process.

Costly mistakes can happen, and even seemingly small financial variances can leak through holes in weak process adding up to big bucks over time. How can you prevent wasted funds and risky deals? Document your purchases, for goods and services. Use a detailed purchase order (PO), perform a receipt, and ensure the supplier invoice matches the goods/services ordered and received before issuing payment. This process is called a three-way match, and it ensures you get exactly what you want from your suppliers at the price you agreed upon. Here’s how to implement this in practice.

Write a Detailed PO

For Goods:

Even if you know exactly which items will make up your total purchase, avoid entering one grand total on your PO. Create lines for each item. Include the quantity and purchase price per unit. Don’t forget to enter a line item for negotiated shipping or delivery costs.

For Services:

Just say “no” to one-line, lump sum service purchase orders. It may seem like the quickest way to get things moving, but if a deadline or deliverable is missed or delayed you won’t have an easy way to hold your supplier accountable.

Instead try breaking the service into milestones, for example: Kick-off, Release 1, Release 2, and Go-live. Include a deliverable date and milestone payment value for each. If your service is not project based, you can capture an hourly rate and a set number of hours allocated to the work each week or month. Even if you have a recurring monthly fee for a year of service, break that out into 12 line items so your supplier can invoice against each easily. This will avoid confusion on invoice reconciliation especially at month or year end. Don’t forget to include a line item for T&E if any work will be performed off-site or remotely.

Lastly, ensure expenses are approved at the appropriate authority in your organization before the PO is issued. If these costs need to be allocated to a specific cost center identify and record that detail now. Getting this approval up front helps projects run smoothly, ensures budgets stay on track, and saves time and confusion at the end of the project when the supplier is waiting for money for services rendered.

Confirm Receipt

Ideally the same individual who is ordering and approving payment for goods should complete this important second step. This is especially relevant for orders with long lead times or those delivered in multiple shipments.  The receiving process is your chance to call out any discrepancies before the invoice comes in making it much easier to adjust and avoid overpayment.

If you’ve built a milestone-based purchase order you can use this opportunity to check in and ensure the project is progressing as intended before issuing a payment.

Reconcile the Invoice and Approve for Payment

Ensure the supplier is invoicing for the same amount of money as indicated on the purchase order and as the goods/services received by you. If the expenditure is approved up front in the purchase order process and all relevant parties have confirmed the quality of the goods/services through the receipt, this should flow seamlessly and quickly allowing you and your supplier to get back to doing what you do best supporting and growing your business.

Executing a proper three-way match will ensure your strong relationships with your suppliers stay that way. You have more valuable work to perform than haggling over a missed deadline or chasing down details to approve an outdated invoice. You can consistently follow this simple process that will not only help you prevent lost dollars but will give you confidence that your operations are running smoothly, and save time spent on purchasing activities.

To make a three-way match flow even more seamlessly contact Premikati to learn more about how you can simplify your procurement processes.

 

 

Feb 11
procurement continuing education

Continuing Education Resources for Procurement Professionals

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5 Continuing Education Resources for Procurement Professionals

For procurement professionals to get ahead in their careers and help their companies succeed, continuing education can play a key role. From formal educational events specifically geared toward teaching professionals about certain procurement and supply chain topics, to news sites that help procurement professionals stay up-to-date on trending topics, to discussion boards where peers can share insights, procurement employees have a variety of options to help expand their professional knowledge.

Some of the key resources we recommend to continue procurement education include:

  1. SAP Business Exchange: In addition to being an SAP Ariba™ partner, we also participate in the SAP Business Exchange. In this online community, users can learn about and discuss expense management software SAP Concur, along with other procurement-related topics that may be broader than just Concur issues. The SAP Business Exchange also directs participants to upcoming events such as SAP webinars that can help procurement professionals learn new tips to help their companies operate better.
  2. Procurious: This social network is geared specifically toward procurement and supply chain professionals, thereby helping these employees quickly find relevant information. Among its numerous resources include online classes, community discussions and links to relevant events. Procurious also has helpful blog articles and shares top industry news, making it easier to stay up-to-date with relevant topics.

  3. Trade Associations: In addition to groups like SAP Business Exchange and Procurious that specifically provide educational resources for procurement and supply chain professionals, some trade associations also have procurement-related events and other resources that can help these professionals improve. For example, Premikati is a certified Women’s Business Enterprise National Council (WBENC) company, and we’ve found that organizations like this provide helpful events and programs, such as to learn how to boost supplier diversity programs. They can also be a great resource to learn where to find specific types of suppliers.

  4. LinkedIn Groups: LinkedIn has numerous resources for essentially any professional to learn and grow their careers, and procurement professionals havethe luxury to choose from a number of large, active LinkedIn Groups geared toward this occupation. The “Procurement Professionals – Best in class” group, for example, has nearly 400,000 members, and the “Strategic Sourcing & Procurement” group has over 100,000 professionals. Within these groups you can keep up with news shared by peers and discuss procurement-related issues to help you learn how to tackle occupational challenges.
  5. Premikati Webinars: We offer our own series of webinars in order to help procurement professionals learn about SAP Ariba™ as well as how to improve strategically overall. For example, upcoming topics include helping professionals ensure an invoice is ready to pay as well as how to identify vendor efficiency opportunities.

By leveraging these types of resources, procurement professionals and others in related roles can continue to gain knowledge beyond what they learn directly from their day-to-day work. Learning from peers and industry experts can help you gain new perspectives and learn new strategies that ultimately help you and your company perform better.

Jan 21
environmental social and governance

ESG and Your Supply Chain

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Why You Should Incorporate ESG Into Your Supply Chain

 

Companies that incorporate environmental, social and governance (ESG) factors into business practices can not only create more ethical companies that align with core values, but they can also enjoy a potential increase to the corporate bottom line. That’s because customers, employees, investors and other stakeholders increasingly want to associate with companies that consider ESG.

Taking these factors into account can unlock new opportunities in areas such as hiring by expanding talent pools to include diverse candidates; marketing by showcasing environmentally-friendly products to customers; and finance by making it easier to attract equity investments or take out loans by demonstrating sound governance. Becoming more ESG-focused can also extend beyond internal operations to include your supply chain.

As the United Nations Global Compact notes on its site, “A company’s entire supply chain can make a significant impact in promoting human rights, fair labour practices, environmental progress and anti-corruption policies.”

Aligning Values With Finances

While many companies may be open to incorporating ESG factors, they may think that doing so requires sacrificing profit. However, the tide is increasingly turning towards consumers seeking out ESG products and services, and many are willing to pay a premium.

For example, between 2013-2018, “products marketed as sustainable grew 5.6x faster than conventionally-marketed products,” according to an NYU Stern School of Business Center for Sustainable Business and IRI®study.

Moreover, 44% of Millennials believe that companies they do business with should always be environmentally-friendly, even if that causes a small price increase, according to a survey by Markstein, conducted by Certus Insights.

One way companies can improve their standing in this regard is to seek out vendors that align with ESG factors. Doing so can even be helpful for companies that sell services rather than physical products. For example, an accounting firm that uses environmentally friendly suppliers for office supplies, lighting, trash disposal, etc., may be able to more easily market itself as a green company and appeal to younger customers who want to work with a firm that goes beyond just focusing on finances.

Similarly, working with diverse suppliers such as women-owned, veteran-owned or minority-owned businesses can improve the social responsibility of a company by demonstrating inclusion and equality. Doing so is important considering that 70% of consumers “want to know what the brands they support are doing to address social and environmental issues,” according to the Markstein and Certus Insights study. And most of these survey respondents agree that social responsibility expectations apply equally to small and large companies.

Expand Your Supplier Network

Incorporating ESG factors into your supply chain not only helps attract stakeholders to your business, but looking at suppliers with this new lens can also expose your business to vendors that you may not have otherwise considered.

For example, looking at governance factors like the composition of a company’s board of directors or looking at how a supplier treats its own employees may cause you to spot risk factors with the vendors you currently work with. From there, you may decide to seek out new suppliers that stand out for incorporating ESG into their businesses, and these companies may be able to work with you on related initiatives like improving the sustainability of the shipments you receive from them.

One way to source ESG-focused suppliers can be through the consulting services or procurement platform of Premikati, an SAP Ariba™ partner and a certified Women’s Business Enterprise National Council (WBENC) company.

To learn more about how Premikati can help your organization incorporate ESG into your supply chain and improve your overall procurement, please get in touch with our team.

Jan 10
future of product shipping

Product Shipping and Procurement

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The New Era of Product Shipping

With the rise of e-commerce has come increased expectations around delivery service, including in both the consumer and B2B worlds. When a consumer buys a product online, even two-day shipping, popularized by companies like Amazon, is often too long now, which is why Amazon and others are turning to one-day or even same-day shipping in some cases. For businesses, similar expectations apply, as employees want their products like office supplies to arrive as fast as they do when making personal purchases.

As a Deloitte study finds, the future of shipping is evolving to one that attempts to meet higher demand and increase speed by taking advantage of technology. These tech advances range from data analysis for optimizing delivery routes to the use of smart storage lockers to improve the efficiency of the so-called last mile of delivery where packages reach their end recipients. Even drones are starting to be deployed, and an expanded presence could help improve speed.

While these advances offer significant potential for consumers and businesses to receive the products they need almost as fast as buying from a retail store, at the same time gaining the efficiency of online purchasing, the transition won’t always be easy for suppliers and logistics companies. Businesses will also have to adapt to obtain the efficiency their employees crave.

Navigating New Expectations

One example of the challenge of meeting new shipping expectations can be seen in the performance of FedEx. As Reuters reports, FedEx recently cut its 2020 profit forecast, due to factors such as investing in the rollout of Sunday delivery, and the company has not always been able to keep up with expected delivery times in major cities.

These types of struggles can challenge suppliers, as even if they’re able to absorb the cost of expedited shipping, their delivery partners may not always meet expectations. Overcoming these obstacles may require suppliers to work more closely with partners like logistics companies, such as through increased data sharing, to figure out how they can expedite shipping. As the Deloitte study notes, carriers partnering with their “most forward-thinking customers to build mutual capabilities could well serve both parties.”

For procurement teams, this new era may also benefit those who can form strong partnerships with suppliers to figure out the best ways to optimize delivery speeds. For example, limiting the number of vendors you work with and spending more with certain suppliers could give you more leverage to work out an expedited shipping schedule. Your suppliers may also inform you of how you can help them help you, such as by trying to place orders for different types of products into one batch.

Moreover, data-driven procurement teams can gain insights into delivery speeds and accuracy in order to help their suppliers understand what needs to be optimized. Procurement teams can also eliminate underperforming vendors and then limit their relationships to those who can meet delivery expectations.

Improving Procurement With Premikati

Understanding your procurement activities, including delivery performance and supplier relationships, can help your organization receive optimal service quality in this new era of product shipping. Leveraging procurement services and/or purchasing platforms through Premikati, an SAP Ariba™ partner, can help you gain the data you need to make better decisions related to shipping. Our consulting services can also help you work with suppliers to optimize delivery according to your needs.

To learn more about how Premikati can help your organization thrive in this new era of shipping, please get in touch with our team

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