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A Day in the Life of a Supplier

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The recent COVID-19 pandemic has shined a light on getting back to the fundamentals within the supply chain. It’s really all about agility and alignment with evolving customer demands. Now, more than ever, it’s crucial for suppliers to have the ability to respond quickly with unexpected changes in demand. There may be spikes for certain types of products and shortages with others, just as we have seen firsthand during the COVID-19 crisis.

For instance, fear-based buying left most grocery stores with continuously empty shelves. Then, these stores started limiting the amounts customers could buy on specific products to alleviate the rapid shifts in purchasing habits.

Not to mention, since restaurants had to close, consumers spent more of their time and budget preparing meals at home. As a result, suppliers had to demonstrate their ability to offer varying products quickly and accelerate the speed of shipments even while many workers were choosing to stay at home.

Then, there is the flexibility factor. As everyone sheltered-in-place, grocers were no longer battling it out for the top spot in the grocery delivery business. Consumers quickly transitioned to shopping for their groceries online rather than battling it out in crowded stores with long lines. In real time, grocers – and suppliers – had to change their business models to meet this rising demand.

As you can see, suppliers certainly have their hands full and this will continue to be the case in the foreseeable future. So what does a day in the life of a supplier look like? Keep reading to learn more.

Wear multiple hats

A supplier may be involved with the planning and management of manufacturing processes. If so, this requires a jack-of-all-trades perspective since suppliers must also be involved in marketing, prospecting, sales, negotiations, accounting, shipping, and more. Invariably, this can be tricky during a pandemic.

To illustrate, the right goods must be produced efficiently, at the quality expected, and at the right price, then shipped/distributed expeditiously. Not to mention, a supplier’s clients may have evolving needs as well. Profitability can only be attained when productivity, and efficiency, are achieved in all of the above areas.

Provide quality products

Suppliers must ensure that their products meet the standard their customers expect. Not only does this help to retain their relationships, but also helps with referrals, reviews, and word of mouth. If a supplier offers multiple products, then the job becomes even more complex.

And quality isn’t just about the end product, it starts with the production engineers as well as the planners, controllers, and supervisors who ensure quality controls are all met before final output.

A typical day

Naturally, the scope of work will depend on the product/products being offered and/or produced. To start, there may be a walk around the manufacturing plan and production areas to ensure everything is in working order. If not, the right protocols are in place to fix any issues. Pay reports may be reviewed along with sales reports.

Next, the incoming orders will be checked along with their production and distribution progress. Details such as date, quantities, time, status, and more may be cross-checked against production.

After looking at incoming orders, a production meeting may be held with all necessary team members to discuss the work for the day and to draw up a production schedule. Some of the key talking points will be around deliveries, stock, revenue, quality control, and customer service.

Once a production meeting is satisfactorily adjourned, it’s time to look at inventory and any quality issues. In between all of these activities there may be client meetings, fielding phone calls, and responding to team member inquiries. Plus, there may be training for new team members and ongoing training for everyone else.

Moreover, another walkaround may ensue. Depending on the status of production, there may be fluctuations in the urgency of customer requests – especially in the event of a pandemic. So then, delivery performance reports will also be looked at very closely. Transportation routes may be optimized Suppliers always have to be prepared to address multiple projects at one time.

Marketing

Getting noticed is one of the hardest things for many businesses, including suppliers. Often, suppliers have to go well out of their way, with many potential clients asking them to register on specific vendor/supplier portals.

Once you’re in the portal, the potential client can see all of your details. There are potential customers who won’t even consider suppliers if they aren’t registered. Even if a purchasing agent wants to work with you, the head office may only allow payments to registered suppliers.

Unfortunately, registering in a portal doesn’t guarantee that potential customers will work with you. Registration is often a necessary but not sufficient requirement. Entering all of your information into a portal takes time and if you don’t hear back, it can feel like a waste of time. For this reason, some consider client-specific portals to be a black hole.

Yet to get on a single portal you may have to fill out a thorough application. In some cases, before you’re accepted you must also undergo an inspection or evaluation. Inspectors may want to examine personnel, your facilities and equipment, quality assurance measures, production, and more. And no matter how hard you work, there’s no guarantee you’ll pass.

Given that there are over 2,000 supplier portals in the United States and 3,000 globally, it’s easy to see why so many suppliers are jaded. Registering for each portal would consume a lot of labor hours. Meanwhile, companies are trying to manage social media, run adds, produce content, and drum up leads.

In terms of other marketing tactics, many suppliers send staff to trade shows and conferences. Other staff members are on the phone, cold calling leads, following up with potential customers, or trying to pin down a specific customer’s needs. And all of these campaigns generate data, which someone has to analyze. In other words, a company may lack the manpower to register in each portal.

Of course, even resource-strapped companies may try to register for portals. The question then is which portals to register for? With thousands of options, it’s smart to prioritize the ones that will lead to the most leads. There’s no easy answer. A popular portal may seem to offer the most leads but competition is high. A lesser-known portal may offer fewer leads, but also competition.

While portals present challenges, they also present opportunities for suppliers, and ease for companies looking for suppliers. A portal makes it easier for the hiring company to find and verify the right supplier. Some companies prioritize certain suppliers, such as local companies or diverse suppliers. By setting up a portal specifically for these suppliers, companies can find exactly who and what they need.

Portals may also make it easier to manage relationships. These days, suppliers, buyers, and internal users may all collaborate and interact. The right portal empowers these relationships and allows for more optimized delivery of products and services. Increasingly, systems are automated as well, sending notifications, executing calculations, and more. As such, getting noticed as a new or small supplier can feel like a full-time job.

Take away: Collaborate and learn

Another aspect of a day in the life of a supplier is finding other suppliers who can serve as partners so that everyone can be more resilient and better prepared when a crisis hits. It’s always important to collaborate with other suppliers who can share relevant knowledge and products to make up for any potential shortages. Out of the many hard lessons learned from COVID-19, the most vital ones are that agility, flexibility, and efficiency are the keys to survival.

 

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. 

 

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 light of the COVID-19 pandemic 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. Schedule your free demo today.

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.

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.

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!

 

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.

 

 

BPO for SMB

Procurement BPO for SMBs

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SMBs Can Leverage BPO to Improve Procurement

As important as the procurement function is for companies to purchase the products and services they need in a compliant, cost-effective way, many businesses face the challenge of dedicating enough resources to procurement.

Fortunately, procurement doesn’t always have to be managed in-house. Just like other functions ranging from accounting to marketing to technical support can be outsourced to third-party partners, many companies — especially small and mid-sized businesses (SMBs) — benefit from leveraging business process outsourcing (BPO) for procurement.

Save Time and Money

Outsourcing procurement to a trusted partner can free SMBs up from challenges such as:

  • Finding qualified procurement staff
  • Implementing and managing procurement technology
  • Sourcing vendors
  • Analyzing spend
  • Assessing procurement risk

SMBs may also be able to customize their BPO relationships, so if they do want to be in control of analyzing areas such as spend through their in-house finance team, they can still benefit from letting their BPO partner focus on areas such as vendor risk management.

By not having to dedicate the resources to all of these areas, companies can save approximately 30% of their time and money, as employees can instead focus on core business functions such as sales.

Gain a Competitive Advantage

In addition to saving time and money through BPO, companies that outsource procurement can often gain competitive advantages by leveraging the expertise of their BPO provider.

Across outsourcing as a whole, beyond just procurement, a Deloitte survey finds that cost optimization is no longer part of the top-five criteria for outsourcing. Instead, companies are more often turning to outsourcing to gain a competitive advantage. In 2018, 49% of organizations moved more services to outsourced providers that innovate, compared with 20% in 2016, so this is becoming increasingly important.

With procurement BPO, service providers can help your organization innovate in many ways, such as helping you gain the products and services you need to target new market segments. A procurement BPO provider can also help you gain spend insights that can inform overall budgets and help you find innovative ways to reduce costs, such as by procuring technology tools that have a lower total cost of ownership over their lifetimes.

Elevate Your Procurement With Premikati’s BPO Services

Premikati is one of only six SAP® Ariba®BPO partners, and we have the experience and technology to handle your procurement needs. Leveraging SAP® Ariba®as the underlying procurement platform, combined with our in-house expertise, we can quickly help SMBs gain the services of a full procurement department in a cost and time-effective manner.

As you focus on your organization’s growth, we can provide the procurement support you need to scale up while staying on budget. And over time, if you decide to bring some procurement functionality in-house, we can adjust our service offering to meet your needs so that procurement can always be a source of strength for your organization, not a burden.

To learn more about how Premikati can lift your procurement capabilities through BPO, please get in touch with our team.

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.

 

 

procurement automation for smbs

Procurement Automation: Best Bet for Growth for SMBs

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Procurement Automation: Your Best Bet for Growth

Is there a way to optimize your procurement processes without having to make a massive investment in IT? Can you eliminate manual processes and their associated errors? Is there a way to eliminate expensive invoice processing?

It goes without saying that procurement processes can involve a wide variety of third-party vendors such as business partners and consultants, along with legal, supply chain management, and various department needs. Yet, data can be difficult to locate and the success of a procurement process may simply revolve around the fact that no one complained – yet.

Unfortunately, many SMBs spend a large portion of their sales revenue on procurement. Nonetheless, simple enhancements – such as automation – to the procurement process can perform the double duty of reducing costs and boosting productivity.

For SMBs, with their limited resources, the focus is often on overarching operations as opposed to specific procurement business functions. But, when you can empower your procurement team with an automated tool, then you can improve supplier relationships and make the right purchases for your business – on a more consistent basis. Further, all parties are satisfied.

When you utilize automated procurement, you can prevent your teams from engaging in trivial tasks so that they have more time to focus on their core functions and responsibilities. Also, you decrease human error.

Certainly, these are all specific reasons why many SMBs are opting for automating procurement, but there are many other advantages as well. Keep reading to learn more. 

Get Out of the Time Rut

Within the procurement cycle, or purchasing cycle, there are several stages such as research, bidding, vendor selection, negotiations, and approval. Depending on the current processes you already have in place, this can take much more time than necessary.

Why not speed up your processes with procurement automation? You could reduce the cycle by days, or even weeks. If you’re interested in adopting lean principles, automation would be the route to take. 

Plus, there are huge amounts of paperwork that needs management. In contrast, procurement automation can save time by transitioning documents from paper to digital. Not only do you save on paper and physical storage costs, but you inherently speed up all your cycles and processes.

Get Your Supplier Relationships on the Same Page

For the health of your SMB, it is vital to have strong supplier relationships. Although, this can be difficult in a highly competitive environment. To get there, you need true transparency. The good news is automation enables real-time interaction and order tracking. In addition, an automated system lets your suppliers respond more quickly and your company can select a supplier more quickly. Moreover, the process is transparent for all parties involved which means a much faster resolution process in the event of a complaint or misunderstanding. It is a win-win situation for all.

Monitor Every Interaction

When your company opens up a bidding war, this means you increase your chances of finding a vendor who can meet your budget. At the same time, it can get quite complicated to manage every interaction with all of your potential vendors. Further, no one likes filtering through hundreds of email messages trying to find the most recent interaction. Unquestionably, this is a scenario where mistakes can happen and messages will get missed.

With an automated procurement tool, you can quickly access all associated documents and RFP responses. In fact, you can even monitor every single interaction in real time.

Enjoy More Control

SMBs often face the daunting challenge of limited visibility during one-or-many stages of the procurement process. Invariably, low visibility can become even more prevalent during indirect procurement. One of the quickest ways to overcome this hurdle is with an automated procurement tool.

It’s imperative to have a visual representation of how much you’re spending on every purchase. Many SMBs have finite resources which means it would be quite beneficial to determine where you could cut back on expenditures. As a result, you feel more control over your budget and can improve your revenue outlook.

How Can You Tell if Your Procurement Processes are Ready for Automation?

Part of the decision-making process around an automated procurement tool is knowing which of your tasks are ready to be automated. So then, it is critical to execute a thorough assessment – and analysis – of your current processes and which are redundant/repeatable where automation can take over to save both time and money.

For instance, if your company requires a lot of legal input during the buying process, then you could automate this portion by utilizing pre-approved negotiations so that your legal team can focus on higher-level tasks.

There isn’t any reason why the SMB procurement process should not replicate the enterprise in terms of purchasing, employee training, and automation. SMBs want to grow, and automated buying practices help to provide transparency, facilitate tracking, offer convenient reporting, and most importantly, assist in managing costs to set the stage for expansion.

Final Thought

Searching for a comprehensive automated procurement tool to effectively manage your processes? When SMBs streamline how they purchase goods and services, they create more value and become an organization that vendors – and customers – enjoy.

Learn how an automated system can streamline your procurement process – contact Premikati today for a free consultation!

 

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