Sourcing Snapshot - Subject Matter Expert Insights into P2P Processes
As part of a research study, a number of senior procurement executives from a variety of different industries were interviewed to get their responses to the same problems associated with the P2P cycle. Each of these individuals provided a different perspective on how to improve the P2P process, but some common themes validated many of the vendors’ suggested recommendations as well.
ROBUST PROCESSES AND TRAINING
A critical element identified by all of the subject-matter experts was the need to develop standardized processes and training around the P2P process. Specifically, roles and duties of the different people involved in the process must be clearly defined, training should emphasize how invoices and requests should be processed, and the reasons why deviation from the process is unacceptable as well as what the consequences for deviating are should be explained. This ensures that everyone not only is compliant, but understands the need and rationale behind the compliance. Part of the process redesign effort should also focus on simplifying processes to reduce complexity. If there is no need for a specific channel for purchasing, then eliminate it.
ON-SITE RELATIONSHIP MANAGERS
An important point that many respondents noted was the need to establish dedicated roles around on-site relationship managers from procurement who were on site to manage invoices, service entries, and the like. The simple fact is that many maintenance and project managers do not think in terms of procurement, but rather are focused on people, equipment, and schedules; they do not have the time or patience required to ensure that the correct entries are put into a P2P system. The relationship manager can also act as the liaison between the supplier and the maintenance organization, to ensure prompt payment, resolution of issues, and improvement of processes.
SIMPLIFIED ONLINE PORTALS TO MINIMIZE HUMAN INTERVENTION
A number of SMEs described the need to eliminate the manual intervention of multiple untrained individuals in entering information into systems such as SAP. Many ERP systems have modules for purchasing and plant maintenance, but they all require significant configuration. On the other hand, a number of bolt-on packages are also available, but our SMEs advise against these because of the high probability of interface issues associated with deployment.
IMPROVE FORECASTING FOR MAINTENANCE AND PLANNING FOR EMERGENCIES THAT CAN FLEX WITH DIFFERENT SITUATIONS THAT ARISE
The need to improve forecasting processes is a critical element in ensuring that maintenance needs are met. Although maintenance is often an emergency, there are many scheduled maintenance activities that can be planned and communicated to suppliers. Even in emergency situations, having a plan in place with a designated supplier can avoid many of the problems that occur downstream in the P2P cycle. Too often, data, invoices, service entries, and other key elements are entered incorrectly as a result of a fundamental lack of planning and forecasting. These elements need to be incorporated into the design of new P2P systems.
REDUCE COMPLEXITY IN CATALOGS AND BUYING CHANNELS TO STREAMLINE PROCUREMENT
Many of the experts also emphasized that the need to reduce complexity in the interface systems through pre-defined procurement buying channels is critical to improving the entire P2P cycle. There is no need for users to have multiple channels for procurement. However, establishing the credibility for users to be able to use only these channels also requires significant management support.
Source: R. Handfield, “Best Practices in the Procure to Pay Cycle,” Practix, March 2006, Center for Advanced Purchasing Management, http://www.caps.org