12 Questions to Ask About Your Procure-to-Pay Processes
For today’s forward-looking distribution organizations, improving productivity is about improving core business processes. How mature are they? How efficient are they? How close are they to best practices?
Procure-to-pay – sourcing, planning, buying, receiving, payment – is a core business process that offers exceptional opportunities for optimization and integration. Ask these questions to evaluate the maturity of your P2P – and to know where you can make changes that will maximize efficiency:
1. Does your purchasing team have a sourcing database in a system (not Excel)?
2. How easy is it to buy from new organizations?
3. Do you have a system to forecast demand (sales) beyond “same as last year”?
4. Do you have a sales and operations planning (S&OP) process to discuss the forecast, and turn in it into an inventory plan (by month for at least 12 months), complete with agreed-upon service levels?
5. Do you have a vendor portal to communicate with suppliers?
6. Are you tracking vendor performance and, if yes, are your vendors improving?
7. Do you track inbound shipments by product and lot number?
8. Can you divert shipments without them ever crossing your dock doors?
9. Are more advanced receiving processes (e.g. license plating) part of your process?
10. How is quality maintained? When a customer calls with an issue? Or by established processes (e.g. receiving inspection)?
11. Do you have an automated three-way match for accounts payable?
12. Do you have a separate defined business process to work with drop-ship suppliers?
Software selection and implementation processes often present challenges of their own. To steer you around trouble and help you drive success, Ultra’s experts compiled a list of pain points and solutions to be aware of as you embark on this journey.
David has more than 25 years of experience helping mid-size and large manufacturing organizations and wholesale distribution companies leverage modern ERP technologies, optimize their operations and accelerate their business processes.