Technology

Procurement's value will be judged on its alignment with the organisation's strategy

 

ShirazSarang.jpgIs your procurement division a purchasing or a procurement function? More importantly, into which category does your CEO and other key executives place your function? Shiraz Sarang, CPO at Nedbank discusses how procurement professionals can elevate the importance of the procurement function within an organisation, in this month’s SmartProcurement.

Five ways to streamline your procurement

 

IanHendry2.jpgRunning a successful business is stressful. Very stressful, in fact. Arguably the biggest challenge facing chief procurement officers and procurement managers is cashflow. Ensuring that you have the right stock levels without sacrificing pricing, or incurring wastage, will go a long way in alleviating month-end pressure. Open communication between the procurement- and finance departments will more than likely prevent crises of oversupply.

In this month’s SmartProcurement, Ian Hendry - Corporate Card Product Manager at Nedbank Corporate Card - explores five ways to help you streamline your procurement process, and improve your procurement function.

The Future of Procurement - 5 challenges to the profession & strategic function

Jeremy_Kirsten.jpgJeremy Kirsten, MCIPS, puts pen to paper about where the procurement profession has come from, and where it is going.

Procurement as a profession is, I believe, in its infancy, as it only came into its own in the late 1980’s. Its growth from the mid 1990’s to date has been phenomenal. When I first started working, purchasing was not always carried out by professional purchasing officers, but by others that may have inherited the function. During this time, a new concept ‘Materials Management’ arose.

P-Cards' detailed transaction information unmatched by corporate cards

IanHendry2.jpgIf you think a P-Card gets its name from the material with which it’s made, think again…

A P-Card or purchasing card is a charge card that allows the cardholder to purchase high-volume, low-value purchases without going through the hassle, and incurring the exorbitant costs, of generating a purchase order.

With an ordinary CorporateCard, the amount of information reflected in the statement is fairly simple. You’ll see the date of transaction, the name of the supplier and how much was spent. But procurement staff need far more detail, which is why purchase orders are generated and invoices retained, says Ian Hendry, Corporate Card Product Manager at Nedbank Corporate Card.

When processing an invoice costs more than the purchase... P-Card is your answer

IanHendry2.jpgIf you’re spending 80% of your effort processing purchase orders for 20% of your spend, it may be time to change tactics.

You can deliver real savings by diverting low-value, high-volume transactions through a Purchasing Card or P-Card, ideal for companies that want complete visibility and control of their spend, and also need to streamline their purchasing processes, says Ian Hendry, Corporate Card Product Manager at Nedbank Corporate Card.

SAP functionality can relieve the pinch of your procurement group's rationalisation

 

StevenFreemantle2.JPGReducing costs is a common survival strategy for organisations to employ. But, as the economic situation deteriorates, what started as a doing away with coffee, printing paper or non-essential spares becomes organisational restructuring, which may translate into job cuts. Purchasing departments have not been spared the distress of this kind of cost management, yet are still required to maintain (strategically) the service levels needed to keep customers satisfied.

Having seen many forms of cost reduction over the years (as an advisor in SAP supply chain optimisation), Steven Freemantle notes that staff reductions are seen as an accepted, albeit hugely disruptive, strategy to weather the storms of uncertain economic times, and like many strategies, there is often a disconnect between strategic intent and the day-to-day tactical activities.

“Staff are often thrust into new or different supply chain roles where they quickly become overloaded, however, if you run SAP this kind of painful organisational change can be soothed in many ways – there are SAP tools to effectively do 2, 3 or 4 people’s jobs,” says Freemantle, from SweetThorn Thought Leadership, in this month’s SmartProcurement.

Forget cost management - think 'value management'

 

value_management.jpgIn tough economic times, management may take a ruthless approach to various areas of the business where they perceive costs as being too high. For example, they immediately cut the marketing budget – when in fact marketing may be more critical than ever before. Or they trim down expenditure on IT systems, when investing in more streamlined IT processes can quickly turn into a cost saving.

Typically, costs within a company are being divided into pure operational costs - but these, in themselves, have massive indirect costs (head office expenses, FICA [for banks], IT, etc.). But in taking this approach, businesses usually have little to no idea of what the true cost to provide their service/product is.

Procurement department change management - are you doing it the right way?

 

StevenFreemantle2.JPGThe old adage “the only constant is change” may never have been truer than in today’s economic uncertainty. Amid constant calls to reduce operating costs, purchasing departments will be challenged to do things differently – centralise, decentralise, rationalise, even outsource. If your organisation has SAP (or any ERP system for that matter), these kinds of changes can more easily be managed by exploiting the functionality you already own to measure the adoption of any significant change in the way buying functions. In this month’s SmartProcurement, Steven Freemantle, of SweetThorn Thought Leadership, discusses how to use your SAP system to facilitate change.

R3 600 - the cost of a purchase order in government

 

NhlanhlaNene.jpgThe central procurement office (CPO) created by Treasury to leverage volumes in the government has already led to savings amounting to billions of rand, says Finance Minister Nhlanhla Nene.


"The cost of a purchase order will be reduced from approximately R3 600… to between R500 and R750 using the new technology platforms,” said Nene, in a written reply to a parliamentary question by Democratic Alliance MP Malcolm Figg.

Improving transparency in government procurement through technology

 

MoritzBotha.jpgTransparency is one of the most effective ways to increase price competitiveness among suppliers, resulting in lower purchase prices, if implemented correctly.


Moritz Botha
, Director: eTendering at National Treasury, discusses the use of technology to achieve these goals in this month's SmartProcurement.

Getting control of your SAP procurement lead-times (we all know they're rubbish...)

 

images.jpgIt is not unknown that suppliers’ lead times from suppliers as well as internal procurement’s processing lead times are critical in determining the amount of inventory you need to keep: the shorter the lead time the less you need to keep, the longer the lead time the more you need to keep. Even more obvious is that those in your organisation who determine your stocking strategies will need to know exactly what these lead times are.


But this is not always obvious, writes Steven Freemantle, of SweetThorn Thought Leadership, in this month’s SmartProcurement. In fact, it is his experience that many SAP-driven supply chains have lead times that are inaccurate, inflated and often generalised.

e-Procurement powers supply of Flowers through local suppliers

 

nick2-web.png An e-Procurement platform that connects sellers of flowers with purchasers through a number of unique and interesting features and capabilities has been launched by SA Florist. "World-class technology aside; at the core of the business is the relentless pursuit of community upliftment, championing the underdog and providing artisans with equal access to customers that they would never previously have thought possible,  Nicholas Wallander, Managing Director SA Florist, told SmartProcurementI.

 

Change Management key for mastering SAP Supply Chain & Procurement

 

Thumbnail image for Thumbnail image for StevenFreemantle2.JPGIn this month’s SmartProcurement, Steven Freemantle, of SweetThorn Thought Leadership, discusses how to combine three traditional approaches in a non-traditional way to achieve SAP Supply Chain Mastery. Mastery of your SAP systems contribution to procurement’s and therefore your supply chain’s success is not as complex as one may think. Freemantle refers to a methodology he calls Business Maturity Optimisation, which is a combination of three traditional approaches to SAP mastery, namely training, education and change management.

Leveraging the efficiencies of payment cards to manage travel

 

Corporate-Cards-Not-Just-For-Travel.jpgTravel and Entertainment (T&E) is a critical expenditure category for nearly all organisations. Typically, it is the second largest controllable expense after salaries and benefits. In all cases, however, it is no longer regarded as best practice but essential practice for a successful T&E programme to deploy a corporate card, advises Master Card in this month's SmartProcurement.

Streamlining P-Card purchases with new technologies - Part 1

 

AnitaCarolus.jpgWhen looking at the Kraljic model, where purchasing card (P-card)-type purchases can be categorised as non-critical items, a new trend has emerged that further streamlines the purchasing of low-value, high-volume items, as well as other ad hoc items.


This new trend is online marketplaces and e-catalogues, says Anita Carolus-Opperman, Nedbank Corporate Card National Sales Manager, in this month’s SmartProcurement.

7 SAP procurement automation tips to maintain plant uptime

 

StevenFreemantle2.JPGWith companies constantly striving to maximise output and reduce operational costs, the days of parts and materials planners having their own personal buyer are long gone. Centralised procurement is quite the norm. Often in these environments one hears that “when the buyer sat next to me we never had the issues around material and parts availability that we now have since procurement was centralised. I don’t even know who my buyer is, or where they sit, and most of them don’t even know what it is I want them to buy.”


However, if you are using SAP, it should provide the sense that the buyer is sitting in the office next door, writes Steven Freemantle of SweetThorn Thought Leadership, in this month’s SmartProcurement.


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