pain sources
Based on our experiences, research and observations, there are common factors that mainly contribute to pains in managing procure-to-pay cycles for both Buyers and Supplier. Incredibly, many of pains in supply and demand chains can be traced back to the following three sources.
COMPLEX
COORDINATION
Many individuals are involved in a long chain of processes. Coordinating among internal units is already complicated enough, let alone with external parties.
MANUAL WORK
PAPERWORK
DOUBLE WORK
Manual Work, Paperwork, and Double Work are triple time-tested legacies more suited to old-fashioned businesses. But they just cannot keep up with today’s requirements.
INFORMATION
UNAVAILABILITY
In most cases, information without technology means much delayed information, and in many cases, no information at all.
pain areas
Some of the pain areas commonly encountered include the following.
INEFFICIENT
OPERATIONS
Low productivity levels due to disjointed IT systems (or simply lack thereof) and uncertain inventory levels resulting in over- or under-ordering are common problems.
ADMINISTRATIVE
PROBLEMS
Typical administrative issues including miscommunication, delays in execution, long lead time, and lost documents.
OUT-OF-VIEW
ACTIVITIES
Lack of reliable and delayed information are headaches in managing such key activities as buying decisions and vendor/customer management.
risks
Unresolved daily challenges could lead to much serious complications in running the business.
OPERATIONAL
RISKS
Human errors and failed processes may cause, for an example, increased delivery risks (accuracy, timeliness, quality).
FINANCIAL
RISKS
High HR expenses, costs of inventory, handling and leakage costs can create cashflow pressure.
STRATEGIC
RISKS
Difficulty in identifying & keeping the right Suppliers or Customers can lead to failure to achieve competitive edge and organizational objectives.