E-Procurement in Manufacturing Industry

Manufacturing is an intricate and  complex process involving multiple and various parts such as, raw materials, WIP, machinery and equipment, logistics, inventory, demand planning and the finished good. Besides the operational intricacies, the financial, managerial and administrative processes also play a vital role in determining the value and profitability of a manufacturing firm.

Bringing in efficiency and productivity gains is highly important to ensure manufacturing firms stay profitable and relevant. Therefore, ensuring alignment of different parts and processes of the operation spread across functions is critical to reduce costs, improve productivity and increase revenues and growth.

Supply shortages due to demand surge for products, focus on survival with many manufacturing operations & weakening links in the supply chain due to operational & financial struggles are the key areas within manufacturing procurement processes that need to be effectively and efficiently managed.

Thus, organizations need to focus on business resilience using digital technology solutions that can scale on-demand, be flexible & adaptable for manufacturing procurement processes.

Manufacturers need to re-think their procurement processes and supply-chain strategies with adapting to innovative and latest technologies.

Some of the key areas that procurement in manufacturing industry can be optimized to align various operational functions and navigate their way ahead in the competitive landscape can be:

• Spend Optimization 

Most manufacturers see anywhere from 30% to 50% revenues going to suppliers and partners due to complex business environments. Organizations with stronger balance sheets will be better placed stay profitable. Procurement in manufacturing industry need to be aligned with category analysis and region-specific spends to reduce unnecessary expenditures.

ELIT Procure-to-pay (P2P) Cloud is an eprocurement software for manufacturing industry that offers spend analytics to ensure optimal cost efficiencies and savings. 

• Agile Procurement Processes

Manufacturing procurement processes needs to be agile, responsive, and adaptable with innovative and technology-driven planning methods to drive sustainability and productivity.

ELIT offers effective Sourcing module that helps:

1. Align supplier collaboration and define needs
2. Order fulfilment criteria
3. Performance metrics
4. Comparative analysis of suppliers.
5. Improved visibility into supplier capabilities, spends, categories, purchasing terms.

• Streamlined Supplier Collaboration

Lack of actionable and access to timely responsive suppliers are at the core of manufacturing procurement inefficiencies. This can be mitigated by creating robust supplier network and charting out effective channels to communicate real-time to drive optimal responsiveness and critical supply sourcing pipeline.

ELIT eSupplier module helps with:

1. Pre-Qualification and rapid on-board suppliers
2. Migrate existing supplier database
3. Proactively manage supplier relationships
4. Ensure regulatory compliance
5. Continuously track and rate supplier performance metrics to improve and optimize procurement costs and timeframes.

• Streamline Contractual Obligations

Manufacturing contracts can be complicated and requires continual monitoring and tracking to ensure ongoing and planned activities are being managed effectively. Effective contract management helps reducing unnecessary costs and delays related to order fulfilments and meeting supply chain objectives.

ELIT offers strong Contract Management feature that helps rapidly create standard as well business-specific contracts with customizable components and workflows and help ensure compliance.

• Maximize ROI:

Manufacturing firms can maximize returns on investments by aligning end-to-end supply chain processes from requisitions to invoice management and regulatory compliance and audits to track savings right to the bottom-line.

ELIT Spend Analytics dashboard helps analyze and recommend key areas to reduce costs, optimize spending and streamline bottom-line.

Every segment within the Manufacturing industry has its unique challenges and complexities. The common thread among them is the need to contain costs, optimize efficiencies and seamlessly integrate multiple channels of productivity.

ELIT’s robust eprocurement software for manufacturing industry helps address some of the unique challenges in manufacturing procurement processes in following key areas:

Effectiveness:

1. Operational Transformation
2. Strategic Sourcing & Supplier Management
3. Category Management
4. Supplier & Procurement Analytics

Engagements:

1. Supply Chain Transparency
2. Supplier Collaborations
3. Logistics Management
4. Real-time communications.

Efficiencies:

1. Spend Analytics & Cost Reduction
2. Category Utilization
3. Supplier Performances
4. KPI and Metrics Optimization

ELIT identifies three key areas where successful procurement processes in manufacturing industry strike the right balance between short-term cost reduction and long-term optimization to drive efficiency and profitability.