Procure-to-Pay: The latest in indirect procurement?

procure-to-pay
June 18th, 2019
Share :
{{totalComments}} comments

Procure-to-Pay (P2P) is a solution that involves digitising procurement processes.

According to Ian Moyse, a process digitisation expert and a member of the Cloud Industry Forum [1], to simplify the supply chain we must approach each purchase category using an appropriate optimisation methodology.

Ian Moyse looked at Procure-to-Pay's promises regarding indirect procurement, and more specifically Manutan's solution. This Procure-to-Pay solution allows us to cut the overall cost of companies' class C purchases by a third [2].

To assess the relevance of Manutan's Procure-to-Pay solution, Ian Moyse answers three questions:

What are the potential savings for indirect class C purchases?

Class C purchases account for an average of 5% of direct spending, but 85% of the total items, 75% of the suppliers and above all 60% of the volume of.orders.
At a company-wide level, committing to the optimisation of class C purchases is lucrative. It also helps streamline the number of suppliers and therefore the cost of managing them.

As this is still a fairly new approach, companies that have made this commitment have a competitive advantage.
Furthermore, the low unit cost of class C products does not detract from their significant contribution to effective business operations. For example, although the cost of de-icing salt is relatively low, a loading area covered by ice—due to a lack of salt—can compromise shipments and therefore have serious financial consequences.

Having a Procure-to-Pay solution is therefore a strategic advantage.

What is the principle of Manutan's Procure-to-Pay solution? 

Companies can rely on a dedicated digital solution, which aims to save them significant amounts of money and streamline their class C purchases. To cut the Total Cost of Ownership (TCO) by a third, Manutan digitises everything that can be digitised:

  • Access to the product catalogue included in the contract
  • Purchase request approval workflows
  • Orders
  • Delivery
  • Invoicing

The Procure-to-Pay solution for class C purchases also integrates management functions, namely monitoring contract compliance, reporting and analytics. Accessible in SaaS, Manutan's Procure-to-Pay solution is up and running in just a few hours.  

What makes Manutan's Procure-to-Pay solution innovative?

1. Manutan's Procure-to-Pay solution overcomes the hurdle posed by data structuring

It is estimated that 80% of data relating to class C purchases is unstructured [3]. The dispersion of the purchases concerned and the low attention that companies generally pay them explain the magnitude of the challenge. Collecting, structuring and analysing the data relating to the thousands of transactions made is a much more arduous task than for class A or B purchases. However, the potential benefits explain why companies are addressing the issue of class C purchases. Manutan's Procure-to-Pay solution for class C purchases meets this need.

2. Manutan's Procure-to-Pay solution helps you go further

Without data structuring, optimisation often consists of simply reducing unit costs, with the proven and counterproductive risk of negatively affecting quality and lengthening delivery times. Manutan's Procure-to-Pay solution allows you to go further in optimising procurement processes by streamlining inventory, removing silos and improving demand forecasts.

3. Manutan's Procure-to-Pay solution offers the potential to cut costs by a third

Manutan has developed a revolutionary approach based on data structuring. Its repository of around 100 sets of international data is used to establish improvement measures that apply to all companies.

Using easily understandable key indicators, Manutan is able to offer its customers significant optimisation of their class C purchases. Manutan's Procure-to-Pay approach involves analysing purchasing behaviour, comparing this to the repository and using this to establish an operational and quantifiable progress plan.

Although they may appear modest, the savings generated by optimising class C purchases are considerable and deserve special attention. Manutan is able to offer a simple and original Procure-to-Pay solution using the Cloud.

 

[1] The Cloud Industry Forum's mission is to represent the interests of user companies with software publishers operating in the Cloud and digital service companies.

[2] Class C purchases include all products and services that companies need infrequently or on an ad-hoc basis.

[3] Manutan white paper — Indirect purchases: Six ways to optimise your strategy.