Automation

Why Most Supply Chains Need an Upgrade and What to Look for in a Solution

Why Most Supply Chains Need an Upgrade and What to Look for in a Solution

For mid-market companies still using manual supply chains, especially in Procurement/AP operations, now is a fantastic time to consider automating these time-consuming and error-prone practices.

Supply Chains Will Experience a Dramatic Shift

For example, a recent Deloitte study, “Charting the course: Why procurement must transform by 2020,” shows that procurement organizations are experiencing a dramatic shift that the study calls “eye-opening.” New supply chain capabilities and competencies will be mandatory for companies to stay competitive in the very near future. Organizations that fail to embrace new procurement models and technologies will fall further and further behind, jeopardizing overall competitiveness and viability.

At the same time, companies that acknowledge supply chain as a strategic asset achieve 70% higher performance, according to a PwC study. Companies that beat the competition on supply chain performance also achieve significantly better financial results. These “supply chain leaders” deliver on time in full (OTIF) on 95.7% of occasions and have impressive 15.3 inventory turns, while the rest achieve only 3.8 turns.

 

“Only 45% of survey respondents say their company views the supply chain as a strategic asset, and just 9% say the supply chain is helping them outperform their peers.”

 

What this means is that those companies are able to achieve increased efficiency and customer satisfaction without compromising working capital. These metrics directly affect the bottom line: the leaders in the survey enjoy average earnings before interest and taxes of 15.6% whereas the less successful only see 7.3%.

 

Supply chains: leaders vs the rest

 

Surprisingly and unfortunately, according to the same PwC study, only 45% of survey respondents say their company views the supply chain as a strategic asset, and just 9% say the supply chain is helping them outperform their peers.

There is a tremendous opportunity here for companies that make the switch. As shown above, supply chain efficiency has a measurable impact on company results – smart companies should be making a shift in that perspective sooner rather than later.

Take a look a recent blog post by Brad Huff, EVP of TAKE Supply Chain, on “The Cost of Waiting” for more insight into the missed opportunities of waiting to implement supply chain improvements.

Supply chain managers need to share this information with top management and ensure that the supply chain is understood to be a major elements in the success – or failure – of their company.

“There is a tremendous opportunity here for companies that make the switch…”

 

The Road to Procurement/AP Automation

So, your company realizes that your supply chain should be a priority and your procure-to-pay processes need an upgrade – where to start? As your company begins to explore the possibilities, there are some key qualities you will want to look for in a vendor and solution:

  1. Established vendor – It is always a priority to work with a vendor who has extensive experience in the supply chain field with reputable clients as references.
  2. Scalable – You will want a solution that is able to grow with your company initiatives and doesn’t lock you into legacy processes or require expensive modifications.
  3. Non-disruptive rollout – You will want your ongoing work to continue with minimal disruption during the rollout, so look for a vendor who makes that a priority:
    1. Ideally the majority of work should be managed and executed by vendor, with very minimal resources needed internally.
    2. The vendor should prioritize a quick deployment – a few weeks to a couple of months is the gold standard – not only to minimize disruption but to get your company to an ROI sooner rather than later.
  4. Flexible and Leading Edge technology – You’ll want a solution that can fit your needs today with minimal adjustments and can change easily as your business changes.
    1. Module-based – A solution that is broken into modules so that you are only required to implement those  to address specific pain points and thus not paying for un-needed functions or capabilities.
    2. SaaS solution – Cloud-based software enables lower upfront costs due to lack of hardware requirements and the monthly cost is an operational, rather than capital, expense.
    3. Includes BI dashboards – Solutions that include real time business intelligence will help support more accurate decision-making.
  5. Post rollout commitment
    1. Vendor does training and provides support for both internal team and suppliers for term of contract, making experts available to all users and minimizing drag on internal resources.
    2. Upgrades and maintenance handled by vendor, taking the burden off internal IT team.

The Supply Chain can help Drive your Company’s Future

Once your company understands the importance of the supply chain to overall business health, you don’t want anything to stand in the way of making the move to a more efficient and agile operation. Get the best of both worlds – an upgraded supply chain with minimal disruption – so that your company can focus on the future.

 

TSC-blog-shareTSC-blog-tweetTSC-blog-contact