Optimizing direct procurement and inbound supply involves more than just refining procure-to-pay processes. It encompasses creating a real-time, collaborative relationship between manufacturers, suppliers, co-manufacturers, logistics providers, and customers to optimize decision-making, enhance resilience, and unlock significant business value.
To achieve world-class performance in direct procurement, businesses need a comprehensive platform that:
- Orchestrates Inbound Supply: Manage raw materials, intermediates, parts, and components from supply to final assembly, including workflows for forecasting, planning, collaboration, execution, and delivery. The platform should offer early detection alerts for material and logistics issues and facilitate their resolution.
- Correlates Transactions: Provide control and visibility over the entire transaction lifecycle with integrated procure-to-pay services, combining purchasing, logistics, and financial operations into a unified environment.
- Propagates Demand: Efficiently propagate demand from finished goods back to upstream tiers, computing net requirements based on stock and replenishment policies to generate accurate order forecasts.
- Reallocates Inbound Materials: Dynamically plan and execute material replenishments according to real-time data, reducing shortages and ensuring timely supply.
- Matches Deliveries with Requirements: Enhance precision in supplier instructions and performance tracking to align shipments with actual needs, improving accountability and reducing inventory violations.
- Integrates Transportation: Ensure a responsive, real-time platform for material supply, reducing transportation costs by optimizing container and shipment use and minimizing expediting costs.
- Collaborates with Logistics Providers: Provide end-to-end, real-time visibility for materials and logistics planners, integrating global trade document management, milestone management, and shipment visibility.
Inbound Supply Challenges
Manufacturers face challenges like high inventory costs, critical out-of-stock situations, and long information lead times with suppliers. Addressing these issues requires an agile, resilient supply process with efficient supplier onboarding and the ability to adapt to demand shifts and external disruptions.
Financial Benefits
Key financial benefits of optimizing direct procurement as described can typically include:
– Inventory Reduction: Decrease network-wide inventory by 20-40%.
– Capacity Throughput: Improve by 10%.
– Freight Cost Reduction: Lower expedited freight costs by 30-50%.
– Staff Efficiency: Increase by 20-40%.
Our Solution
Valverus provides solutions and leadership to meet these requirements through transforming your multi-party, multi-tier visibility and collaboration in areas such as demand management, global demand/supply visibility, multi-tier supplier collaboration, replenishment planning, and vendor-managed inventory services. The platform enables real-time, end-to-end supply chain optimization, ensuring a seamless integration of procurement, logistics, and financial operations.
Case Study:
A recent medical device manufacturing client reduced lead times by 20% and achieved a 28% inventory reduction, significantly exceeding initial targets. This led to reduced shortages, lower expedite costs, improved on-time delivery performance, and higher service levels at reduced costs. Their newly engineered multi-tier network visibility and synchronized ERP systems provided a single version of the truth, benefiting both the client and their supply base.
In conclusion, optimizing direct procurement through real-time, collaborative platforms with support from Valverus can transform supply chain management capabilities resulting in significant operational and financial benefits.
Contact us today for an assessment of how we can help you create value.
