Enterprise Concept’s Procurement Management Solution for Retail enables full transparency in the procurement – ordering – delivery – financial transactions flow, thus enabling the client – the biggest retailer on the EU market – to consolidate purchasing and enforce the correct workflow and logistical consolidation to optimize the cost and quality for sourcing.
- Attaining accurate and complete visibility of spend across company;
- Leveraging scale across diverse divisions and operating groups (purchasing power);
- Segmenting spend and applying the appropriate category management and sourcing strategy to each category (Centralized, Central-Led, Decentralized);
- Outlining clear ownership, accountability and fiscal responsibility around spend management;
- Driving efficiency and effectiveness of procure – to-pay processes and clarity of roles and responsibilities;
- Managing risks associated with poorly-written contracts;
- Controlling spend and ensuring contract compliance across the organization.
- The complete elimination of paperwork and paperwork handling;
- Productivity increase of 80% in terms of processing purchase orders and invoices;
- Time between need recognition and the release and receipt of an order reduced by up to 40 days;
- Cost savings;
- Reduction of errors and elimination of paper leads to lower operating costs;
- Performance Monitoring and Management;
- KPI monitoring, effective workload balancing;
- Improved communication both within the company and with suppliers.
PHASES - APPROACH
Defining business concept and creating the application involved the following steps:
- Business Analysis;
- Implementing and integrating systems;
- User Acceptance Testing;
- User trainings;
- Go Live support;
- 24/7 Maintenance.
Enterprise Concept worked with the retailer to select, configure and implement BPM to optimize their value chain, thus having a direct impact on:
- Sourcing and Procurement Transformation;
- Spend Analysis and Opportunity Assessment;
- Strategic Sourcing;
- Procure to Pay Process Improvement;
- Contract Management and Compliance;
- Supplier Management and Partnering Programs;
- Governance and Organization;
- Technology Enablement.
ROI 3 months after GO-LIVE
Contract compliance has improved more than 80% overall. Just as importantly, the higher compliance rate has been sustained.
The system has also streamlined the client’s procurement process, allowing the company to capture more detailed spend information, enhancing spend analysis.
Manual purchase orders have been eliminated, allowing the retailer to reduce headcount or reassign resources.
Operation expense was reduced from 0.95% of total spend in 2009 to 0.35% in fiscal year 2010.
- COST of processing 1 invoice: 1,80 EUR;
- Clearing orders team: 25 people;
- TIME for processing an incorrect invoice: 30 days;
- TIME for processing a correct invoice: 2 days.
- COST of processing 1 invoice: 0,70 EUR;
- Clearing orders supervisors: 2 people;
- TIME for processing an incorrect invoice: 2 days;
- TIME for processing a correct;
- invoice: 1.5 minutes.
- Provided spend and supply information that enabled the supply base to be rationalized from in excess of 5,000 suppliers to less than 100;
- Developed strategic business relationships and close contract management of first-tier suppliers;
- Implemented an industry-standard consumables catalogue order placement system that connected the client’s requisitions with suppliers via the Internet;
- Reduced inventory stock value level.