Moving from manual to automated supplier management in manufacturing

Manufacturing companies often face challenges associated with complex supply chain environments, which significantly impact the way they manage supplier relationships.  Procurement in these settings involves working with a variety of different supplier types, sometimes based in different global locations, which must comply with specified policies and timelines to provide widgets, components and services associated with the production of intermediary or final goods.

Supply chain efficiency is critical for maintaining effective manufacturing processes, for meetings supply commitments and for maintaining competitiveness, and one of the ways by which manufacturers can maintain effective processes is through the intelligent automation of procure-to-pay processes.

When interfacing suppliers around shipment matters, for example, manufacturers often manage interactions manually, using e-mail and phone calls for back and forth communications and relying on Excel files to track data.  This manual way of managing supplier interactions is time-consuming, error-prone, and overall inefficient, potentially leading to supply, and therefore manufacturing delays.

Automation could be an effective tool to streamline supplier communications, particularly by creating greater transparency around order scheduling, by automatically tracking and managing scheduling and following up on missing data or activities, by providing clear and automated guidance to both buyers and sellers around each individual process and its unique requirements, and by requiring compliance.

Not all automation tools, however, can demonstrate a reasonable return on the investment (ROI), nor can each of them effectively handle the complex nature of such interactions, which characterize manufacturing industries.  To manage this complexity, the solution must be able to view each process as unique, to apply to it the appropriate rules and policies, to ensure compliance, to identify and require the correction of errors and discrepancies, and to identify and manage disputes. 

Some organizations try to piece together automation solutions and procurement applications, but those do not provide end-to-end visibility and therefore have limited effectiveness.  To achieve optimal ROI, such solutions must be holistic in nature, viewing each process in the context of the entire set of procurement activities and the environment in which they play.