Manufacturing is an intricate and complex process involving multiple and various parts such as raw materials, WIP, machinery and equipment, logistics, inventory, demand planning, and the finished good. Besides the operational intricacies, the financial, managerial, and administrative processes also play a vital role in determining the value and profitability of a manufacturing firm.
Bringing in efficiency and productivity gains is highly important to ensure manufacturing firms stay profitable and relevant. Therefore, ensuring the alignment of different parts and processes of the operation spread across functions is critical to reduce costs, improve productivity, and increase revenues and growth.
Supply shortages due to demand surge for products, focus on survival with many manufacturing operations and weakening links in the supply chain due to operational and financial struggles are the key areas within manufacturing procurement processes that need to be effectively and efficiently managed.
Thus, organizations need to focus on business resilience using digital technology solutions that can scale on demand and be flexible & adaptable for manufacturing procurement processes.
Manufacturers need to re-think their procurement processes and supply-chain strategies by adapting to innovative and latest technologies.
Some of the key areas that procurement in the manufacturing industry can be optimized to align various operational functions and navigate their way ahead in the competitive landscape can be:
Spend Optimization: Most manufacturers see anywhere from 30% to 50% of revenues going to suppliers and partners due to complex business environments. Organizations with stronger balance sheets will be better placed to stay profitable. Procurement in the manufacturing industry needs to be aligned with category analysis and region-specific spending to reduce unnecessary expenditures.
ELIT Procure-to-pay (P2P) Cloud is an e-procurement software for the manufacturing industry that offers spending analytics to ensure optimal cost efficiencies and savings.
Agile Procurement Processes: Manufacturing procurement processes need to be agile, responsive, and adaptable with innovative and technology-driven planning methods to drive sustainability and productivity.
ELIT offers an effective Sourcing module that helps:
- Align supplier collaboration and define needs
- Order fulfillment criteria
- Performance metrics
- Comparative analysis of suppliers.
- Improved visibility into supplier capabilities, spending categories, and purchasing terms.
Streamlined Supplier Collaboration: Lack of actionable and access to timely responsive suppliers are at the core of manufacturing procurement inefficiencies. This can be mitigated by creating a robust supplier network and charting out effective channels to communicate in real-time to drive optimal responsiveness and a critical supply-sourcing pipeline.
ELIT eSupplier module helps with:
- Pre-qualification and rapid on-board suppliers
- Migrate existing supplier database
- Proactively manage supplier relationships
- Ensure regulatory compliance
- Continuously track and rate supplier performance metrics to improve and
- optimize procurement costs and timeframes.
Streamline Contractual Obligations: Manufacturing contracts can be complicated and require continual monitoring and tracking to ensure ongoing and planned activities are being managed effectively. Effective contract management helps reduce unnecessary costs and delays related to order fulfillment and meeting supply chain objectives.
ELIT offers a strong Contract Management feature that helps rapidly create standard as well as business-specific contracts with customizable components and workflows and helps ensure compliance.
Maximize ROI: Manufacturing firms can maximize returns on investments by aligning end-to-end supply chain processes from requisitions to invoice management and regulatory compliance and audits to track savings right to the bottom line.
ELIT Spend Analytics dashboard helps analyze and recommend key areas to reduce costs, optimize spending, and streamline the bottom line.
Every segment within the Manufacturing industry has its unique challenges and complexities. The common thread among them is the need to contain costs, optimize efficiencies, and seamlessly integrate multiple channels of productivity.
ELIT’s robust e-procurement software for the manufacturing industry helps address some of the unique challenges in manufacturing procurement processes in the following key areas:
- Operational Transformation
- Strategic Sourcing & Supplier Management
- Category Management
- Supplier & Procurement Analytics
- Supply Chain Transparency
- Supplier Collaborations
- Logistics Management
- Real-time communications
- Spend Analytics & Cost Reduction
- Category Utilization
- Supplier Performances
- KPI and Metrics Optimization
ELIT identifies three key areas where successful procurement processes in the manufacturing industry strike the right balance between short-term cost reduction and long-term optimization to drive efficiency and profitability.
|Supplier Collaborations & Engagements
|Gain better insights into supplier capabilities, cost structures, and fitment to ensure transparency and anticipate demand fulfillment
|Involvement in early-stage supply planning to reduce procurement costs and drive efficient spending programs.
|Make smart and justifiable purchasing decisions based on supplier performance criteria and categorization optimization without having to spend much time on the process.
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