How a Modern Supply Chain Network Simplifies Global Direct Procure-to-Pay Processes

A modern supply chain network controls complexity of direct procure to pay for global supply chains.

Direct Procurement has become more complex than ever before. Global volatility, increased regulations and increasing costs all add to the many shifting factors that supply chain professionals must try to orchestrate. Fortunately, a modern Procure to Pay Supply Chain Network provides a highly effective solution for optimizing the end-to-end journey of goods. 

Direct procurement involves the acquisition of goods and services directly related to the production process, while Indirect procurement covers the purchasing of goods and services necessary for the smooth operation of a business but not directly tied to production. Direct procurement often involves long lead times, high value shipments, cross-border movement of goods and a global supply chain with a larger number of participants involved in the sourcing, manufacturing, verification and transportation of goods. These factors make Direct Procurement inherently more complex than Indirect Procurement, which typically involves domestic suppliers, local fulfillment and lower-value transactions.

Due to the complexity and importance of Direct Procurement, companies often spend significant effort in managing the Procure to Pay process of these transactions. Communicating Order details, tracking the on-time delivery of goods, verifying the quality of the goods, ensuring the goods are packaged and shipped in accordance with the PO terms and ultimately paying the suppliers all require a coordinated effort of many people both within the enterprise as well as throughout their global supply chain. Although many companies have both ERPs and portals, both fall short on managing the complexities of international direct procurement; ERP systems are typically only involved in this process within the enterprise’s four walls and portals struggle with managing the varied documentary requirements and the effort required to add a new network participant.  

So how to manage this complex process? Many best-in-class companies have implemented Supply Chain Networks to eliminate this chaos and replace it with orchestrated efficiency—all managed in one application. A Supply Chain Network not only links activity from one process to the next (for example, the scanning of goods to confirm packing accuracy can generate a Packing List and Invoice) but also coordinates the activities of all participants on a single platform, keeping all parties in sync as the transaction goes through its lifecycle. For example, Suppliers and Logistics partners all have access to the current version of the order and financing banks have immediate access to approved invoices. Supply Chain Networks help give the buyer confidence that their order has been fulfilled accurately, giving them the comfort in processing invoices before they have actually been received. This provides earlier cash flow visibility to both buyer and supplier as well as provides suppliers earlier access to capital with Supply Chain Finance offerings.

Key features of a supply chain network:

• Data Inheritance: The data from the original PO and all subsequent steps flow through the processes from one partner to the next. This eliminates the need to re-enter data, improving accuracy and saving time. Documents, like custom forms, are now easily generated and ensured to be compliant.  

• Validation Controls: Validation points are built into the systems so shipments can’t proceed until the details match the order specifications and rules-based guidelines established by the buyer. This helps spot issues early when there is still time to make an adjustment. 

• Exception Management: A supply chain network automates many steps, only alerting the user of exceptions that need special attention. For example, routine purchases orders and invoices that align, can be automatically approved for payment. This saves time so users can focus on the exceptions.

• Value for Everyone: Efficiencies are realized by eliminating emails and spreadsheets as well as through system -to-system integrations. Supply chain finance offerings can help Buyers and Suppliers with their working capital and cost reduction strategies.  

• Pervasive Real-Time Visibility: By providing all parties real time visibility to Order statuses, Inventory movements and projected cashflow, all parties can more accurately plan their business with the most up to date information.

• The Role of Technology: Keeping the myriad of shipments moving in the right direction, according to a high-stakes timeline, requires smart technology. Modern supply chain network solutions, such as Infor Nexus offers, help orchestrate these many variables.

The Infor Nexus Supply Chain Network is a single-instance network, meaning a supplier or shipping partner only needs to log-in once to see all of the orders. When a company works with Nexus, they don't have to reconnect every time they are added to a new community. This also helps with financing suppliers. Because of the integrations with banks, Infor Nexus can help buyers loop in banks to provide different types of financing for the supplier to ensure that the supplier can procure raw materials and complete the order. 

Infor Nexus P2P Network helps organizations manage the complexity of their direct P2P program with greater ease, accuracy, and efficiency. The technology removes many roadblocks and headaches, making the global supply chain easier to manage. It also adds insights and guidance so supply chain professionals can make smart decisions every day, for every shipment in transit. Learn more about Infor Nexus Procure-to-Pay automation here.