PURCHASE to PAY PROCESS

The "process" approach leads to a critical and exhaustive analysis of the organization, and demonstrates realistic routes for improvement.

Purchase-to-Pay is a transversal process, crossing all functions in the Company. It is composed of several steps, relatively sequential (from identification of needs to supplier payment), supported by two domains : Procurement Marketing and Infrastructure.

TRENDS AND INFLUENCES

Within a moving environment, the procurement world must adapt itself. Not limited to this list, here are some the major impacts we need to face :

  • The enterprise is focusing on its core business, which leads to more outsourcing, and then to an increasing portion of service purchasing.
  • Competition is continuously growing, forcing the enterprise to seek for more productivity savings. Particularly in vogue, relocation in low cost countries is elected by many companies. Another route, still compatible and even often joined with the former, is the concentration of business support functions.
  • Raw materials prices are growing exceptionally fast. This dramatically impacts the procurement portfolio. Questionning the real internal business needs, and searching new innovative market solutions are becoming the modern leitmotiv for managers and buyers.
  • The Procurement function remains one of the most promising fields (if not the only last) for bottom-line improvements. There is a significant potential for the buyer who is able to perceive and anticipate the dynamics in prices, products, enterprises, and markets.

MEANS AND TOOLS

Few examples of efficient techniques to enhance a Procurement organization

  • "Make versus Buy"
  • Benchmarking - case study example (in french - Institut du Benchmarking)
  • Economic intelligence
  • Portfolio segmentation : a strategic tool, too often disregarded
  • Porter's scheme, applied to the PtP process
  • Positionning methodology
  • Consolidation and/or relocation
  • Procurement Marketing: internally first ! ... Tell me who your Procurement Manager reports to, I will tell you the maturity of your company in this domain !
  • KPIs in Procurement / Payables
  • Accounts Payable is a core element of the Procurement process
  • Administrative optimization : Purchasing Card, e-Imaging, ...