Procure to Pay
Procure to Pay
Procure to Pay
What is Procure to pay?
Before defining procure to pay, it is important to understand the process of procurement. All types of businesses, big or small, must acquire various goods and services on an ongoing basis. These goods and services may differ from one business to the other. It involves people from both the purchase and account payables department. The number of people and the complexity of the process depends on the size of the organisation. This acquisition activity is also termed as “Procurement.”
The process of procurement encompasses various activities that range from simple to complex and includes the following:
- Identification of the best source for products and services.
- Negotiations and drawing contracts for the supply
- A purchase order for goods and services
- Delivery of goods and services
- Invoice generation
- Managing account payable
With more organisations taking their business to the cloud and increased need for automation, business houses are adapting to digital ways of doing the activity of procurement.
What is “Procure to pay”?
” Procure to pay” is the term used by software companies to label the final act of buying goods; it is called procurement. This portion includes all the activities that occur once the sources or vendors for products and services have been identified. Hence, procure to pay is the component of a more extensive process called procurement.
Why do you need “Procure to pay”?
Procure to pay, also known as P2P or purchase to pay, is the need of the hour. It has become a critical component of the customer value chain. Delivering superior value to the customer is the key to growth. To ensure superior value, a smooth flow of goods and services to produce the final offering is needed. The two important components that aid in this smooth flow are
- Correct ordering from the source
- Timely payment to the source
What are the advantages of “Procure to pay”?
Procure to pay integrates the various activities and sub-activities performed by the purchase and account payable department for managing the supply chain. Procure to pay brings increased transparency and control to the process of procurement. Some of the key advantages are as below.
- Timesaving
- Paperless
- Enhanced control
- Better visibility
- Better fund management
- Enhances efficiency in account payable processes
What are the steps included in” Procure to pay”?
Procure to pay involves the integration of the purchasing department with the accounts payable department. Usually, the procure to pay system involves the following steps:
- Supply management
- Cart or requisition
- Purchase order
- Receiving
- Invoice reconciliation
- Accounts payable
While setting up procure to pay to remember to build flexibility in the system. A good implementation of procuring to pay caters to the current needs of the organisation and is flexible enough to incorporate future changes as they arrive.
What are the steps excluded in “Procure to pay”?
Procure to pay is not directly related to supplying chain management. It has a strong connection with supply management, which is ensuring the flow of goods and services and has a limited scope. Hence the following steps are not included in the procure to pay
- Sourcing
- Production planning
- Forecasting
What are the challenges with “Procure to pay”?
The challenges in setting up procure to pay can be categorised as below:
- Organisation related
- Employee related
Organisation related
Certain organisations have systems and procedures that are difficult to integrate and pose serious challenges. Information and data quality regarding vendors, finance, etc., are essential for successful execution—an organisation’s ability to provide accurate data impacts the success of procure to pay.
Employee related
Procure to pay integrates procurement and account payables and results in higher visibility and transparency in the transactions. These changes, at times, are perceived as a potential threat by the employees. Implementation of procuring to pay breaks the status quo and attracts resistance from employees. Organisations must invest time and money in managing this change from the traditional ways to Procure to pay.
Conclusion
Today organisations are in between shrinking margins and an aware customer with shifting loyalties. With an increase in the number of players, the landscape across the industries has become highly competitive. Creating, communicating, and delivering superior value is the only way to hedge and grow the customer base. Procure to pay system helps organisations in reducing cost, building efficiency, and creating a superior value proposition. A consistent flow of finished goods and services needs a robust and error-free procurement of essential production resources. Procure to pay helps organisations to create competitive differentiation in the market and gain market share. If you are looking for more on “Procure to pay,” you can contact us (either by filling the form attached in the footer or on the contact us page).
Industries & Impact
My vision for Moglix is to change the face of industrial commerce: Rahul Garg
Now and Next in the Infrastructure Sector
Moglix enabled Agile MRO Procurement at Scale through Workflow Digitization of large EPC company
Packaging
Packaging
Packaging
Introduction
Packaging can be defined as the technique of protecting the products, articles for storage, distribution, and sale. It means wrapping the products to look attractive or protecting the goods for safe transit. It also means covering the products to save them from damages during transportation and storage. Packaging is the wrapping material around an item to contain, identify, protect, display, and make the product marketable and clean.
However, the term packaging has been interchangeably used for retail as well as transport container. Consumer packaging has some marketing implications, while transport containers are more significant from a logistics standpoint.
Packaging is also closely related to branding and labelling as it appears on the package, and the brand is typically present on the label. It largely defines the product contained inside. The package contents may be pre-weighed, measured, stored, assembled and then carefully placed in a specially designed box, crate, jar, bottle, tube for convenient distribution.
Materials Used
Different types of materials are used for packaging. These materials are:
- Wood
- Paper
- Glass
- Plastics
- Metal
- Polyester
- Gunny bags
- Straw baskets
- Wooden boxes
- China jars
- Earthenware
- Cellophane paper
Objectives of Packaging
1. To provide protection
Packaging ensures that the product inside is protected against vibration, temperature, breakage, wear and tear, light, moisture, precipitation, leakage, and theft.
2. To enhance marketing
Good packaging with attractive labelling helps the sellers to promote the product to potential buyers. The size, colour, appearance, shape of the packaging is designed in such a way to attract the attention of potential buyers.
3. To convey the message
Sometimes manufacturers print essential information on the packaging about the contents inside, such as usage instructions, raw materials, expiry date, manufacturing process, etc. This information is crucial for users.
4. To provide convenience
Good packaging adds to the comfort in handling, display, transportation, opening, and storage.
5. To enable product identification
Packaging allows a product to have a distinct identity. With the effective use of colours, shapes, and graphics, such identification and distinction are essential in times of tough competition.
6. To enhance brand image
The brand image can be improved greatly, with attractive packaging in a consistent manner over a long time.
Functions of packaging
1. Preservation and protection
The core function of packaging is to protect the contents during transit from the manufacturer to the ultimate consumer. It safeguards the product from any damage as this is a loss and inconvenience to the seller and buyer. It protects the product from dust, damage, leakage, pilferage, chemical change, insect attack.
2. Safe containment
Most products need to be contained before they can be moved from one place to the other. This helps to maintain the quality and reachability of the product.
3. Effective communication
A vital function of the packaging is to communicate the product effectively. It tells the consumer about the product, other instructions, and utility information. Information such as quantity, price, inventory levels, packaging date and time, etc., serves as useful information for the consumers.
4. Convenience
Proper packaging ensures that the product needs less space and keeps the product and its content intact.
Essential qualities of packaging
- Attractiveness of the package
- Enhanced product description
- Convenience of storage and display
- Security of the goods
- Convenience of transportation
- Easily disposable
Types of packaging
Packaging can be segregated based on the items it contains.
Bulk/family packaging
A package of a particular manufacturer is packed in an identical manner. The shape, colour, and materials used for packaging will be similar for all the manufacturer’s products.
Reuse packaging
Sometimes the packaging can be used for other purposes after the goods have been consumed. It is known as reuse packaging.
Consumer packaging
This package holds the required volume of the product for ultimate consumption and is more relevant in marketing products such as tobacco, cigarettes, beverages, etc.
Transport packaging
The products traded to different places need to be packed well enough to protect them from damage during transport, handling, and storage.
Problems encountered in packaging
- Costs of packaging
- Convenience
- Reuse purposes
- Appearance
Conclusion
To conclude, packaging is the coordinated system of preparing goods for transport, warehousing, sale, logistics and end-use. Apart from serving a practical purpose of protection and preservation of the product’s quality, it is the aesthetic appeal part of packaging that makes it more interesting. The visual impact of the packaging can be a unique selling proposition of a product, because sometimes you do judge the book by its cover!
Industries & Impact
My vision for Moglix is to change the face of industrial commerce: Rahul Garg
Now and Next in the Infrastructure Sector
Moglix enabled Agile MRO Procurement at Scale through Workflow Digitization of large EPC company
Indirect Procurement
Indirect Procurement
Indirect Procurement
What is Indirect Procurement?
Indirect Procurement is the process of procuring services or products required to run any business. To ensure that the business runs smoothly, one will need services or products continuously. The goods and services obtained through Indirect Procurement are not the ingredients of the finished goods or services that a business offers to its customers. These will not impact the profitability of the organization directly. It is more to do with inputs getting converted to the desired output effectively. For example; the procurement of an outside vendor for facility management of the office premises or furniture and stationery for the staff. The goods and services brought in through Indirect Procurement are for internal stakeholders’ consumption and not for external customers or vendors. Business houses are seen to have a spending range between 15-27% of their revenue on Indirect Procurement.
What is the difference between Direct and Indirect Procurement?
Direct Procurement
- It involves purchasing raw material and Goods that are used in the manufacturing of the finished products.
- This will have a direct impact on the bottom line of the business and helps organisations to create profits, drive performance and create competitive differentiation in the marketplace.
- Direct Procurement involves purchasing goods from suppliers at the best possible rates, quality, and price, hence; the procurement team needs to be relationship-oriented with the suppliers.
- This involves purchasing goods in bulk to achieve economies of scale.
- Wrongly managed direct procurement can lead to the halt in the manufacturing process of an organisation.
Indirect Procurement
- It involves purchasing goods and services that are required for the smooth functioning of any business and aids in developing and maintaining various operations of the business.
- This does not have a direct impact on the profitability of any organisation.
- Indirect Procurement is all about getting the lowest possible rates as it involves managing expenses; the procurement decisions are more price sensitive.
- This involves identifying procurement sources that are cheapest.
- Wrongly managed Indirect procurement can lead to an increase in expenses and an increase in dissatisfaction of the internal stakeholders as it involves working with a more complex internal stakeholder environment.
What are the Skills and Strategies Involved with Indirect Procurement?
Indirect procurement usually deals with procuring goods from hundreds of categories, multiple suppliers, and category expertise across to procure at the lowest available cost. It involves catering to a much more complex environment of internal customers that are well informed and need the team’s support for procurement. Most of the internal stakeholders see truly little value in indirect procurement as an activity. Indirect Procurement also involves advising the internal stakeholders on their budget availability and spendings in an environment where they have little or no mandate on their spending budgets.
The key skills needed are as below:
- Expertise in a broad range of categories.
- Influencing and advisory skills.
- Identification, sourcing, appointing, negotiating, and managing suppliers.
- Cost management skills.
- Data mining and analysis skills.
- Update on changing technical and supplier environments.
Strategy: Like Direct Procurement, Indirect Procurement involves developing a cost-saving sourcing strategy. The organisation big enough to appoint a procurement team usually follow a system of “Procure to Pay“. This would require the procurement team to do the following:
- Create a detailed list of categories of products and services that they need to procure.
- Source, the various suppliers for each category in the list.
- Identify the best supplier for each category and negotiate the lowest possible rates.
- Decide upon the most preferred cycle for final invoice payment.
For smaller organisations who cannot afford to have an Internal Procurement team, partnering with a group purchasing organisation(GPO) would be the best solution. The group purchasing organisation offers small organisations the advantage of combined purchasing power and access to discount programs from top suppliers that otherwise is out of reach for them.
Industries & Impact
My vision for Moglix is to change the face of industrial commerce: Rahul Garg
Now and Next in the Infrastructure Sector
Moglix enabled Agile MRO Procurement at Scale through Workflow Digitization of large EPC company
Indirect Cost
Indirect Cost
Indirect Cost
What is Indirect Cost?
In all sorts of departments like production, research, retail, and accounting, a cost is defined as the value of money that has been used up to produce something and also deliver a service.
Most businesses believe that the cost could be defined as one of the acquisitions, in which the amount of money which is expended to acquire the same is being counted as cost.
Generally, in the field of economics, the cost could be referred to as a more generalized version of the field of economics, where cost is a metric that is added up as a result of a process or maybe as a differential that could help make a decision. This cost is further broken down into direct and indirect costs.
What is an Indirect Cost?
Those costs that aren’t accountable directly to an object of cost, like that of a particular project, facility, function, or product, are being referred to as indirect costs. These kinds of costs could be either fixed or variable. Costs like administration, personnel, and security costs are classified as indirect costs.
Indirect costs aren’t related directly to production, and some of these could be overhead as well, where the overhead costs could be directly attributed to a project. Most costs that are usually being allotted indirectly are those costs that are being related to transport, administration, selling and distribution, office and security, shipping, postage, utilities, and rent.
Types of Indirect Costs
Indirect costs could be categorized further under two categories: fixed indirect costs that contain activities or costs that are fixed for a particular project or company, like that of transportation of labor in the site of work, the building of temporary roads. Others in the category could be classified as recurring indirect costs that contain activities that repeat for a particular company like record maintenance or the payment of salaries.
Additionally, indirect costs aren’t directly attributable to a cost object. Even though it may financially not be feasible, indirect costs are mostly allocated to a cost object, such as overhead. For instance, those costs that aren’t directly assignable to the end product are those that are indirect.
About Indirect Cost
Indirect costs could be variable and fixed sometimes. They are mostly not related directly or could be traced to each product unit, but it may vary considering the result of the output. Examples may be cited concerning the manufacturing industry, perhaps the electricity bill.
Also, fixed indirect cost isn’t that traceable or that there’s a direct relationship with each unit of the product, and it doesn’t show much differences output-wise like that of the salary of a nightguard.
Sometimes names like overheads, administrative costs, or facility costs are also called indirect costs. There could be a lot of variation for indirect costs that differ from industry to industry.
Most companies benefit from indirect costs that help them make a significant decision on pricing. Mostly, all the overhead costs would be added together by the accountant. Post that, it would be allocated based on per unit to compute the calculation of per product overhead. It’s mostly found out that an organization makes a profit on each unit after incorporating the overhead costs.
The foundation for the product pricing strategy is determined by this before setting the desired margin of profit. For all businesses and organizations, it’s of utmost importance to carefully evaluate the indirect labor costs and also analyze its impact on overhead costs for the smooth running of the business.
Industries & Impact
My vision for Moglix is to change the face of industrial commerce: Rahul Garg
Now and Next in the Infrastructure Sector
Moglix enabled Agile MRO Procurement at Scale through Workflow Digitization of large EPC company
E-Procurement
E-Procurement
E-Procurement
What is E-Procurement?
Electronic procurement is services and information in business to business (B2B), business to consumer (B2C), or Business to Government environment via the internet or other networking systems like Data exchange via Enterprise resource planning (ERP). It is also known as supplier exchange is a sale or purchase of goods.
The E-procurement value chain consists of e-tendering, e-informing, e-auctioning, vendor management, catalogue management, contract management, e-invoicing, inventory management, e-payment, order management, and others. These elements form the value chain are optional and used as per the unique business process requirements.
Implementation of E-Procurement results in a cost-effective, transparent, and data-driven approach to reach the best supplier of goods or services.
Why E-Procurement?
E-procurement is effective by reducing time, expenses, and providing coherent real-time information during the procurement process. The implementation has changed the way procurement worked in earlier times; it has automated the complex task of finding the best procurement deal. Its working and benefits are explained in-depth below.
How does E-Procurement Work?
The E-procurement process follows a standard set of steps, such as:
- Identifying the requirement: Business evaluates the requirement of goods or services. Businesses try to recognize the kind of product they are looking for, along with estimated quantities.
- Look for suppliers: Varies suppliers of that product are evaluated. The evaluation can be based on after-sale services; public forum ratings estimated delivery time and various other parameters stored in the E-procurement system.
- Finalizing a supplier: The supplier is finalized for procurement after running all validations and checks. To reach the final supplier, multiple steps like Request for information (RFI), Request for quotation (RFQ), comparison reports, and Historical data analysis are obtained via the E-procurement system.
- Purchase requisition and order: Once a supplier is selected the purchase requisition and orders are raised. The delivery date estimates are received along with living status. The inventory is updated once goods are received. E-invoicing and E-payments modules are run to settle financial accounts between two businesses.
- Measure supplier performance: Delivery can be one at a time (One-time order) or over a period of time (Contracts). Order and contract management modules are used to streamline the process. The delivery lag days, quality, quantity, packaging quality, and other aspects of supplier services are managed.
- Analytics: Stored data can be used to derive insightful information to fine-tune strategic business decisions.
The process and the stages involved from the value chain may vary depending upon the frequency of material bought, product quantity, service hours, customization involved in the product making, and other business-specific product requirements.
What are the Benefits Associated with E-Procurement?
- Automates manual work: It eliminates paper-work and several manual hours wasted to keep track of the process. E-procurement system automates the process saving many manual hours spent on trivial tasks. This reduces the communication gap between the different stakeholders involved.
- Real-time information exchange: The vendor master information, transactional data, Pricing data, all of it can be updated and stored at one place leveraged by multiple stakeholders encourages better information exchange rather than people connecting one to one.
- Informed decision making: The single source of truth (E-procurement system here) stores data for a longer period which plays a vital role by providing insightful analysis about procurement. Well informed decisions making culture can lead businesses to crack strategic deals, raise profit margins, and reduce wastages.
- Cost-effective: E-procurement system is a very cost-effective solution to the process involving a lot of manual work hours, paper-work, information exchange, and much more. This all can be automated and stored to maximize the gain.
- Improved transparency: Various governmental agencies, PSUs, NGOs, and public societies can make use of E-procurement as a transparent tool with all activities recorded and properly channelized.
Industries & Impact
My vision for Moglix is to change the face of industrial commerce: Rahul Garg
Now and Next in the Infrastructure Sector
Moglix enabled Agile MRO Procurement at Scale through Workflow Digitization of large EPC company
E-commerce
E-commerce
E-commerce
What is e-commerce?
e-commerce or electronic commerce is a type of business conducted through the internet. All elements of the business, like the transfer of money and data needed to execute the transactions, are done electronically. The term refers to the sale of physical products online. But it also covers commercial transactions facilitated through the internet.
History
The World Wide Web was created in 1994, and the world’s first-ever e-commerce transaction happened soon after that in August 1994, when a person sold Ten Summoner’s Tales, a musical CD by Sting through NetMarket, an American retail platform. The New York Times considered this as the world’s first retail online transaction.
Since then, e-commerce has developed at a frantic pace. The global retail ecommerce sales are projected to reach $27 trillion by the end of 2020.
Types of e-commerce Businesses:
- B2C – Business-to-Consumer – Transactions happen between businesses and consumers. This is the most commonly used e-commerce business model.
- B2B – Business-to-Business – Transactions happen between two or more businesses, such as a manufacturer and supplier or a wholesaler and a retailer.
- C2C – Consumer-to-Consumer – Relates to the sale of products/services between consumers. eBay is a fine example of C2C e-commerce model.
- C2B – Consumer-to-Business – It’s the reverse of the conventional e-commerce model in which consumers make their products/services available to businesses.
Apart from the above, there are also the B2A (Business to Administration) and C2A (Consumer to Administration) models of an e-commerce business. Both these models are focused on improving administrative efficiency with the support of information technology.
The Evolution of e-commerce:
1994 – The first web browser launched:
The Netscape Navigator was launched as a browsing tool by Marc Andreessen and Jim Clark. It was primarily used on the Windows platform during the 90s.
1995 – Launch of Amazon and eBay:
Amazon was introduced to the world as a book-specific e-commerce platform by Jeff Bezos. At around the same time, Pierre Omidyar launched AuctionWeb, an online auction site that became massively popular as eBay later.
1998 – PayPal debuts as the first online payment system
This was one of the critical developments in the e-commerce evolution process. PayPal, as a money transfer tool, gave real shape to e-commerce transactions.
1999 – Alibaba Online launched as an online marketplace
The biggest e-commerce store was launched in China with $25 million-plus funding. Today it is a B2B, B2C, and C2C platform and ranks high in terms of sales, revenue, and profitability.
The Dazzling Progress
The progress in the e-commerce industry was dizzying from here on. Consumers could buy anything they needed in a few clicks. The payment processes were becoming more secure. Suppliers and delivery companies were falling over each other to grab sales with unbelievable offers loaded in favour of buyers. All these developments gave the e-commerce industry a huge shot in the arm during the late 90s and early 2000.
- In 2001, 70 per cent of consumers with an internet connection used e-commerce to purchase online during the holiday season.
- In 2005, Cyber Monday broke all records to register one of the biggest online shopping sales of the year
- In 2008, online purchases were made using mobile devices for the first time
- In 2012, B2C sales surpassed $ one trillion globally
Several developments took place in the intervening years that helped the e-commerce industry make incredible progress. Google launched its online wallet payment app in 2011, and in 2014 Apple too jumped into the fray with Apple Pay. Instagram made it easy for users to sell directly from its platform with its shoppable tags. And the Cyber Monday success story continued. In 2017, sales exceeded a whopping $6.5 billion.
The Future
The e-commerce industry is on a constant path of evolution, embracing emerging technologies to make it easy for consumers and businesses to have a smooth and secure experience during transactions. Logistics has also evolved with the introduction of Artificial Intelligence and Automation tools. The emergence of Social Media has also helped brands and buyers make informed decisions.
The future of e-commerce looks extremely positive and buoyant as more and more consumers prefer shopping online globally. In the coming years, new sales and revenue records will be created as the industry shows no signs of slowing down.
Industries & Impact
My vision for Moglix is to change the face of industrial commerce: Rahul Garg
Now and Next in the Infrastructure Sector
Moglix enabled Agile MRO Procurement at Scale through Workflow Digitization of large EPC company
Digital Transformation
Digital Transformation
Digital Transformation
What is Digital Transformation?
Digital transformation is the collective term used to describe the adoption of digital technologies to improve existing efficiencies and outputs of current workflows, production processes, and communications in any organisation. This is often by replacing legacy non-digital methods with new automated or semi-automated digital solutions to streamline work. Digital transformation is thus re-imagining the business model to use the strengths of the digital medium or using digital technologies to create new business opportunities around existing competencies.
A Digital Transformation project could be both the forms- software solution and hardware solution. For example, the adoption of cloud computing to reduce a company’s owned physical IT infrastructure or to use new POS software in a retail store to streamline customer checkouts and improve customer relationship management post-sales are examples of digital transformation.
Digital transformation may be taken up for either a service or a product lead company. It can affect every level of business and interaction. There is no single standard digital transformation solution as it depends on how existing digital adoption levels and how a company does business.
How Does Digital Transformation Add Value?
Digital transformation aims to take a radical look at how a business delivers value to its customers and to define how the adoption of digital technologies can add more value to this. This value varies depending on the business operating model. It can translate into various parameters, including faster turnaround times to deliver a service or product to a customer, increase in sales, increase in customer retention, reduced resources used, and an increase in profitability. It could also mean providing company management with the right kind of data that matters so that they make better critical business decisions. Digital Transformation can provide an added impetus in delivering efficiencies to back-office operations for a product or service. Or even create new products and service offerings that reinvent the company’s core business. Digital transformation can help deliver product customisations and deliver unique and meaningful customer experiences.
What Businesses Benefit from Digital Transformation?
Digital Transformation can add value to any type or scale of business. Whether it is your corner café, shop, local hospital or bank, Digital Transformation has the potential to revolutionise any kind of business. Cafes through Digital Transformation can now offer online loyalty programs to repeat customers, encouraging them to spend more time and to push relevant merchandise. Shops can sell online and can now manage their inventory in a much more agile manner that matches demand. Ensuring shelves are stocked on time and that there is no unnecessary stockpiling of inventory. Hospitals can keep exhaustive holistic records of patients’ health over time and promptly share past ailments with consulting doctors and testing laboratories. Through digital transformation, banks can provide 24/7 banking services that are accessible online or through ATMs and free up their staff to focus on building new businesses.
Who is it Led By?
For digital transformation to be successful, it needs to be implemented from a top-down approach. This means everyone from the CEO, CIO, and other business leaders need to be actively involved in a digital transformation business. Digital transformation projects affect every aspect of the business. Therefore it is critical to ensure that all stakeholders have a say and buy-in to adopt these new technologies. Those people who directly interact with customers or straddle the gap between front-office and back-office operations need to understand the goal and processes of any Digital Transformation drive.
How is it Different from Digitisation?
Digitisation is converting physical analogue artifacts such as existing documents into digital versions quicker to index, search, and access. A digitisation exercise for a company is only one small element of a more massive digital transformation exercise that is undertaken.
How Can We Implement a Digital Transformation Project Successfully?
Just like no two businesses are identical, every digital transformation project is unique. A key component to succeeding in any digital transformation project is not the technology that is adopted but creating an organisational culture that is quick to adapt and change to new business ways. This is achieved through a clear plan that describes changes and impacts for each stakeholder and how standard operating procedures may evolve. Digital technology changes continuously, and people within an organisation must have the skills, aptitude, and attitude required to re-learn and adapt to new techniques.
Industries & Impact
My vision for Moglix is to change the face of industrial commerce: Rahul Garg
Now and Next in the Infrastructure Sector
Moglix enabled Agile MRO Procurement at Scale through Workflow Digitization of large EPC company
Contract Management
Contract Management
Contract Management
What is a digital contract?
A digital or online contract has gained extensive notoriety due to the advancement of the internet and e-commerce. A digital contract can be simply defined as an electronic contract that is modelled, signed, and executed electronically, with both the parties accessing it virtually. A digital contract is quite similar to a traditional paper-based contract, especially in the way it is conceptually drafted.
In the case of a digital contract, a seller who wishes to sell their products usually presents their products, prices and terms to prospective buyers. The buyers, on the other hand, who are interested in buying the products click on the ‘Click to Agree’ button, as it usually indicates the seller’s terms as presented by the seller.
Electronic signatures for digital contracts are usually done in a myriad of different ways such as typing the name of the signer while uploading the scanned version of the signature. Once all of your terms and conditions are accepted, the transaction within the digital contract is assumed to be completed.
With a digital contract, people can formulate and implement policies through commercial contracts within businesses all across the Internet. The digital contract is primarily modelled for sale, purchases, and supplies of products and services for both consumers as well as business associates.
They are categorised into various types of digital contracts, such as:
- Browsing or web wrapping contracts
- Shrink wrapping contracts
- Click wrapping contracts
- Employment contracts
- Contractor agreements
- Consultant agreements
- Sale and Resale agreements
- Distributor agreements
- Non-disclosure agreements
- Software development & licensing agreements
- Source code escrow agreements
What is a contract management system?
A contract management system is commonly known as the control lifecycle management. It primarily manages the production, management of contracts, service level agreements and procurement master agreements. A contract management system is fundamentally used for managing the creation, negotiation, signature, and renewal and data analysis of all legal contracts.
The contract management system can help business teams to self-serve for themselves, agree, and manage routine contracts from one single unified workspace.
What does a contract management system need to have?
A contract is a core necessity for any business’s procurement activities, and it is set for prices, service levels, terms and supplier relationships. The management system can easily facilitate and manage the drawing up and the execution of new contracts. You can easily ensure that your company is supplied with both direct as well as indirect supplies, as the company’s contract management will include:
- The storage of the company’s standardised contracts
- Flexibility for coping with a vendor relationship along with the interactions
- Calendars which include milestones with the vendor that they should meet
- Checking lists for managing information and activities within the contractual life cycle
- Monitoring compliance
- Alerts for indicating movements from expected behaviour
- Agreed delivery schedules, along with the ability to track them
- The prices and budgeting for product lines and vendors
- Document depositories for holding live and standard contracts
- Event management for problems.
- Claiming administration for coping with non-adherence to the contract.
It is imperative to request for proposal management which includes template-based creation. With the help of an interactive and dynamic workflow, there is a structured RFP management through its life cycle.
What are the stages of a contract?
Here are the various stages of a contract, which must be strictly followed through:
Creating: With the help of contract management software, users can also create templates for the most common contracts that the business requires. Whether the contract is meant for employment, an NDA or a sales contract, the template is just a set of rules that needs to be followed when creating a document and it can be customised for each contract.
Collaborating: The contract management software can let you do it in real-time, along with tracking the changes. It is really beneficial in successful collaboration in editing documents, printing, and scanning as well.
Signing: With the help of digital platforms that can help to replicate the binary, permanent character of the physical signature. Thus, signing is one of the best platforms for digital platforms.
Tracking: Monitoring data within the legal line can help with the modernisation of legal documents, mainly in-house for the field of legal operations. With the help of the contract management, you can easily track and monitor the progress within a few contracts.
Renewing: Renewing is one of the final steps in the contract management software lifecycle, which takes a holistic view of contracts. The signature does not represent the end of the contracting process without a multitude of obligations and milestones, which follows the process for all the people involved. Thus, a system which is in place can help you to track the progress through the lifecycle successfully. You can also feed amendments without the contract management software to ensure you get the best results possible.
Industries & Impact
My vision for Moglix is to change the face of industrial commerce: Rahul Garg
Now and Next in the Infrastructure Sector
Moglix enabled Agile MRO Procurement at Scale through Workflow Digitization of large EPC company
Category Management
Category Management
Category Management
What is procurement category management?
Procurement category management is a strategic pathway wherein companies can segregate their expenditure into sectors that consists of a particular category of products. Such an approach allows organisations to concentrate more on opportunities for efficiency and consolidation.
Category management might involve the separation of indirect and direct products and services. This separation can be built up from parameters such as volume, type, supplier, and value. Category management thus assists companies to analyze their expenditure in each of the categories and focus more on strategic initiatives.
What is the category management process?
An array of steps drives the category management process. These steps include the following:
- Initiate – You have to start by forming and defining each of the categories. This will assist you in further segregating your products and services.
- Prepare – Once you have defined the categories for your products and services, you need to establish a vision. This will assist the category managers to manage your inventory better and keep the progress of the company in line with your goals.
- Prioritize – You also need to set specific objectives that will be a part of your company’s vision. Objectives for a local can be to source products from suppliers from the same county or region within the next 2 years.
- Implement – Once the senior management approves the strategies which you have set in the firm, then you can move towards the implementation stage. The category manager now has to work in tandem with stakeholders to ensure the efficiency of processes. This is the very reason that the strategies set have to be supported by all members in the organization for high effectiveness.
- Maintain – To ensure that company objectives are achieved via implemented strategies, category managers can employ service level agreements (SLA) and key performance indicators (KPI). These SLAs and KPIs can then be monitored continuously to evaluate the performance of employed strategies. The SLAs and KPIs have to be scrutinized and ensured that they carry value before their employment.
- Improve – The categories formulated need to be evaluated at regular intervals. Many organizations have defined time intervals for inspection of categories. Procurement is known to be an evolving function, and hence a category that was relevant at the beginning of the process might turn out to be obsolete later on. The process of evaluation is thus extremely important to ensure that categories stay relevant to the organization, and are in line with the company’s vision.
The category management process is not a hard-and-fast depiction of steps. These steps can be altered as different category managers will have different requirements. The structure of the category management process provides managers with a starting point and guidance to formulate a comprehensive process for procurement.
What is the importance of category management?
Category management has become vital for organizations in today’s hyper-competitive environment. This process empowers procurement professionals to divert their times and resources towards analyzing the market. Such an approach assists category managers to leverage their negotiations and appropriately manage their suppliers. Category management thus assists the managers and team members to organize resources and enhance their supplier relationships. The process also assists to gain an in-depth understanding of all the categories in the organization, and how each of them can assist in risk management.
What are the 4 Ps of category management?
- Product – Each category should have an appropriate stock-keeping unit (SKU) which reflects the mission of the retailer. The role of the category for a particular store is dependent on the variety of a certain product. This can reflect necessity, diversity, or quality, among others.
- Price – The price of a product or service is a crucial aspect and should be placed appropriately to attract shoppers.
- Placement – The placement of products is another important aspect and needs to be carried out efficiently. A well-merchandised product can be assembled in a showcase or a shoppable fashion.
- Promotions – To make the most of categories, a firm or a store needs to carry out periodic promotions. The promotions should depict the nature of the product and its importance, whilst urging shoppers to give it a try.
Category management can vary as per the specific requirements of a company. Depending on the person, your approach, category management can be described, approached, and accomplished in different ways. This suggests that you can create a strategy that befits your needs and requirements. Category management will assist you to focus on promotions, inventory management, product pricing, visual merchandising, assortment, and purchasing. So, if you wish to take your business to new heights, start your category management process today.
Industries & Impact
My vision for Moglix is to change the face of industrial commerce: Rahul Garg
Now and Next in the Infrastructure Sector
Moglix enabled Agile MRO Procurement at Scale through Workflow Digitization of large EPC company
Blister packaging
Blister packaging
Blister packaging
What is blister packaging used for?
Blister packaging is employed for packaging products such as medication, hardware, toys, etc. Blister packaging is usually plastic based and consists of a backing card with some form of artwork. It also consists of a plastic pocket that is clear,this is the part that’s known as a blister. Blister packaging includes two primary elements viz, a cavity made from either aluminum foil or plastic, and a lid made from aluminum, plastic, paper, or paperboard. The cavity’s function is to hold the product, while that of the lid is to seal the product to safeguard it from external impurities.
Blister packaging is used extensively in the pharmaceutical industry to package lozenges, granules, capsules, pills, and tablets, among others. Blister packaging is also employed for products such as pencils, pens, and other stationery. The name of blister packaging is derived from the fact that the products are packed in a small plastic blister or bubble. This packaging is also commonly known as push-through or bubble packaging.
Common Applications of Blister Packaging
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Unit-dose packaging of pharmaceuticals
Blister packaging provides barrier protection for products and tamper protection, enabling them to have a high shelf-life. Hence, they are employed in unit-dose packaging of pharmaceuticals. -
Consumer goods
Consumer goods is another area wherein blister packs are used. Goods such as electrical items, hardware, and toys are packed by containing them between clear pre-formed plastic and a paperboard card. -
Clamshell
A blister that is hinged is called a clamshell. This is used extensively for the packaging of an array of products. It can be utilized as a secure packaging for small and high-value items, for instance, consumer electronics. This kind of packaging consists of one sheet folded onto the product, which is also fused at times. -
Medical blister trays
Medical blister trays aren’t push-through packs. Hence, they are hence slightly different as compared to blister packs. The base web of medical blister trays is made up of thick sheets of plastic. Their thickness lies in the range of 500 to 1000 µg.
Blister Packaging Process
Thermoforming
Blister packaging via thermoforming includes a sheet of plastic film that is unwound from its reel and sent to a pre-heating chamber. The temperature of the pre-heating chamber and its plates is such that it makes the plastic soft and pliable. This warm and soft plastic is then sent to the forming station under a pressure of 4 to 8 bar, where the blister cavities are formed.
Cold-forming
Blister packaging via cold-forming is made by pressing a laminate film which is aluminum-based into a mold. The pressure on this laminate is applied using a stamp. This process elongates the aluminum-based laminate film and helps it retain its shape. Blisters formed by this process are known as cold form foil (CFF) blisters. The main benefit of CFF blister is that the aluminum-based laminate film offers a strong barrier to oxygen and water, which thus extends the shelf-life of the product.
Blister Packaging Materials
PVC
The most common material employed for blister packaging is polyvinyl chloride (PVC). The main benefits of PVC are ease of thermoforming and low cost.
PVDC
Polyvinylidene chloride (PVDC), when employed via a coat on a PVC film, assists in attaining high oxygen and moisture barrier. The level of protection can differ as per the amount of PVDC used in the coating.
PCTFE
Polychlorotrifluoroethylene (PCTFE) is another material that can be coated onto a PVC film to obtain an excellent moisture barrier. PCTFE coated blister packages are employed widely in the pharmaceutical industry.
COC
Blister packaging via cyclic olefin copolymers (COC) or polymers (COP) can provide a high moisture barrier to blister packages. COC is usually employed in multilayered combinations with or glycol-modified polyethylene terephthalate (PETg), polyethylene (PE), or polypropylene (PP).
What is Strip Packaging?
The distinction between a blister pack and a strip pack is that a strip pack does not have cold-formed or thermoformed cavities. When lowered into the sealing area between sealing molds, the strip pack is built around the tablet or capsule. Strip packaging has the same properties as that of the blister packaging formed via cold forming or thermoforming. It offers protection to products from oxygen, light, and moisture.
Blister packaging is used widely in many industries, such as pharmaceuticals, consumer goods, and electronics. The perfect choice of blister packaging for you depends entirely on your company’s requirements and the products you are offering. It is advisable to conduct thorough research before choosing a particular packaging so that you get the best possible returns.
Industries & Impact
My vision for Moglix is to change the face of industrial commerce: Rahul Garg
Now and Next in the Infrastructure Sector
Moglix enabled Agile MRO Procurement at Scale through Workflow Digitization of large EPC company
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