Procurement plays a crucial role in delivering cost savings and driving business success. And with over 70% of surveyed CPOs^[1] expecting procurement risk levels to remain elevated for the foreseeable future, investing in automating P2P processes has become a necessity. 

Procure to pay (P2P) processes enable businesses to document their complex supply chains right from need-based order placement to final payments, affording greater visibility, enhanced operational efficiency, and improved supplier relationship management.

In this article, we will outline all that falls under the ambit of P2P solutions and how automating them can help create streamlined supply chains and resilient organizations.

Understanding Procure to Pay (P2P) 

Alternatively called purchase to pay, procure to pay (P2P) is a systemic process involving the decision to procure goods, making purchase requisitions, accounting for them, and paying the suppliers. It aims to align and integrate the procurement and accounts payable functions of an organization to allow for superior supply chain management. It includes the following components/stages:

1. Requisition: Based on the business needs, a purchase requisition order is made for the identified product to various suppliers.

1. Contract Management: After selecting a suitable supplier, they are sent a formal purchase order. Conversely, suppliers share their invoices with the business.

1. Invoice Approval: Once the products are received, the company matches the order against the invoice and approves it if no discrepancies are found.

Payment: The accounts payable team processes the invoice and releases the payment.

The Need to Automate Procure-to-Pay Processes

As the P2P process has several touchpoints, it is prone to inefficiencies, delays, backlogs, and repetition. A poorly designed procure-to-pay process can escalate costs due to inconsistent/late payments, resource wastage for manually meeting unforeseen bottlenecks, and supplier payment disputes. 
Poor P2P visibility also raises regulatory and tax compliance issues, further damaging the organization’s credibility. So, by automating and optimizing their workflow using procure-to-pay software, businesses can control maverick spending, improve purchase efficiencies, and make their supply chains intelligent and agile.

Benefits of Procure-to-Pay (P2P) Automation 

Technological advances such as robotic process automation (RPA), machine learning (ML), artificial intelligence (AI), and the like are transforming the way P2P processes are run. By analyzing historical trends to automate procurement and improving supplier selection, they are yielding massive cost savings–as corroborated further by over 40% of CPOs^[2] vying to invest in procurement automation, such as procure-to-pay software. The key benefits of procure-to-pay optimization are as follows:

• Complete Visibility: End-to-end P2P automation entails maintaining a complete record of purchases, orders, and payments, which reveals data optimization opportunities, enhances supply chain visibility and transparency, and helps identify and resolve major disruptions.

• Reduces Costs: By deploying procure-to-pay software, companies can improve their forecasting and spend management, avoiding expensive spot buys. Automating P2P processes also helps organizations identify suitable suppliers, enabling better price negotiation. Consistent payments also reduce overall processing times and afford opportunities for availing discounts.

• Enhanced Efficiency: Procure-to-pay optimization reduces the scope for human errors caused by siloed databases and workflow systems. It centralizes procurement and payable processes, thereby streamlining workflows, improving financial accuracy, and enhancing efficiency.

• Prevents Frauds: As procure-to-pay software follows strict invoice matching and supplier selection rules, it helps minimize frauds like diverging significantly from existing prices for immediate purchases or granting contracts to unqualified vendors due to personal relationships.

• Better Supplier Relationships: Procure-to-pay software automates invoice and payment processing, ensuring suppliers can check their invoice status in real-time and get paid on time, further improving supplier management.

Embrace Moglix’s P2P Automation Solutions to Unlock Business Resilience

Moglix’s procurement solutions, such as P2P automation, serve as the backbone of resilient businesses, empowering them to navigate procurement challenges with agility and efficiency. Moglix has already helped India’s largest cement manufacturer achieve a massive 20% increase in efficiency by automating its P2P processes, thus reducing purchase requisition to purchase order times. Download the case study for more details or learn more about Moglix’s solutions.

Did you know that 88%¹ of the world’s leading companies are not  sufficiently protected against supply chain disruptions? As per this World Economic Forum report, including supplier risk management in your B2B supply chain management strategy is a key to building a resilient supply chain.

B2B supply chain management is the process of identifying, assessing, mitigating, and monitoring potential threats and opportunities your suppliers pose. So how can supplier risk management shock-proof your supply chain? Continue reading to find out.

Mitigating Supply Chain Disasters

Supplier risk management is about proactively identifying potential risks, creating strategies to mitigate these risks, and building a supply chain that can withstand disruptions and adapt to changing circumstances. 

Why is it important? Besides contributing to the company’s overall growth and sustainability in an uncertain business environment, supplier risk management can help a company in the following ways:

• Reduce reliance on a single supplier and diversifying sources of procurement. 
• Helps identify potential disruptions and develop strategies to mitigate their impact, ensuring continuity of operations.
• Minimize costs due to production delays, expedited shipping, or sourcing from alternative or expensive suppliers by anticipating and preparing for potential risks.

Boosting Business Performance Through Supplier Risk Management 

Over 50% of businesses consider supplier collaboration a key focus to improve B2B supply chain management. Because it empowers them to make the supply chain more consolidated, resilient, and optimized, which results in the following benefits: 

• Increased Visibility: While managing supplier risk, you’ll have access to real-time supplier data that can help identify and alert potential risks and opportunities in real-time. You could also get possible actions and outcomes based on supplier data and risk scenarios.

• Reduced Risk: A robust supplier risk management system ensures you rely on suppliers vetted and monitored for their performance and compliance. This can reduce the number of contact points and potential failure points in the supply chain.

• Increased Efficiency: You’ll observe positive changes in the quality of products because you’re now identifying and mitigating supplier performance issues before they impact your operations. 

• Reduced Cost and Complexity: Supply chain management software simplifies the procurement process and reduces inventory and logistics costs by optimizing the order quantities, delivery schedules, and transportation modes.

Conclusion

Managing risks in modern, multi-tier supply chains is a complex challenge, as the probability and severity of risks are hard to predict. However, supplier risk management can help organizations adopt a structured approach to deal with known risks and prepare for unknown ones. One of the ways to implement supplier risk management is to partner with a trusted supply chain solutions provider, such as Moglix. 

For instance, Moglix helped a leading chemical company in India to improve its supply chain metrics by consolidating its vendors, categorizing line items, and optimizing inventory. These solutions led to a 95% punctual delivery, a 15% quicker process, and a 6% spending reduction for the company.

If you are curious about how Moglix can help you manage your supplier risks and build a resilient supply chain, schedule a demo here.

Automotive vehicles are no longer mere metal on wheels; they have transformed into advanced, software-defined, GPU and chips-based, sensor-driven wheels—a transformation that will be propelled further with the adoption of electric vehicles (EVs), autonomous driving, and vehicle connectivity innovation. So, it is no wonder that these innovative technologies, which are expected to make the auto industry worth $300 billion by 2026^[1], will also reshape its supply chains. 

With OEMs and their supplier base already grappling with pandemic-brought raw material and chip shortages and evolving compliance burdens, reworking their supply chain MRO to adapt to these evolving technological changes while streamlining their operations has never been more essential. In this article, we will delve into the exciting future trends expected to reshape the Indian automotive industry by driving growth and efficiency in their supply chain processes.

4 Trends Revolutionizing Automotive Supply Chain MRO

The automotive industry can build sustainable, intelligent, and resilient supply chains that deliver improved visibility and enable data-driven decision-making by incorporating the following changes in their supply chain management software.

1. Digital Procurement Solutions

Automotive players are integrating tech-enabled solutions involving automation, artificial intelligence (AI), and machine learning (ML) into their procurement platforms to optimize demand forecasting, process differentiation, supplier selection, and contract management. These B2B supply chain management solutions help reduce lead times, improve supplier relationship management and collaboration, and enable faster data-driven decision-making, creating a more agile and responsive supply chain.

2. Connected Factories 

In the Industry 4.0 era, the automotive industry has been turning to connected factories where production systems and manufacturing processes are interconnected through smart sensors and the Internet of Things (IoT). This enables the real-time generation, monitoring, and analysis of data that direct decisions regarding inventory levels, shifting production lines, and the prioritization of certain production runs. It also facilitates predictive maintenance, thus, minimizing downtime and improving supply chain MRO management.

3. Supply Chain Analytics 

Automotive companies lacking end-to-end digitalization suffer over 20-25% production delays due to supply shortages, compared to 10-15% for the advanced players.^[2] By deploying advanced analytics tools, OEMs can process vast troves of data to gain valuable insights into demand patterns, potential production disruptions, operational costs, supply chain efficiency levels, and supplier performance.

4. Sustainability and Green Supply Chains

As automotive has a huge role to play in advancing India’s goal of achieving net zero emissions by 2070, efforts are being made to green the supply chains by implementing responsible procurement practices and reusing and recycling materials in vehicle manufacturing. The move to hybrid and electric vehicles is also aimed at achieving sustainability, requiring the redesign of traditional supply chains.

Driving Forward: The Future of Automotive Supply Chains

Automotive B2B supply chain management is undergoing a massive transformation driven by automation, AI/ML models, predictive analytics, connected factories, and more. Embracing these trends will enable automakers to foster more efficient, sustainable, resilient, and intelligent supply chains while incorporating consumer demand for more innovation, electrification, and sustainability. 

Moglix can enable you to achieve such transformations through its supply chain management software, as it has already done for a leading automotive OEM dealing with a fragmented supplier base, disintegrated procurement data, poor payment terms, and working capital mismanagement. Moglix’s one-stop procurement solution helped the OEM save 2.5% of its carrying costs by optimizing inventory management and consolidating its supplier base. Download the case study for finer details or learn more about Moglix’s supply chain MRO solutions.

Gartner reports¹ that companies will allocate over 70% of the supply chain IT budget to growth and performance enhancements. Consequently, supply chain management using technology is critical for businesses wanting to expand and improve.

Clearly, supply chain automation is no longer a luxury but a necessity for businesses that want to stay ahead of the competition. Automation enables companies to overcome challenges in a complex supply chain environment. It streamlines inventory management, demand forecasting, MRO supply chain optimization, supplier relationship management, and more. 

But as the Gartner report revealed, merely adopting automation is not enough. To stay competitive, your automation technology should remain up-to-date. So how can you stay ahead of the curve? In this blog, we will discover the latest supply chain automation trends in 2024 that are reshaping businesses.

Transforming Decision-Making with AI

According to a PwC report², AI and ML-based technologies are taking the lead, with 22% of executives planning to spend at least $5 million. Companies can make data-driven decisions to adapt to changing business conditions using AI and, specifically, generative models. 

These models are trained on past experiences and decisions and keep humans in the loop for monitoring. And as you continue decision-making and recording consequences, you can retrain these models to augment decisions further.

Driving Efficiency with Digitalization

Over 86%³ of executives agree they need to continue investing in technology, with over 50% intending to focus on optimizing cost. Digitization enables companies to meet customer demands, manage supply-side challenges, and improve efficiency. 

For example, investing in the right tools gives you access to real-time analytics, which can improve operational stability and help meet customer needs.

Moreover, your supply chain management software should evaluate your existing systems and ensure seamless integration with automation technology, improving efficiency and helping you achieve a unified supply chain. 

Navigating Scope 3 Emission Control

In 2023, regulators and customers are expected to emphasize the control of Scope 3 emissions. According to KPMG⁴, over 50% of organizations intend to intensify their commitment to sustainable sourcing to fulfil their ESG initiatives.

Organizations will face the challenge of substantiating their emission reduction decisions, avoiding greenwashing accusations, and substantiating their low emissions. Ensuring your supply chain management software can capture real-time data across your supply chain for ESG measurement and reporting is essential.

Conclusion

Supply chain automation enables organizations to optimize their B2B supply chain management, which can help reduce costs, improve efficiency, and enhance quality. However, it is not a one-size-fits-all solution since different industries have different needs. 
Therefore, organizations must adopt a customized and flexible approach by partnering with a trusted supply chain solutions provider, such as Moglix. For instance, Moglix helped a leading tire manufacturer in India to improve its supply chain efficiency through vendor-managed inventory holding. As a result, it achieved 3% savings on total cost ownership. If you want to learn more about how Moglix can help you automate your supply chain and achieve your business goals, schedule a call.

Indirect spend categories, such as MRO, office supplies, and logistics, are often overlooked by pharmacos as sources of potential savings. Yet, by improving their procurement process, they can unlock millions of dollars in hidden value and enhance their resilience. How can they achieve this? 

The solution is MRO supply chain optimization. Pharmacos must standardise the practices, measure the performance, and use the appropriate tools and systems to manage the MRO supply chain. The question is not whether companies can afford to improve their procurement process, but whether they can afford not to. 
How does this work? Let’s find out in this blog; we’ll explore how adopting smarter procurement solutions by optimising the MRO supply chain can help Pharmacos cut costs.

MRO Supply Chain Optimization for Cost Efficiency

McKinsey estimates the pharma industry will lose an average of 24% of one year’s EBITDA every ten years.

How can such losses be reduced? Consider the following strategies and their benefits:

Strategic Supplier Management

Managing supplier relationships enable pharmacies to build long-term partnerships and gain greater negotiation power. It can save cost by helping you identify multiple procurement sources and reducing reliance on one supplier. 

Plus, MRO supply chain optimization can also help improve supplier performance, reduce risks, and benefit from economies of scale by establishing a clear governance structure. It can also segment suppliers based on criticality, spend, performance, and risk and develop customized strategies for each segment.

Maximizing Cost Control

Organizations can control purchase demand by minimizing consuming or procuring superfluous products. This reduces costs by lowering expenditures, eliminating waste, streamlining inventory levels, and aligning purchase decisions with clinical requirements and evidence-based practices. 

MRO supply chain optimization can assist by improving data analytics and providing visibility into MRO inventory, consumption patterns, and supplier performance.

Transforming Inventory Control

A way to improve inventory control and visibility is to centralize e-procurement and leverage technology for 100% spend management visibility, automated reports, and spending trend tracking.

This can help you save costs by streamlining your purchasing process, increasing compliance, and enhancing data quality and accuracy.

Additionally, MRO supply chain optimization can identify opportunities for improvement by using analytics tools that provide real-time visibility into spend patterns, inventory levels, and supplier performance and enable optimization and innovation.

Procure Smartly with Moglix

The healthcare industry is facing unprecedented challenges, which has disrupted the global supply chains and increased the demand for essential medical supplies. In such a scenario, pharmacos need to adopt smarter procurement strategies that can help them save costs, ensure quality, and enhance resilience. 

While supply chain risks are unavoidable, pharmacies can minimize their disruptive effects by adopting smart procurement solutions — and leading companies have succeeded in doing just that. 

A case in point is a leading vaccine manufacturer from India, which faced high inventory holding across all plants and volatile monthly MRO procurement spend due to the fragmented supplier base for MRO goods. 
By using Moglix Business’ digital platform and analytics capabilities, the company could streamline the procurement process, reduce costs by 10%, and ensure the timely delivery of critical supplies. If you want to learn more about how Moglix can help you make your supply chains more resilient, click here to schedule a demo.