Collaborate: Collaborate, as a supply Hahn execution company, integrates company specific ERP functionality supporting the complete product flow from manufacturing & inventory management to warehouse labeling & shipping. Situation: www-r and one of its consulting firms had signed an agreement with a large automotive Original Equipment Manufacturer (MOM) to outsource the entire MR. sourcing and purchasing operations and to manage the vendor relationship in order to reduce the spend. The plan of action is to strategically reduce the number of suppliers and integrate the automation process with those suppliers.
Before: The insulting firm targeted the MOM for this proposal because it identified the following issues In the Memo’s MR. purchasing system: large supply base with 1,800 vendors, excessive number of employees at different levels: purchasing group. Store, plant and HER. And unofficial communications between vendors and MOM plant managers. The most inefficient and time consuming factor was exchanging all the information and data in the form of hard copy documents and Eddies. After: The consulting firm identified the suppliers with strong technical capabilities resulting into 300 suppliers.
WET Integrated the automated purchasing process with the 300 suppliers in order to maximize and maintain the accuracy of business parameters around the cost- effective process of POP and Invoice management. It minimized the human Interaction that helped reducing the unofficial communications. Challenges and Decisions The collaborative efforts of WET faced a number of challenges to effectively act as the transaction hub between the MOM and the suppliers. Firstly, the issues on Pop’s were resolved over the phone, which was considerably affecting the accuracy and timeliness of the order fulfillment cycle.
Secondly, limiting the program to the new reduced supplier base made the spot buy transactions Infeasible. WET must provide a solution that would not only automate the management of Pop’s and invoices, but also minimize the impact the solution would have on the large supplier base in terms of investments in staffing and IT. The consulting partner of WET had agreed to launch the new software solution In short time. Besides that, WET was dealing with a large heterogeneous supply base. This required supplier-specific customization to meet the needs of both the suppliers and MOM.
WET has a number of options that it must evaluate over the short and long term to make the right decision: Option 1: Oracle’s ‘Supplier Oracle’s ‘Supplier presented the advantage of having no additional layers of data as WETS enterprise software model was built around the Oracle’s ERP system. Since supplier only required an Internet account and a Web browser, it placed no financial or IT burden on suppliers. However, ‘Supplier would require some training to suppliers who are not familiar with Oracle. Besides that, supplier did not offer a feature to upload documents in the early stages of fulfillment.
This would not enable WET to prevent errors, view accept/reject information and estimated delivery dates. Lastly, supplier was a standard solution with no or very limited flexibility. Any customizations in supplier would be difficult and expensive for WET. Option 2: Internally-developed solution An internally developed solution would be entirely developed based on the needs of WET and the supply base. Besides that, WET would not only be able to leverage the expertise of its skilled team of engineers, but also have a complete control on the features of the solution.
This would ensure that the solution is fully customizable according to the needs of supply base. However, an internally developed solution would require a very high expertise on the part of WET. WET would need to develop this in a short time and at a very high cost. It may also take WET longer to launch the MOM program due to the complexity and size of it. Along with these, WET may require more IT resources than its current capacity, and also have to conduct a lot of maintenance work due to the customizable implementation at each end. Option 3: pock
One of the biggest advantages of POCK was that it was highly customizable. Pock’s rules-engine allowed WET to control the flow of information without any recoding of the underlying software. This would customize the tool in accordance to the needs of the Wet’s business process. Secondly, Pock’s highly intuitive interface required minimal training as it provided a Web-based navigation system. Also, the interface enabled the suppliers to configure screens according to their needs. Lastly, POCK differentiated itself from other solutions by giving more control to the manufacturer.
It provided prevent-controls to make sure manufacturer does not receive a shipment when not ready. Besides that, better control also meant additional tracking ability and a streamlined accounts payable and POP settlement process. Impact of POCK Implementation Implementation of POCK brought a number of benefits in the entire order-to-delivery business process. Benefits to MOM One of the biggest benefits of POCK was that the MOM was now dealing with a single decentralized suppliers. MOM also got excellent visibility on timing and contents of efferent shipments, enabling it to evaluate performances of its suppliers.
Benefits to POCK enabled WET to collaborate with thousands of suppliers with limited human resources, low integration, implementation and training costs. It was also able to reduce its customer service tasks significantly. POCK also enabled WET to reduce costs as the invoices were received and processed online, leading to fewer manual entries and inquiries. Lastly, POCK enhanced the collaboration between WET and suppliers by reducing the non-conformance’s in the form of wrong quantities, incorrect Pop’s and missing lines.
Benefits to Suppliers The small suppliers were able to see the accounts payable process. This enabled them to receive their payments in a much faster way. Also, the implementation of POCK helped the large suppliers cut down labor costs, as they were no longer required to have representatives at assembly plants for flow of information. Benefits to Collaborate Collaborate experienced a great learning curve in this entire customizable- implementation cycle. With the feedback it received from WET, Collaborate was able o enhance POCK by introducing standard functionality and mastering the rules engine.
Additionally, Collaborate built a close relationship with WET, which can help it in getting future business opportunities. Future Recommendations: Long term Collaboration For both companies, WET and Collaborate, technology, creativity and innovation are the driving factors for growth. Both companies tend to extend their capabilities to be more efficient and creative. Our long term recommendation is that WET and Collaborate should collaborate to develop a customized industry specific program eased on the existing POCK so that WET can directly launch the program for its future clients.
Additionally, the POCK system should be made more efficient and robust by implementing the following add-ions: Data Centralization An efficient procurement system captures and navigates the right information from the POs, email alerts, and invoices at the right time and enables the suppliers and MOM to track the payments at each level. In order to tighten the control of suppliers and to maximize the invoice accuracy, the customer receipts from all MOM plants would be saved electronically into a centralized database that would be visible to all suppliers and MOM.