Managing your supply chain – the key to resilience
By Joe Catling, Business Development Manager, Proactis
There is a lot of attention on Supply Chain Resilience at the moment, and rightly so. But it’s now time to focus on how to achieve such resilience.
Firstly, and it goes without saying, managing your supply chain, and the risks involved, is absolutely critical to your organisation’s financial health and competitive performance. As we are seeing, the negative impact of global events on an organisation’s financial position or reputation is potentially huge, even devastating.
But effective management of your supply chain is the only route to resilience, as it:
Ways to improve Supply Chain Management
Automate where it counts
- improves the financial position of your organisation by delivering value across the chain;
- plays a significant role in customer satisfaction through the delivery of products and services;
- reduces operating costs from Procurement activities, through operations and logistics functions and throughout the whole supply chain.
It’s quite common for Accounts Payable teams to deal with surprise invoices that lead to time-consuming investigations and delays in invoice processing and payments. These delays can strain relationships with suppliers and impact the supply chain. Solutions with Accounts Payable (AP) automation
that accelerate turnaround times, as well as reduce potential for manual errors and delinquent payments, all help to increase retention and strengthen relationships with existing suppliers.
As automation takes manual tasks out of the picture, the complexities of many processes are eliminated. For example, process efficiency increases as paper invoices are replaced with digital invoices that can be approved within minutes, automatically.
Pay on time
Following on from this, automation also ensures that invoices are processed faster and payments are made on time. Timely payments help build trust and improve relationships with suppliers. With a reputation for paying on time, or even having a mechanism to pay invoices early, and making it easy for suppliers to manage their accounts receivables with you, suppliers may be more willing to give your organisational preferential prices and terms.
Data-driven decisions: With automation, the AP team can access, and work with, a large volume of data. It can use this data to identify process gaps and improve back-office functions. In addition, data analysis tools provide the AP team an opportunity to support more strategic initiatives.
Collaborate, and reduce costs
Work together with suppliers on how to reduce costs and understand cost structures. Look at options with suppliers, such as different ways of payment. Don't just keep doing the same thing, just because that's the way you've always done it. You may even find yourself in a position to take advantage of any early payment discount terms your suppliers may offer, or accelerate payments to your suppliers.