OVER the years, procurement has always been confined to the rustic limitations of manual paperwork and manual oversight.
Supply chain professionals are slowly moving away from the old days of having filing cabinets stacked with piles and piles of box files and binders of quotations.
The legacy procurement systems were often fragmented and heavily manual. On the face of it, the manual procurement system works, but it is very slow, prone to mistakes and often leads to unnecessary bottlenecks.
It involves an endless stream of paperwork, back-and-forth e-mails, and last-minute urgent phone calls to the vendor community. Procurement manual processes do not just slow things down, they have ripple effects on procurement performance outcomes.
With traditional procurement, there are many busy bodies involved but the strategic impact remains an elusive shadow. Manual procurement processes have always been at war with reality because procurement is a space where the rules of the game change so dramatically that the old playbook can easily become obsolete.
Supply chain professionals must, therefore, be allowed to say goodbye to the manual paperwork vortex.
Manual procurement processes ordinarily involve multiple and often times independent processes with a significant probability of errors. Typical of manual systems, the occasional typo is inevitable. This is largely due to the heavy reliance on legacy procurement tools that create data silos and limit visibility.
Such situations will force procurement professionals to spend a significant number of man-hours searching for insights buried under an avalanche of information.
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Digital procurement means letting go of manual data entry, manual paperwork and manual requisitions. Automation of procurement systems were designed with a view to significantly reduce the administrative burden of manual procurement data, normally found scattered in spreadsheets.
With manual procurement, it will always remain a challenge to manage, control, and oversee multiple versions of the same process. Procurement professionals have, therefore, made peace with the simple reality that new technologies are revolutionising procurement processes, turning traditional, manual workflows into streamlined, efficient and data-driven operations.
The introduction of digital tools in procurement will allow supply chain professionals to say goodbye to the endless paperwork, manual tasks, manual data entry and scattered spreadsheets in the procurement spaces.
The digital platforms will take away the heavy lifting off procurement shoulders, replacing manual and siloed systems. The power of digital procurement lies in replacing slow, error-prone manual processes with fast, data-driven workflows.
The introduction of digital procurement platforms serves as the solution to migrate the entire source to pay procurement process flows into a single unified system. Digital procurement includes leveraging tools such as digital sourcing platforms, e-procurement software, contract lifecycle management platforms, supplier management platforms and data analytics platforms. Such systems will be regarded as vital for strategic change, opening up a myriad of opportunities for efficiency, transparency and improved performance.
Digital procurement platforms are increasingly becoming a staple in the supply chain landscape offering smart and sleek interfaces that seek to overhaul traditional procurement processes.
The new digital technologies such as artificial intelligence, blockchain technology, big data analytics and internet of things are reshaping the supply chain management terrain.
The new era of procurement is digital. As the future unfolds, the digital revolution is altering the landscape of supply chains. Digital procurement intelligent supply chain tools within spend management platforms can use historical data to predict future spending patterns.
Organisations that understand and adapt to digital procurement will find it easy to stay at the helm of their industries while the rest will struggle to compete. Digital procurement integrates artificial intelligence-driven risk assessment tools with a view to monitor supplier performance and the financial stability of the supply chain partners.
These insights allow organisations to detect risks early on and stick to only those select reliable suppliers. It is not just about implementing new software. It is about transforming the supply chain landscape.
Digital procurement tools are designed to accommodate the seamless integration with enterprise resource planning (ERP) systems, enabling seamless data exchange and synchronisation between procurement and other functional areas such as finance, production, manufacturing, inventory management and marketing.
Such tools will facilitate the repositioning of your organisation as a central hub for the next chapter of value creation. It is the recipe for today’s high-performing supply chains, accomplishing more or less everything there is to achieve in business.
Its strength lies in creating order from chaos. Digital technology is the true brick and mortar of any strategic business initiative. The requirement for technology is no longer just a strategic imperative, but it is a contemporary reality that we need to embrace.
The realisation of this emerging reality has resulted in the increasing adoption of digital procurement. Procurement analytics tools will be deployed to run in the background. These tools will spotlight spending patterns, and any yawning gaps and blind spots will be exposed to the surface through automated scans.
The benefits of digital procurement are staggering. The digital procurement tools provide supply chain templates, workflows, and electronic signatures to streamline the contract lifecycle management process flows, ensuring there is strict adherence to legal and regulatory requirements.
Digital procurement will assist in contract management by automating the creation, tracking and storage of supply chain contracts and service level agreements.
Contract management software enables businesses to track key supply chain contract deliverables, monitoring contract administration processes while being alert on contract monitoring, contract renewals and or contract amendments.
Digital procurement will also seek to improve contract compliance through end-to-end audit monitoring of delivery milestones. Redlining of contracts and manual approvals of same will cause delays in the procurement cycles — slowing time-to-value.
The procurement module will easily talk to the procurement contract repository platform, which will then communicate with the supplier management platform, creating an integrated system that provides end-to-end visibility of the procurement cycle.
Supplier management systems tools are designed to provide centralised repositories for supplier information, enabling supply chain professionals to maintain up-to-date records of supplier contracts with their terms and conditions, delivery timelines and performance evaluations templates.
Without automation, it is easy to overlook renewal dates, expiration clauses or regulatory requirements. Without centralised visibility, off-contract or unauthorised purchases can bypass procurement. Instead of reacting to problems, you can proactively manage risk, cost and performance with intelligence built into every step of the contract management lifecycle.
It must be done on time with the precision of a fine watch with absolute predictability. Reducing exposure and improving audit readiness is also key.
Supply chain professionals are required to demonstrate their compliance intentions with readily available factual evidence. The system can flag non-standard clauses automatically for legal review.
Blockchain technology is credited for ensuring that every procurement transaction is securely recorded and cannot be altered. This technology’s importance has been enhanced by the establishment of an unalterable transaction history, which is seen as a gateway of bolstering traceability and responsibility. With this technology, supply chain professionals will be in a position to validate every node of the supply chain, preventing fraud in the process.
The technology can assist businesspeople to track commodities from source of origin to supermarket or to a pantry shelf. This will assist in building trust, combating fraud while ensuring compliance with regulatory standards.
Building trust with consumers who are overly concerned with the origins of their raw materials is now key. Blockchain creates a decentralised ledger system, which increases traceability and transparency, making business transactions very secure.
The creation of smart supply chain contracts, which are powered by blockchain technology will enable procurement transactions to become immutable, transparent and decentralised.
Digital procurement cannot exist in silos. A procurement function is only as strong as its suppliers. Digital procurement platforms unify purchase order processing, invoicing processing, and creditors’ payments with supply chain partners into a single, user-friendly interface.
Automated invoice matching and digital purchase order approvals are easily achieved through seamless integration with ERP systems ensuring the existence of a smooth and error-free transaction process.
The digital platform functions as a unified interface. Various functional departments will be in a position to work from a shared data set with the singular view to improve coordination and eliminating siloed workflows.
It enables a proactive approach to managing supplier relationships using supplier portals and scoreboards, collaboration tools and predictive analytics. All operational activities are conducted through a single interface.
These platforms will serve as a crucial bridge between suppliers, manufacturers and end consumers, facilitating end-to-end visibility. Digital platforms offer mobile apps which can also assist procurement professionals to manage various procurement workflows while on the move.
Artificial intelligence-driven spend analysis tools will provide deep insights into spending patterns, cost-saving opportunities and procurement inefficiencies.
By leveraging big data and analytics, organisations will be in a position to identify current trends, optimise supply chain contracts and implement strategic sourcing initiatives.
These tools will flag weak links before they can cascade into bigger problems. It is like having a crystal ball for your supply chain. This will assist the business in identifying supply chain trends and the quantification of supply chain risks.
Automated tools are also important for triggering action as soon as inventory levels drop to a certain point. Procurement professionals will, therefore, place purchase orders with suppliers before yawning gaps turn into delays.
Purchase orders will be based on scientific demand, not from outdated stock schedules or from guesswork by suppliers. The connected digital ecosystem will assist in the provision of instant feedback on the status and location of products.
Smart sensors will assist in the transmission of real-time data regarding the location, temperature, humidity or any other critical parameters associated with the movement of commodities or any other consignment.
Since the world has always been work-in progress, the adoption of digital procurement is long overdue. Digital procurement is the cynosure in the realm of supply chain management.
It removes the stress of second-guessing every decision. It is the invisible ingredient that makes everything else possible. Relying on manual procurement is akin to operating with a blindfold on.
The manual system is largely reliant on antiquated systems such as manual paperwork or e-mails and spreadsheets. Analogue procurement processes are no longer competitive. Digital procurement reflects a continuous pursuit of procurement excellence.
Digital procurement is a gentle gift from the information communication technology industry. The quiet, behind-the-scenes adoption of digital procurement that truly drives success might not make the headlines, but it makes all the difference. The potential benefits are staggering. It is a new win for both profit and purpose.
- Nyika is a supply chain practitioner based in Harare. — charlesnyika70@gmail.com
