Put yourself in the shoes of the procurement manager of a huge apparel company. Think about all the activities you are in charge of and, please, don’t panic.
Deciding how much to order, when, where, for which price, or when to pay it are only some of your tasks. Yes, it’s about the ordering process, but not only. Many departments and areas of the company will be affected for your decisions, so it’s better if you’re not mistaken much. If you do, you will be in trouble.
At this point, probably most of you will be thinking about never applying for this job position, but it would be, for sure, a very poor decision. We are sure that the new trend on the procurement area will clear your mind.
What are this magic solution we are talking about? E-procurement.
A trendy word that has appeared to stay for a long time. It refers to a system based on the use of internet or other information and communication systems to manage the procurement of goods and services of the companies.
Future? No, present. Yes, this system is in its initial steps, but there are already companies that are taking advantage of its benefits. One of these is Zalando, an e-commerce in the fashion industry that has implemented e-procurement in order to improve its supplier collaboration.
This e-solution allows the company to merge all the ordering process into one aligned process, so optimizing the procurement through the automation of the current processes.
All this is fine, but, how it really works?
In the Zalando’s case, the company uses two electronic procurement systems for the purchase-to-pay process (P2P) and the supplier management. As a result, its orders and the suppliers’ invoices can be handled in a more efficient way.
In practice, what happens is that the orders of the Zalando’s employees are directly forwarded to the suppliers in the form of a Purchase Order via the procurement platform, and each supplier can edit online the orders it has received.
This procurement platform can also be used for the suppliers to directly send their invoices to Zalando, saving time and costs for both sides. Also, it speeds up the payment of the invoice, as Zalando receives it earlier and can automatically register it.
The advantages do not end here. On the suppliers’ side, their registration to the Zalando’s supplier platform allows them to keep their data updated autonomously, and also to show their products’ offering to the firm, making easier the purchasing process.
Zalando offers different options for the suppliers to receive orders and send invoices. While the company forces suppliers to receive its orders using an e-Procurement system, it allows them to use traditional models (as mail or paper-based) for the invoicing process, although always pointing out that, in these cases, they should expect a longer processing time.
All these automatized processes result in a higher degree of compliance in the orders, invoices and payments, due to the fact that these are consistent and transparent processes. In other words, as both sides have the same information and this is easily available, the mistakes will be minimized.
As you know, business errors mean costs and they are not well received for your superiors. So, no matter in which are a company works, we won’t hesitate implementing any system that allows to reduce mistakes.
Taking into account all we have explained, what’s now your opinion of the procurement manager position?
Alba Martinez and Anna Colomer
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