Business Scenario
Key Performance Indicators
Partner Opportunities
See also
Procure to Pay is the process of obtaining and managing all raw materials needed for manufacturing. This cycle starts with the source selection, auditing followed by procurement of goods and services. The contracts with the suppliers are managed and can also include supplier managed inventories or direct inventory visibility. It also comprises direct procurement requirements through conversion from demands to purchase orders and confirmation of goods receipt. The incoming materials are then inspected and posted into inventory as part of managing the warehouse. The last activity in this cycle is payment of the suppliers which consists of receiving, entering and checking vendor's invoice for correctness.
Business Goals & Objectives
Lowering Working Capital
Lower work-in-process inventoryReducing Operating Costs & Increasing Efficiency
Improve procurement processesIntegrate processes across divisions and functions
Processes
Sourcing & Planning | Improving the product quality and lower the costs for material acquisition by qualifying a supplier is mandatory for companies in a regulated environment. A supplier qualification that is compliant to regulatory requirements (e.g. 21CFR Part211) includes the inspection of incoming goods, an audit of the vendor and contractual agreements about product quality and financial conditions. These preconditions enable a pharmaceutical manufacturer to plan the procurement of the demands that results out of an MRP run or manually created purchase requisitions.
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| Supplier Collaboration | Supplier collaboration provides a cost-effective way for companies to improve replenishment cycles and quality of materials delivered by a trusted supplier. Order collaboration capabilities provide suppliers and buyers with a streamlined order management system, a user friendly interface and comprehensive search options. The collaboration with suppliers can be extended to a vendor managed inventory, where the manufacturer grants authorization to manage his inventory.
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| Procurement | Improving procurement processes and integrate them across divisions will lower the costs of procured good and the work-in-process inventory. The procurement process consists of the administrative functions, such as contract management and the creation of purchase requisitions. Requisitions have to be converted to purchase orders or delivery schedules for a scheduling agreement and the fulfillment of the documents after electronic transfer to business partners has be to monitored.. After successful delivery of the purchased goods, the follow-up operational tasks such as supplier payment, warranty issues have to be performed.
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| Receiving and Inspection | Deliveries to the Pharmaceutical companies are subjected to stringent quality procedures to improve the product quality. Warehouse personnel receive the goods, followed by incoming inspection by quality control. The inspection costs can be reduced by use of quality certificates send by qualified suppliers. The stock is moved to quarantine inventory and after the lot disposition they are moved to the appropriate warehouse location. The integration of warehousing and quality control will the operating costs.
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| Inventory Management | The inventory management comprises control of the stock transfers within the warehouse or intercompany distribution centers, display correct quality status and the accuracy of the physical inventory. Stock status has an impact on production scheduling i.e. a not released material lot must not be used or reserved for production. Automated warehousing and reduction in inventory carrying cost are key strategic goals pursued by the Pharmaceutical companies.
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| Reporting | The reporting provides accurate real time visibility into the inventory and status of the purchasing documents during various stages of procurement. Proactive monitoring enables a correct supplier scorecard by accessing historical data about the reliance on the delivery schedule and the quality of the delivered materials. The reporting enable pharmaceutical companies to focus on suppliers with a reliable product quality and low supplier lead time.
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Partner Product Available
SAP Product Available with Future Releases
Partner Product Available with Future Releases
Future Focus
