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The Supplier Information & Performance Dossier (part 6): Case Studies

By Jagriti Chhateja
In Procurement Technology
Jun 9th, 2014
0 Comments
3828 Views

In the post 1, post 2  and Post 3 of the series we discussed why Supplier Management is gaining importance and the importance of Supplier Information Management along with the Best Practices for the same. Post 4 and Post 5 was focused on the aspect of Supplier Performance, its importance and the best practices for Supplier Performance Management.

In this final blog of the series we will discuss how some of these Best Practices, enabled through Zycus’ Procurement Automation Solution, proved to be beneficial for a $3 Billion Dollar Cloud Computing Leader based in the United States and a $400 Billion Dollar Oil Giant based in the Middle East, in the following Case study:

For ease of understanding, let us refer to the $3Bn Global Cloud Computing Leader based in the United States as Company A and the $400Bn oil giant based in Middle East as Company B. Both of these companies had common objectives and were facing similar challenges with respect to Supplier Management, i.e.:

  • Management of supplier risk
  • Strict regulatory laws and audit requirements to be completed within limited time and budget
  • Lack of supplier validation and verification
  • Long supplier audit process
  • Lack of collaboration among internal stakeholders
  • Lack of clarity in communication with suppliers
  • Complex organizational hierarchy

The key point to be noted in this case is that, for company B, the cycle time for the supplier on-boarding process was as long as one year. The oil and gas industry generally has a very complex supplier on-boarding process. This is due to both internal and external factors:

1.  The major external factors (external to the organization) that affected the supplier on-boarding process are:

  • There are a large number of suppliers involved
  • Companies have to comply with stringent federal and financial audit laws

2.  The major internal factors (internal to the organization) that affected the supplier on-boarding process are:

  • There are many stake holders for each project, and
  • The approval processes are very long, making supplier on-boarding a serious challenge for company B

Zycus offered a unique way of implementation that was based on the objectives set by these organizations. Zycus’ Supplier Management Solution automated the otherwise manual approach adopted for supplier verification and validation by establishing a workflow process to capture all the relevant information needed to audit the supplier before on-boarding. With out-of-the-box, built in third-party integration within the Supplier Information Management (SIM) module, the cycle time for supplier on-boarding was reduced from 52 weeks to 5-6 weeks.

Zycus’ Supplier Performance Management (SPM) Solution also provided an intuitive graphical user interface which gave visibility into suppliers’ performance. Supplier scorecards and trend analysis are made available on dashboards; these trends and scorecards help the organization to continuously analyze and take necessary steps for mitigation of risk in dealing with high-risk suppliers.

For further reading, click on the download button below to access the whitepaper- Supplier Information and Performance Dossier.

Download Whitepaper

 

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