APQC Content

Organizations Want to Modernize Indirect Procure-to-Pay

Spend Matters welcomes this guest article by Becky Partida, research specialist, supply chain management, APQC. Nearly 85 percent of survey respondents say their P2P process would benefit from modernization. Procurement managers, along with their counterparts in financial management who focus on accounts payable and invoice processing, are keenly interested in strategic benefits that can be obtained by modernizing processes in this area. A recent survey looked at what plans companies have for modernizing aspects of their procure-to-pay (P2P) process, with a focus on indirect spending.

Green Procurement and Efficient Order Processing

Spend Matters welcomes this guest article by Becky Partida, research specialist, supply chain management at APQC. Consumers and governmental agencies alike have been pushing harder for organizations to consider the environmental impact of their practices. As such, many organizations have taken an interest in making their supply chains more environmentally friendly. Data collected as part of APQC’s Open Standards Benchmarking in procurement indicates that, of the organizations surveyed, 65% have initiated green procurement policies. Nearly 17% of responding organizations indicate that they plan to initiate green procurement policies in the next 2 years, and 18% indicate that they have no plans to initiate green procurement policies at all.

Category Management: Strategic and Tactical Benefits

Spend Matters welcomes this guest post by Becky Partida, research specialist, supply chain management at APQC. Many organizations have looked to the strategic development of supplier categories to align procurement efforts with business goals and provide value to the enterprise. APQC has found that organizations with category management programs in procurement have significantly shorter supplier lead times as well as faster purchase order processing.

Promoting Dynamic Leadership in Supply Chain

Spend Matters welcomes this guest post from APQC. As supply chain becomes a more strategic function and senior supply chain professionals prepare to retire, the need to develop strong leadership capabilities in supply chain mounts. New research from educational non-profit APQC sheds light on which leadership skills are most important to develop and which development techniques will be most fruitful for supply chain professionals.

What Does “Best” Look Like in Procurement?

Spend Matters welcomes this guest post from Marisa Brown, director of research services at APQC. Thank you, Dale Earnhardt, for the reminder that everyone wants to be the best. But when it comes to procurement, what is best? What exactly does top performance look like? To answer this question, APQC analyzed data from its Open Standards Benchmarking in procurement to determine how the top 10% of organizations compare to the rest in 4 core areas: cost effectiveness, process efficiency, cycle time and staff productivity.

Automation Can Improve Procure-to-Pay Process

Spend Matters welcomes this guest post by Becky Partida, research specialist, supply chain management, from APQC. In any organization, procurement and accounts payable activities are inextricably linked. Becoming efficient in both types of activities should result in clear benefits to the entire procure-to-pay process, from the procurement function to accounts payable. APQC has identified business drivers of an integrated procure-to-pay process that lead to improvements and business results.

Involvement of R&D and Manufacturing Can Benefit Procurement

Many organizations recognize that the procurement function can provide the business with much more than simply getting the lowest cost for purchased materials and services. These organizations understand the potential for having procurement align its efforts with the strategies and goals of other business units as well as the enterprise as a whole.

In practice, this can take the form of involving other business groups and even external partners in the selection and appraisal of suppliers. According to APQC’s Open Standards Benchmarking in procurement, organizations involve a variety of groups in this activity, from marketing and sales groups to other suppliers, depending on the needs of the organization. However, the R&D/engineering group and manufacturing group are most often involved in this process. About 60 percent of organizations involve the R&D group in supplier selection and appraisal, and just over 56 percent of organizations involve the manufacturing group.

Taking A Formal Approach to Procurement Staff Development

Research has shown that talent management initiatives are a top priority for a majority of organizations. This can be especially important in the supply chain, as organizations struggle to recruit and retain top performers and ensure adequate skills development for staff. Yet many organizations have not established formal talent management programs for their supply chain staff. These programs can provide an integrated approach to work force planning, staffing, training and development, performance management, rewards, and retention of talent.

Sharing Real-Time Demand and Inventory Data is Only a First Step

Increased information visibility is a goal for many organizations. For the supply chain, many organizations look to the sharing of real-time, electronic demand and inventory levels both within the enterprise and with external partners to create greater visibility, which can lead to better inventory levels and shorter order processing times. APQC’s Open Standards Benchmarking in logistics reveals that a little over half of responding organizations (59 percent) have implemented programs dedicated to the sharing of real-time demand and inventory data. To determine the potential impact of sharing real-time demand and inventory data, APQC compared the logistics performance of organizations that have and have not implemented this practice.

Spend Analysis and Benefits to Performance and Relationships

In an effort to identify long-term savings, organizations often turn to spend analysis, the process of assessing the who, what, when, where, why, and how of an organization’s expenditures. For its supply chain function, an organization should ask three questions as part of spend analysis: How much are we spending? With which suppliers? And are we getting what has been promised? Many organizations have taken advantage of the information that spend analysis can provide their supply chain operations. APQC’s Open Standards Benchmarking in procurement indicates 90 percent of responding organizations have initiated spend analysis programs. Organizations with spend analysis have reaped benefits in the areas of cost effectiveness and process efficiency, and their procurement performance provides insight into their potential for improved supplier relationships.

How Organizations Assess Supply Chain Risk

Natural disasters and political turmoil have made supply chain management professionals think differently about risks to supply chain stability and resiliency. In 2013, APQC conducted a survey of supply chain and finance professionals to learn how they view and address three specific risks to supply chains: natural disasters (such as tsunamis and earthquakes), extreme weather events, and political turmoil in important world regions. The survey collected responses from 196 organizations that represented more than 22 different industries. Eighty-three percent of respondents had experienced at least one unexpected supply chain disruption in the last 24 months. Of that group, 78 percent experienced a disruption significant enough to have required the sustained attention or intervention of the top executives at their organizations.

How Organizations Extend Lean to Their Supply Chains

APQC recently conducted in-depth interviews of organizations that have embraced lean concepts throughout the enterprise, including in their supply chain functions. We focused on winners of the Shingo Prize, which recognizes organizations for operational excellence. Two of the organizations APQC interviewed, Lycoming Engines and US Synthetic, adopted lean processes internally but have extended these programs to their suppliers so that they can provide the best value to their customers.