Purchasing Automation Service Solution (PASS)
The challenge: can you streamline purchasing operations without alienating valuable suppliers?
In today’s competitive markets, the need for operational efficiency can sometimes seem at odds with the need to build and maintain strong relationships with your company’s suppliers.
Universal electronic connectivity with suppliers can help reduce the administrative costs of manual, paper-intensive processes in accounting, logistics and purchasing. It also helps eliminate errors in the purchase order process. Ideally this is accomplished without forcing suppliers to incur significant IT investments.
An additional challenge is the wide range of supplier connectivity capabilities. Some suppliers utilize EDI or other e-commerce systems; others prefer more traditional purchasing processes.
What we’ve learned:
- Less than 30% of a company’s supplier base (the largest suppliers) are likely to have EDI capability.
- Those “hub” companies often maintain another set of processes to support the remaining 70% of the supplier community, consuming time, money and human resources that could be better spent on other initiatives.
- Most suppliers want a solution that offers them full electronic capability without the usual high technology barriers, a minimal investment/start-up fee, low cost of ownership and the ability to use the solution with multiple customers.
- Since up to 80% of a company’s supply chain are small to medium-sized enterprises, any successful supply chain integration effort must recognize and scale for “high tech,” “low tech” and “no tech” suppliers.
That is exactly the solution MotherLode North America offers.
The solution is PASS
PASS is a centralized operating service that bridges your company’s electronic purchasing interface and your suppliers’ systems, electronic or not.
The flexibility to accommodate both electronic-based and legacy, paper-based supplier systems is what makes PASS a valuable service. Your company does not need to buy additional software applications, and your suppliers do not need to modify their systems or operations. Instead, PASS uses a powerful combination of technology, processes and resources to be able to “talk” with all your suppliers, both in-coming and outbound communications.
The result? Total supplier electronic procurement connectivity and cost savings!
According to the Aberdeen Group, e-procurement can garner savings throughout the business:
- 5%-10% in material costs
- 25%-50% in inventory carrying costs
- 40%-45% in controlling maverick purchasing costs.
Many enterprises achieve six-to-seven figure cost savings by implementing this service.
How PASS works
The service establishes a standard electronic interface between a “buying” (or “hub”) company and its suppliers. This interface electronically transmits a wide range of documents:
- purchase orders (PO) and PO acknowledgements
- advanced shipping notices
- shipping labels (with or without bar codes)
- invoices and other purchasing forms that are part of the purchase process flow between the buyer and the supplier.
PASS is independent of back-office software technology. It requires no additional technology investment by the buyer or the supplier. And your suppliers can use the service to transact business with multiple customers.
In most cases it takes less than 90 days to get the PASS service up and running so your company can quickly begin to reap the rewards of e-commerce.
Other benefits of PASS include:
- A comprehensive, non-exclusive enablement program with resources to connect hundreds of supplying companies.
- A proven process to insure quick implementation with effective supplier communication.
- Ongoing technical support that provides the assistance you and your suppliers need to maintain smooth operation.
Don’t let real ($) benefits PASS you by!
PASS’s elegant, efficient structure delivers immediate and long-term value to your company.
- Reduced purchase order processing costs
- Reduced paperwork
- Fewer shipping errors
- Improved turnaround = lower min/max inventory levels
- Improved planning/scheduling processes because delivery dates are received electronically
- Increased efficiency = more resources for new projects
- Streamlined supplier alliances