ERP Boosts Procurement Creating a Channel for Innovative Business

ERP Boosts Procurement Creating a Channel for Innovative Business

Author: | Published: 07 Mar 2019

ERP or rather MRP systems for many years (in SYSPRO’s case, for 40 years!) have enabled Purchasing via requisitions through approval – then purchase orders with more approval – receiving via a GRN process – and finally payment of supplier invoices. This system still works fine and is best loved by administration and micro-managing Procurement Managers.

Then there’s Sourcing – the process of selecting appropriate suppliers for different products, setting prices with them possibly using the 3-quote-comparison process to find the best (or cheapest), so material planners just have to worry about how many to order and what delivery date.

 

JIT Procurement

SYSPRO realized procurement needed some new planning and control enablers. We added Material Requirements Planning to help work out what to buy when, in a planned and coordinated way, taking advantage of sensible order quantities, delivery lead-times, and batching rules.

Next came just-in-time (JIT) with sourcing from single “strategic” suppliers per product. Price, delivery, and quality agreed so purchasing was a “safe” admin process, replenishment signaled by kanbans and consumption of multiple BOM hierarchies in one back-flush transaction.

 

Preferred Supplier – A Move to Strategic Sourcing

So SYSPRO 8 brings cool innovations like Preferred Supplier to move towards strategic sourcing where managed/shared spend between a limited number of suppliers is possible. Or use a range of order policies like “cheapest preferred suppliers that can deliver on-time” – because cheap doesn’t always mean on-time

This functionality adds value for both customers using SYSPRO 8 and their suppliers – the customer gets preferential pricing/delivery while suppliers get guaranteed volume business from their customer. A longer-term collaborative horizon leading to strategic relationships. A win-win.

 

AI and ML Enhancing the UX

User experience is also enhanced combining Internet shopping and social media bringing “shopping cart” user-interface to make life easier or familiar for Internet shoppers. And SYSPRO 8 has built-in AI/ML (artificial-intelligence armed with machine-learning) which adds “Contextual Recommendation Engine” functionality to your procurement – you know “customers who purchased this item also purchased ### and &&& at the same time – would you like this too?”

So even in Procurement, SYSPRO ERP can provide infinite possibilities.


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