To listen to the podcast - https://podcasters.spotify.com/pod/show/nlg-talks/episodes/Supply-Chain-Series--Navigating-Source-To-Pay-for-Supply-Chain-Success-e2ibt7j
In this podcast session, I am talking to Eshwar and Izabella on the S2P functionality and its implementation in organizations.
What is Source To Pay?
Source to Pay (S2P) is a comprehensive process in supply chain management that encompasses all activities from sourcing and procurement to payment processing. It involves the following key stages: Sourcing Strategy, Supplier Management, Contract Management, Procurement, Purchase Order Management, Invoice Processing, Payment Processing, Supplier Collaboration, Compliance and Risk Management, Performance Monitoring and Reporting
What is the difference between S2P and P2P?
Source-to-Pay
Process: Covers the entire procurement lifecycle starting from identifying sourcing needs, selecting suppliers, negotiating contracts, managing supplier relationships and finally processing payment. It compasses strategic sourcing, supplier management, and procurement operations.
Advantages: Can lead to cost savings and efficiencies throughout the entire organization, not just in procurement department
Disadvantages: May be inflexible and not suitable for all businesses.
Procure-to -Pay
Process: P2P specifically refers to the process of purchasing goods of services, receiving them, and then processing and paying for them. P2P focuses more on the operational aspects on procurement ensuring that goods and services are obtained efficiently and that payments are made accurately on time. (Manage Demand on S2P Cycle)
It typically includes steps like requisitioning, ordering, receiving, invoice processing and payment.
Advantages: Easier to tailor to specific needs than the Source-to-Pay model
Disadvantages: Less efficient than the Source-to-Pay
How can organizations effectively integrate S2P and P2P processes for seamless procurement?
Unified Technology: Invest in procurement software that seamlessly connects both S2P and P2P processes, allowing for data sharing and real-time visibility.
Cross-Functional Collaboration: Foster collaboration between procurement teams involved in sourcing and purchasing to ensure continuity and alignment.
Data Integration: Ensure that data flows smoothly between the two processes, enabling insights and decision-making across the procurement spectrum.
Standardization: Implement standardized processes and workflows to minimize friction during the handover from sourcing to purchasing.
Performance Metrics: Develop shared KPIs that measure the effectiveness of both S2P and P2P, promoting a unified approach to procurement.
What are the emerging Trends in S2P
Digital Transformation: artificial intelligence (AI), - Spend Analysis, Supplier Selection & Evaluation, Forecasting, machine learning (ML), - Data Analysis and Pattern Recognition, Predictive Analytics, Supplier Segmentation and Classification, Automated Decision-making, robotic process automation (RPA), - Automated Data Entry, Invoice Processing, Reconciliation and Compliance, Supplier Onboarding.
Blockchain.
Transparency and Traceability
Smart Contracts
Supplier Verification
Supply Chain Visibility
Payment Processing
Risk Management
Data Integrity and Security
Audit ability and Compliance
3. Predictive Analytics:forecast demand, optimize inventory levels, anticipate supplier performance, mitigate supply chain risks. Advanced analytics tools help in making data-driven decisions, improving sourcing strategies, and enhancing overall procurement outcomes.
4. Supplier Collaboration Platforms: seamless communication, information sharing, collaboration on sourcing projects, supplier performance management.
5. Sustainability and ESG Considerations: Evaluating suppliers based on their sustainability practices, ethical standards, carbon footprint, and social impact, aligning with growing stakeholder expectations and regulatory requirements.
6. Risk Management Solutions
7. Integration of IoT and Supply Chain Visibility
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