Case Studies | Optimizing Procurement Efficiency of Catalogue vs Non Catalogue PO


Introduction
A Leading Manufacturer of Electronic Components based in India is struggling with an inefficient procurement process. The company routinely handles Purchase Orders (POs) for both material (Catalogue) and non-material (Non-Catalogue) items, encompassing raw materials, components, and services. Their existing Procurement process is a hybrid of Manual and semi-automated processes.
The absence of a structured procurement process has resulted in a lack of clarity and efficiency within the company’s systems. This inadequacy results in inaccurate and incorrect data input, leading to delays, errors, and ultimately increased operational costs.
The company is therefore seeking solutions to identify and fix these inefficiencies, aiming to streamline their procurement operations
Products & Service
Electronic Components
Industry
Manufacturing
Employees
600
Revenue
US$8 Million
The Problem Statement
Absence of Material Level Reporting:
Due to the absence of material numbers on the Purchase Orders, there is a lack of material-level reporting regarding quantities and values. This absence also prevents the creation of material-based key performance indicators (KPIs) by users.
Incorrect Commodity Classification:
Materials from the same commodity are procured under both catalogue and non-catalogue Purchase
Orders, leading to incorrect commodity classification.
Lack of Differentiation:
The procurement team struggles to differentiate between catalogue and non-catalogue Purchase Orders, leading to confusion and potential errors in managing different order types.
Manual Approval Processes:
Approval workflows for both catalogue and non-catalogue purchase orders are predominantly manual, causing delays and bottlenecks in the procurement process.
Value-Driven Results
Automation in PO Creation
20% increase in the creation of cataloguebased PO through automation.
Reduction in Manual Approval Workflow
Automated approval workflows implemented for both material and non-material PO, resulting in a 50% reduction in manual intervention within 6 months.
Master Data Correction
By analyzing existing data and defining new data quality rules, commodity data accuracy improved by 60%.
Improvement in Non-Commodity PO Evaluation
Parameters for Data correction have been established to evaluate non-material POs leading to a 15% improvement in commodity data in the near quarter.
Project Insights
No. of Processes Improvised: 3 Processes
Processes Improvised:
- Catalogue Management
- Master data Correction
- Commodity Classification
Project Timeline: 3 Months
Project Team Members:
- Project Manager
- Business SME
- SAP Signavio Expert
- Data Engineer
SAP Signavio Tools Used:
- SAP Signavio Process Intelligence
- SAP Build Process Automation
- SAP Signavio Process Manager
The implementation of data-driven strategies and automated solutions has successfully addressed the challenges faced by the procurement team. Overcoming theseย challenges has resulted in significant process improvement, enhancing efficiency, reducing costs, and ultimately improving overall business performance.
Thus, the collaboration of a dedicated project team and the utilization of SAP Signavio tools showcase the transformative impact of streamlined processes on Procurement Operations.