Insights

14 Nov

Posted at 12:00h in AP Automation, Purchase to Pay by
1 Like

 Israel Aerospace Industries (IAI) has revealed it is now managing its entire procurement and financial activities with its suppliers in a paperless and automated environment.

Over 3,000 suppliers exchange over 20,000 documents each month – from RFPs through purchase orders and invoices to payment confirmations – creating an efficient and environmentally-friendly process with saving of up to 50% in operational resources compared to the manual procure-to-pay process previously in place.

This transformation is enabled by the Nipendo Supplier Cloud platform, which allows organizations to electronically collaborate with all of their trading partners while enabling seamless integration with their ERP systems. With over 3,000 IAI suppliers using the platform and more than 90% of invoices electronic, paperless process enables dramatic error reduction, savings of up to 50%

14 Nov

Posted at 09:30h in e-invoicing, Electronic Invoicing by
1 Like
For years the growth in the use of electronic invoicing was hampered by a very simple fact. There was nothing in it for suppliers. Think about it. A supplier wants to be paid and needs to send an invoice. Whether that’s a paper invoice in an envelope with a stamp on it or an email makes very little difference. The cost of a stamp has got nothing to do with it – unless a supplier is sending many very low value invoices, the postage cost is trivial. While only a few customers demand electronic invoicing, while the business world was largely paper based and while suppliers were being asked to subsidize the cost of their customers' e-invoicing programs by paying for the privilege of sending an invoice, there was always going to resistance. But the world has now changed and the business case for e-invoicing is now fundamentally different to the one-sided calculation with all the benefits loaded on the customer side that would have been built perhaps 5 years ago.

13 Nov

Posted at 02:24h in Purchase to Pay, Purchase to Pay Process by
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The purchase to pay police aren’t naturally an attractive bunch of people. Like auditors, they only bring ugly messages about compliance and process. And they don’t make their lives easier by tarnishing further their image by moaning about their lot. So how do you get the perfectly rational P2P messages across effectively? How do you prevent it from being perceived as a pointless dictat from an area of the business too remote to understand commercial realities?

08 Nov

Posted at 12:07h in AP Automation, e-invoicing, Electronic Invoicing, EU Commission by
1 Like
A few weeks ago, somebody asked me why supply chain finance had suddenly burst into life - especially in the UK - with a new breed of SCF providers appearing at the same time?. Why is it that in the space of a few months the market place seemed to blossom? Tungsten bought OB10 to create a new SCF proposition. Crossflow Payments emerged in the summer and there were others. Why the sudden explosion? There was nothing sudden about it. These operations have years of planning and preparation behind them. It appears sudden – but it’s not. And we’re about to see something similar happen in Europe around e-invoicing.

07 Nov

Posted at 13:58h in Global Sourcing, P2P Europe, Procurement Process, Public Sector Procurement by
1 Like
On 8 October 2013 the Aswad Composite Mills factory, in Gazipur, outside Dhaka in Bangladesh burnt down. Seven workers were killed and a further fifty were injured in the fire. As newspaper reports state, the fire came soon after eleven hundred workers had been killed in a blaze at the Rana Plaza factory, a tragedy which led to more than ninety High Street retailers reaching an accord to ensure fire and safety inspections at their suppliers’ premises. The Aswad Composite Mills were not amongst those to be inspected because they were not perceived to be in the direct supply chain of the Western retailers.

I thought of these tragedies when reading the draft Directive on public procurement regarding use of “life cycle costs” in assessment procedures. I am aware of the possibility of bathos in that sentence – I was reflecting on the very real human cost of supply chain decisions the further one looks back through the tiers.

06 Nov

Posted at 08:42h in Prompt Payments by
1 Like
There's a particular moral standard that simply doesn't stack up in my view. It's the standard that claims that if it's legal, it's OK. If it's within the rules, it's fair. We see it all the time. Employees who feel they are unfairly treated are told "If you don't like it, you know were the door is". Put up or shut up! The employer knows that the employee needs the job and if they do walk, there's plenty of potential replacements. Whether or not the employee is right in their complaint, the employer is using or even abusing their power over their staff. It's not fair. Large corporations spend huge sums of money employing the best legal minds in the world to show how they can arrange their affairs so that they avoid paying tax. Perfectly legal practices that are quite blatantly unfair - unfair to those tax payers who, whether out of a sense of decency or simply because they can't afford the best legal minds in the world, pay their fair share of tax. I'm not referring to the grey areas - there are lots of them - situations that are open to interpretation and opinion. No, I'm referring to those cases where any reasonable person would agree that a course of action is clearly, without ambiguity, contrary to the spirit and intention of a set of rules, a contract or an agreement. The fact that there is no breach of rules does not make the situation fair - it simply makes it legal. Which is why I'm astonished at the response from Philip King recently on the OB10 blog to a question about prompt payment.

31 Oct

Posted at 05:27h in P2P Europe, Procurement Best Practices, Public Sector Procurement by
0 Likes
I have been reading the draft of the new Procurement Directive. I had previously dipped into it but have now read all 360-odd pages in sequence. There is a lot in the draft Directive of value, particularly about sustainability, but I found myself musing on the concept of “Abnormally Low Tenders”. The explanatory notes in the draft are quite clear what the concern is: “(44a) Tenders that appear abnormally low in relation to the works, supplies or services might be based on technically, economically or legally unsound assumptions or practices. Where the tenderer cannot provide a sufficient explanation, the contracting authority should be entitled to reject the tender. Rejection should be mandatory in cases where the contracting authority has established that the abnormally low price or costs proposed results from non-compliance with mandatory Union legislation or national law compatible with it in the fields of social, labour or environmental law or international labour law provisions”.