Pharmaceutical Technologist - March 2008 - (Page 13)

E-procurement processes and incorporate direct sourcing, or to implement a current mature procurement environment where the overhead costs are significantly lower. The lean procurement machine Establishing an e-procurement procedure that covers the entire source-to-payment process for a buying organization requires detailed analysis and process mapping. End-users’ acceptance or nonacceptance of the process is a key element that causes people with purchasing responsibilities to not comply with an organization’s approved purchasing channels. Implementing e-procurement is an ideal opportunity to apply process improvement methodologies such as lean to the procurement process. Gathering stakeholders and creating a ‘value stream map’, which analyses the flow of information, approvals and decisions in the purchasing process, will often reveal that much of a process comprises ‘non-value adding time’, where no progress is being made in the purchasing process (Figure 1). The value stream map analyses the flow of information and decisions required to complete the purchasing process. Lean tools can help identify and eliminate such waste, and can vastly improve the efficiency of procurement. Applying lean reduces the percentage of waste and waiting time for the next step, and uses the e-procurement system to manage this ‘leaned’ process. Somewhere in this process, the suppliers must be involved as they provide the sourcing data and close the procurement cycle when submitting invoices and receiving payment. Implementing an alternative procedure for vendors that cannot comply with the new, lean process should be avoided as it increases waste because additional processes must be managed. partnerships can significantly increase the adoption of e-procurement by both suppliers and customers. Other suppliers understand that this model protects information, such as pricing, and have responded positively to participation in procurement initiatives sponsored by competitors, reducing their overheads and lowering their costs. E-procurement evolution Larger vendor companies have seen the implementation of many procurement solutions, and have extensive knowledge of current developments including the future direction of e-procurement. However, few have taken the next step, which is to become partners in the process rather than suppliers. The natural next step to become partners is to provide a website where customers can shop for their products and place orders with all their suppliers electronically. This can include flexible workflows for invoice reconciliation, inventory management, spend reports and integration into customers’ financial systems at nominal cost. Vendors can significantly lower their customers’ thresholds for adopting e-procurement by providing these services. By offering solutions through an experienced e-procurement third party, vendors can ensure consistent development of the solution and secure handling of competitive information such as customer-specific pricing. Such The natural next step is to provide a website where customers not only shop for their products, but can place orders with all their suppliers electronically. Smaller suppliers can also participate. By providing relevant data, they can manage their catalogue and pricing on such a system at no cost, which removes the need for purchasing organizations to have an alternative procurement channel. Will they use it? One of the main challenges with any new process is user-adoption. Ease of use, complete product data — including pricing, availability and full supplier selection — encourages adoption. Users of a procurement system will be comfortable when they realize they can use the system as if they were web shopping at home. With such a familiar type of interface, little training is required for the largest pool of users of the system — the people making everyday purchasing decisions. User-adoption is greatest when the user has the option to choose products from a range of suppliers. When a user searches across all specified vendors, it is crucial they Figure 1 Lean methodology removes wasted time and effort from a process, ensuring that value-adding steps occur as soon after one another as possible. Before lean After lean Time Value added Non value added Lean procurement Lean procurement is the systemic, streamlined purchasing of goods using fewer resources, people and time compared to the traditional procurement processes. It has its origins in lean manufacturing methodologies developed by, among others, Toyota. www.ptemagazine.com 13 http://www.ptemagazine.com

Table of Contents Feed for the Digital Edition of Pharmaceutical Technologist - March 2008

Pharmaceutical Technologist - March 2008 Contents News Morpheus Market Watch E-procurement Means Lean Procurement The Rational Enquirer Simulating for Success Q&A

Pharmaceutical Technologist - March 2008

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