How to Automate

Sourcing Process and

Reduce lead time
PRESENTED BY
SRINI RAJA
DIRECTOR TPSYNERY!CO"
###!TPSYNERY!CO"
$%&'(&)')*+)
How to Automate Sourcing Process and
Reduce lead time
How to Automate Sourcing Process and
Reduce lead time
,ead time is de.ned as t/e time ta0en 1rom w/en a need
is 1elt to t/e time need is 1ul.lled!
In Procurement and Su22l3 C/ain4 t/is lead time consists
o1
Com2onents o1 ,ead Time
Pre'Processing ,ead Time 5PP,6 7' T/is lead time is
needed 1or sourcing4 negotiation and order release
Processing ,ead Time 5P,6 7' Time ta0en 83 t/e Su22lier
to manu1acture or 2rocess t/e material and get it read3
1or s/i22ing
Post Processing ,ead Time 5P,67 T/is is t/e time
consumed during s/i22ing4 recei9ing 4 :ualit3 ins2ection
etc!
Com2onents o1 ,ead Time
#/ile & and ; a8o9e are outside t/e Organi<ation=s
immediate control4 time ta0en 1or t/e item %4 t/at is t/e
Pre'2rocessing lead time can 8e reduced 83 automating
t/e 2rocess!
Procurement Process
,et us see4 w/at t32icall3 /a22ens in an Organi<ation
during t/e 2rocurement 2rocess!
Need 1or t/e material is con9erted to Planned 2urc/ase or
Re:uisitions! T/ese re:uisitions are routed to t/e Bu3ers
5Purc/asing Agents6 1or con9erting to Purc/ase orders
and sent to Su22liers 1or Deli9er3!
Procurement Process
Once t/e Bu3ers get t/e re:uisition4 t/e3 start t/e 2rocess
called Sourcing!
In t/is 2/ase4 t/e3 identi13 t/e 2otential su22liers4 matc/
t/e re:uirements to t/e su22l3 and negotiate t/e terms
and conditions!
T/is sourcing 2rocess can 8e once in a 2eriod 5Yearl3 or
>uarterl36 or on a regular 8asis!
Procurement Process
Raw "aterials and Com2onents t/at are needed regularl3 are
negotiated in Bul0 and a Rate contract is entered into!
T/is also called Blan0ed Purc/ase Agreement 5BPA6 or
Sc/eduling Agreement 5SA6!
Once t/e Rate contract is in 2lace4 as and w/en Re:uisitions
arise4 t/ere is sim2l3 a release to t/e Agreement 1or t/e :uantit3
needed!
"ost o1 t/e ERP S3stems li0e Oracle and SAP /andle t/is well
and t/is 2rocess can 8e automated!
Frequent Sourcing
?or material 1or w/ic/ 2rice and deli9er3 @uctuate4 Bu3ers need
to re2eated sourcing wor0 and t/is consumes lot o1 time!
?or eAam2le as t/e 2rice and a9aila8ilit3 o1 Steel 9aries da3 83
da34 Bu3ers need to get t/e current :uote and deli9er3 time
e9er3 time t/e3 /a9e a need to 8u3!
T/is creates re2etiti9e wor0 li0e sending email to a list o1
su22liers as0ing t/em 1or t/e current 2rice and deli9er34
com2aring t/e 2rices and t/en releasing t/e 2urc/ase order 1or
t/at 8atc/ o1 re:uirement!
Automating Frequent Sourcing
T/is 2rocess o1 1re:uent sourcing can 8e automated to get
good 8ene.t!
Once t/e su22liers are identi.ed and 9alidated as
2re1erred su22liers4 e9er3 time t/e re:uisitions are
created4 su22liers are to 8e sent t/e R?> 5Re:uest 1or
>uotation6 automaticall3!
Su22lier=s res2onses as >uotations are recei9ed
automaticall34 sorted 83 2re'de.ned criteria li0e Price or
Deli9er3!
Automating Frequent Sourcing
Bu3er need to Bust re9iew t/e :uotations and award t/e
2urc/ase order as 2er t/eir selection criteria!
T/is Automation 2rocess can greatl3 reduce t/e time
ta0en 1or sourcing and im2ro9ing t/e o9erall ,ead time
and /ence increase t/e su22l3 c/ain eCicienc3!
Tools For Automated Sourcing
It is necessar3 to use a Su22l3 c/ain colla8oration tool li0e
TPS3nerg35www!t2s3nerg3!com6 t/at can 2ro9ide t/e
1unctionalit3 li0e con9erting re:uisitions to R?>4 sending
R?> to Su22liers4 a8ilit3 o1 t/e su22liers to 9iew and
res2ond to R?> online and su8mit t/eir :uotations!
Dsing suc/ s3stem tool greatl3 en/ances t/e Su22l3 c/ain
eCicienc3 and a9oids situations li0e Stoc0 Outs!
Presented B3
SRINI RAJA
DIRECTOR
TPSYNERY!CO"
5www!t2s3nerg3!com6
$%&'(&)')*+)