Manufacturing companies that operate their Procure-to-Pay (P2P) processes so that Supplier Relationships are collaborative, data-driven, strategic alliances improve client quote generation. They are lean, strong, agile supplier relationships that aren’t siloed to strict, expensive parameters. They develop with trust and time through trans-formative iterations that eliminate unnecessary processes so your quotes aren’t ambiguous and give you a proper apples to apples comparison.
These iterations, coupled with highly-configurable digital technology, ensure that manufacturers can clearly define the Scope of Work (SOW) at the onset of the P2P process, yet change as needed whether the deliverable’s are raw material, custom components or domestic warehoused parts.
The Scope of Work for Custom Deliverables
The scope of work is what a job entails technically, logistically, timing and cost. This is especially important if you are a manufacturer and you need a particular component quote within a specific time frame. It helps to include a print (production drawing) so that your supplier can quote the component.
“Pricing a manufactured part can become quite complex. Aside from labor, overhead and the cost of capital equipment, the main factors that affect price are: tool usage, fixture design and the time it will take to develop programs for the CNC machines.”
Sullivan Machine Works, Canada
This is especially true if you are a small manufacturer creating proprietary parts using raw materials extracted from such commodities as tungsten. Such manufacturers must rely on international suppliers when raw commodities cannot be fulfilled by a domestic supplier. Quotes for these kinds of commodities can be tricky. Often currency fluctuations, transportation and other logistical issues, as well as import/export tariffs, affect raw materials, which in turn, affect custom component quotes.
For instance, if the price for a monthly supplied raw material that must be mined in a certain region in China increased 38 percent within the last month, does this mean that your price will also increase 38 percent? To ascertain that your supplier is giving you a fair quote, you must make sure that both your historical and current data integrity is of the highest quality.
“Quality of data (51 percent) is seen in this industry (manufacturing) as the biggest barrier to the implementation of digital technologies.”
Deloitte Global Chief Procurement Officer Survey 2018
What about domestic warehoused components like plastic for injection molding parts? It follows the same principle. Your supplier data must be impeccable and readily available. You can’t have a supplier on the phone while sifting through mounds of manual files to find the historical figures that support your reasons to question a quote.
The domestic and international business world moves information around at lightning speed whether you are an SMB or an enterprise-level company. Your value stream of data should not be undervalued or subject to barriers like non-strategic, informational workflows that do nothing to improve client quote generation.
Maybe you should be asking your P2P team: “Is your data working for you or are you working for your data?” If the answer is the latter, then there is no real collaboration or synthesis between your P2P process and your suppliers.
Integration, Collaboration, and Spot-on Quotes
You want to be able to track historical and current supplier data so that you have quantitative and qualitative insights to supplier quotes. It’s time to reduce or eliminate the technological barriers that inhibit data-driven, strategic alliances.
iQuote, along with iApprove, iPurchase, iManagePOs and iVoucher is one of the core solutions in our agile BPI Supplier Relationship Improvement portfolio; SRI iBundle. Each solution is seamlessly integrated with QAD EA, and most leading ERP solutions for real-time actionable data with multi-device functionality.
These highly configurable, web-based, on-premise or in-the-cloud BPI solutions reduce or eliminate unnecessary processes, bringing manufacturers and suppliers collaborative, lean, agile quotes that take your scope of work to the next iteration in the framework that works best for your particular P2P. Contact us when you’re ready to overcome the barriers that keep your company from improved, global, collaborative client quote generation.