Long gone are the days when everything inside a company was solved only with blocks of notes and some phone calls. The need for agility in the processes and viability of a business through cost reduction demands that new practices, processes and increasingly effective methods appear from time to time. In the branch of companies that work with the commercialization of products, P2P promises to revolutionize logistics practices in order to make processes more efficient and more economical. And it is about this practice that our post today will be. Check it out!!
New concepts demand more effective solutions
Supply Chain Management, which roughly means the alignment and integration of logistics processes, even being from the manufacturing sector, suppliers, retailers or wholesalers, is a term that has gained a lot of strength in recent times, since the ideal framework for enterprises is that everyone in the supply chain gets benefits in some way.
This concept arises with the purpose of optimizing the way to control issues such as order point, resupply time and safety stock, which brings advantages in a universal way. Great. But there was still something to be done for integration solutions involving sales, inventory, production, and purchasing controls, which needed to provide a perfect synchronization between supply and demand.
P2P: the solution that was missing
In English, P2P is an acronym for Procure to Pay or Purchase to Pay, and these three characters conceptualize the process necessary to obtain raw materials that the offering or the service production need.
The implementation of P2P implies to establish the systemic control of the whole flow of materials from its initial processes, when the requests are made at the exact point, the forwarding to the supplier of the requests, the sending of the requests, the ratification of the receipts , payments, transportation, reception, verification of the raw materials for conference and packing in the company’s stocks.
Benefits of P2P implementation in inventory control of an enterprise
. It reduces the losses and waste of materials, considering that only what is needed is requested.
. The costs which are necessary to maintain the stock decrease due to the absence of the need to allocate non-usable materials for a long period of time,
. Materials are damaged and deteriorated on a lower level, which also reduces costs, depending on the processes of ordering, receiving, and using them to be much more precise;
. For obvious reasons, productivity increases and, as a result, revenue is positively impacted, considering the cost reduction.
But how is the implementation of P2P made?
Information Technology, of course. There are so many variables to be conjugated, that only with the high capacity of modern software to process information can P2P be implemented in a functional way in order to improve the operation of inventory management in a business.
As there will be an integration of systems between supplier and customer, it is of the utmost importance that when deciding to move forward to a P2P process, choose a partner that can talk to both systems, exchange inventory data, forecast, orders, notices of dispatch, delivery confirmation, consigned consumption, among others.
Currently, P2P processes, whenever possible, have been working together with VMI (Vendor Managed Inventory) and VMOI (Vendor Managed and Owned Inventory) processes to eliminate all manual tasks from the resupply process.
It is clear that deploying a P2P process or VMI / VMOI management system in a company is a complex process of meetings between managers and IT staff. That is why ORBIT Logisitcs and the VMI Portal invite you to contact us to discuss your doubts.
ORBIT Logistics is one of the world’s leading suppliers of inventory management solutions (VMI – Vendor Managed Inventory and SCM) and real-time data acquisition.
Our company, founded in 2003, provides a modular system for supply chain management and automation, serving global customers from offices in Leverkusen (Germany), Atlanta (USA), Sao Paulo (Brazil) and Shanghai (China). A highly qualified team of more than 40 engineers and technicians offers customized turnkey solutions for process management and monitoring.
For more information:
Phone: (55 11) 3796-1755 / 1756
Cellphone.: (55 11) 96420-1701