Overview of the implementation process for an e-Procurement solution

12 October 2016 Consultancy.uk

Ramon Abbenhuis and Willem Blom, consultants at Supply Value, provide an overview of the steps required for implementing an e-Procurement solution, from the initiation of the e-Procurement project to acquisition, realisation, implementation and after care/evaluation.

To start off with an e-Procurement project a business case should be developed with details regarding company strategy, the use of the e-Procurement system, available resources and timeline. Secondly it is advised to work project based by a project management methodology such as PRINCE2 Project management. In the Project initiation phase, a Project Initiation Document (PID) is composed. This document can be used to create boundaries to the project by describing the scope, goals, results, dependencies and assumptions.  Furthermore, the PID contains an extensive planning, risk assessment, governance and stakeholder overview (RACI). 

The last part of the initiation project is to get approval for the business case and Project Initiation Document to obtain the available resources (time, money, manpower) and start the work on the e-Procurement project.

e-Procurement implementation process

After the project initiation it is time to start with the acquisition of the e-Procurement application. Firstly, it is important to gain insight into the purchasing strategy. Project managers need to know where their company is now and where they wish to go.  Also it is important to know the amount of transactions, the size of these transactions and the type of these transactions before choosing a system.

If all of this is known, a specification should be made regarding the problem statement, the goals and the boundaries set for the project. These three specifications can be used as a guide for choosing the right system. Supply Value advices their clients to apply Best Value Procurement (BVP)  as procurement methodology and process for acquiring the e-Procurement system since there are a lot of experts on the market and e-procurement is probably not the firm’s core business. 

Using the IT Value Sourcing framework , the functions of the e-Procurement system are not technically specified in detail, but are specified functionally in terms of goals that the e-Procurement system should satisfy. On the other hand, interfaces and security requirements are specified in detail. The problem statement, goals, specification and procurement process is described in a tender document which is distributed to e-Procurement suppliers (on the long-list). Supply Value has tender document – and presentation templates available which saves much time in this phase.

Subsequently an information session for suppliers is organised were the procurement process and needs of the organisation are presented to interested e-Procurement suppliers. Suppliers can answer questions which are answered during the sessions or later on paper. 

Based on the tender document and Q&A session, e-Procurement suppliers write and submit their tenders with. In the Best Value Procurement process this contains of performance, risk file and, value adding options (added with references in the private sector). The documents are graded by the project team and the suppliers, with the best tenders invited for a demonstration of their e-Procurement system and interview of key-employees in executing the project when the contract is awarded to this supplier.

First phases of an e-Procurement implementation process

Finally, the number one supplier is invited to write a detailed project plan for implementing their e-Procurement tool, risk assessment and final presentation. When this is all satisfies the project team, the contract for supply the e-Procurement software is signed with the number one supplier. It is important to keep in mind to make Service Level Agreements and re-transition plans before the realisation phase.

The realisation of the e-Procurement system by the suppliers contains of three phases. Firstly, a detailed design is formed by the e-Procurement suppliers with input of internal experts:

  • Process: what is the procurement process of the organisation? Does this fully fit into the e-Procurement tool or are (minor) adjustments need to be made for an efficient and effective process?
  • System: What steps are done in each IT-system in the network. How are the various IT systems (such as financial) integrated with each other?
  • IT management: how is the e-Procurement system managed? Which tooling do they use?
  • Security: which security measures should be taken to secure the application?
  • Transition: what is the transition strategy when the contract with this e-Procurement supplier has ended at the end of the life-cycle or prematurely?

The second part in the realisation of the e-Procurement software, is the configuration of the tool. In this phase the e-Procurement tool is set up by the e-Procurement supplier based on the parameters formed in the previous phase: Realisation – detailed design. At the end of this stage the e-Procurement supplier delivers the e-Procurement system and interfaces with other systems, such as the financial system in cooperation with the IT department and suppliers of the integrated systems, such as the financial system. More over management processes, organisation and tools are delivered.

The third part in the realisation of the e-Procurement tool is testing the delivered e-Procurement tool. This consists of:

  • Unit testing: Testing each part of the e-Procurement system separately to check for errors.
  • System integration testing: After testing each separate part, the complete system should be tested while working together. If there are no errors, to the acceptance test can be started.
  • Acceptance testing: Are the requirements and previously set specifications correct. Is everything working properly and can the users work with the system. There are multiple types of acceptance tests such as:
    • Functional acceptance test
    • Performance acceptance test
    • Security acceptance test
    • User acceptance test

Latest phases of an e-Procurement implementation process

In the implementation phase the e-Procurement system that is delivered in the realisation phases is implemented into the organisation and its processes. An important part of the implementation phase is to inform everyone about the newly implemented system. Not only the employees of the company need to be informed about the system but also all other stakeholders such as suppliers and partners.

Secondly it is important to train the people who are going to use the system. Without properly training end users with the new system, the ROI of an e-Procurement system will be much lower than with a properly trainer team. Besides just training the e-Procurement users it is also important to create adequate support documents for processes in the e-Procurement system. Because every company uses different processes and rules it is important to create easy to understand documents. 

Finally, it is time to implement. As most companies already have some sort of data management system, or perhaps an older e-Procurement system, it is now time to convert the data to the new system. After everything is implemented it is time to end the implementation phase and to create the planning for the aftercare phase.

The final phase of an e-Procurement implementation project is the evaluation of the project. For now, an e-Procurement system is implemented and probably will be used for several years, but this, or other, systems may be replaced in a few years. It is therefore important to evaluate the project and to describe the lessons that were learned along with the success and fail factors. After the evaluation is done, it is finally time to finish the project and to formally stop the project.

Related: Insights and lessons learned from an E-Procurement implementation.

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Maine Pointe: How 3D printing will impact the global supply chain

21 March 2019 Consultancy.uk

3D printing is touted as one of the most disruptive developments in manufacturing and beyond. UK-based Simon Knowles, Chief Marketing Officer at Maine Pointe, reflects on the impact the innovative technology can have on supply chain management. He outlines potential benefits of the technology and five ways it will impact the supply chain. 

Also known as additive manufacturing, 3D printing is a process which uses a three-dimensional digital model to create a physical object by adding many thin layers of material in succession, subsequently lowering cost by cutting out waste. This is radically different from current, subtractive production methods where up to 90% of the original block of material can be wasted. Although we tend to think of it as a new technology, the first 3D printer was introduced nearly 30 years ago. 

So far, issues such as durability, speed and protection of intellectual property rights have prevented 3D printing from entering mainstream manufacturing. However, the industry is making rapid advancements and it’s only a matter of time before we see it significantly impacting global supply chains and operations. According to the Global Supply Chain Institute (GSCI), "some supply chain professionals predict 3D printing will eventually rival the impact of Henry Ford’s assembly line.” This technology has the power to help companies significantly reduce costs, overcome geopolitical risks / tariffs, improve customer service, reduce their carbon footprint and drive innovation for competitive advantage.

How 3D printing will impact the global supply chain

Impacting the supply chain

Five ways 3D printing will have a massive impact on the supply chain and drive competitive advantage:

1. Decentralise production – The ‘portable’ nature of the technology will enable businesses to take production to local markets or customers faster. As a result, we will see a shift away from mass production in low-cost countries in favour of more local assembly hubs. Companies will have the capability to produce components closer to home rather than rely on imports. This is especially important during times of geopolitical tension, for example during a trade war, when the cost of purchasing components globally can increase rapidly.

2. Drive product customisation – As a tool-less process, 3D printing technology gives manufacturers unprecedented freedom to tailor offerings to clients’ specific requirements and enhance the customer experience. This will result in more agile supply chains which can rapidly adapt to changes in the market. Eventually, we could see design, production and distribution merge into one supply chain function with greater client involvement in the entire design and production process.

3. Reduce complexity and improve time-to-market – 3D printing technology consolidates the number of components and processes required for manufacturing. This will have a significant impact on global supply chains, decreasing complexities, saving on production costs, enhancing lead times and improving time-to-market.

4. Improve resource efficiency – 3D printing is a ‘greener,’ more energy-efficient and cost-efficient production method. It creates almost zero waste, lowers the risk of overproduction and excess inventory and reduces the carbon footprint. It takes ‘Just-in-Time’ manufacturing to a new level.

5. Rationalise inventory and logistics – As ‘on demand’ production becomes the norm, the need to transport physical goods across countries and continents will reduce. Combined with the lower number of SKUs required for production, this will have a major impact on warehousing and logistics and will have the potential to overcome tariffs. 

Tomorrow's technology, today

While 3D printing technology may sound like science fiction, it is actually science fact and it’s making its presence felt right now. Here are a few more real-world applications already a reality or just around the corner: 

Aerospace – It may surprise you to learn some non-critical 3D printed parts are already in use on aircraft. GE already have more than 300 3D printers and GE Aviation wants to produce 100,000 additive parts by 2020. The US Air Force has installed seventeen 3D printed parts on the C5 Super Galaxy, which could save tens of thousands of dollars. Other high-profile users of the technology include Airbus / EADS, Rolls-Royce and BAE Systems. Airbus is already talking about constructing entire airplanes with large scale 3D printers.

US Air Force has installed 17 3D printed parts on the C5 Super GalaxyMedical – The technology is already being applied to manufacture stock items, such as hip and knee implants, and bespoke patient-specific products, such as hearing aids, orthotic insoles for shoes, personalised prosthetics. Success stories include Open Bionics, a UK-based producer of 3D prosthetic arms which, in February 2019, secured a £4.6 million investment to take its business to the international market.

Automotive – Many automotive companies are already making use of 3D printing to help with prototyping. Ford has been using 3D printing technology since the 1980s. According to Ford's website, traditional methods would take four months and $500,000, but with 3D printing, the same process takes four days and $3,000. Future possibilities are almost limitless. In January 2019, 3D printer company BigRep unveiled the first 3D printed motorbike. The bike, which is not available on the market, took three days to print and cost just £2,000.

Construction – Although the technology is still in its infancy, significant advances have been made with the use of 3D printers in the construction industry as construction giants begin to see the potential of the technology. 3D concrete printing is developing rapidly, and the market is expected to reach $56.4M by 2021. More and more companies are starting up in the sector to create new, innovative projects. For example, Russian 3D printing manufacturer, Apis Cor printed an entire house in just 24 hours.§ 

Chemicals – There is an incredible opportunity for the chemical industry to innovate and drive new revenue streams using 3D printing technology. The industry could find itself at the heart of the manufacturing process as it works closely with 3D printer manufacturers to develop new materials specifically designed for additive manufacturing. Major chemical companies are already working directly with 3D printer manufacturers to invent new resins, polymers and powdered metals to take manufacturing into a new era. Chemical giant BASF is one of the companies leading the way with a dedicated 3D printing division and partnerships with a string of hardware OEMs, software vendors, and materials specialists.

Food – We could be seeing 3D printed food in restaurants or in our kitchen in the near future. Initiatives that mix 3D technologies and food are more and more numerous; this new manufacturing method would make it possible to create and mass produce food with more complex and original shapes and innovative recipes. It would also offer personalised meals to better adapt to the diversity of diets. Hershey's has already entered into partnership with 3D Systems to make a 3D printer for chocolate and other edible products though there is no word when the chocolate-making machine may be available.

Oil & Gas – Although adoption of additive manufacturing technology in the oil & gas industry is behind other industries, the technology has enormous potential in this industry. For example, 3D printing could allow organisations to access a bank of digital designs for on-site printing in the field. This will have a major impact on the speed and efficiency of equipment repairs and maintenance, reducing the necessity to either maintain physical inventories of spare parts on site or wait for them to be manufactured and transported to a facility. 

The market for additive manufacturing is predicted to reach $11,223 billion in 2019 and $41,587 billion by 2027. It’s an opportunity executives can’t afford to overlook.