A major tobacco manufacturer in India

BUSINESS REQUIREMENT

This company is one of the leading cigarette manufacturers in India and sought a review of the Procure to Pay process across all their manufacturing units. The objectives were to evaluate their ERP system in the context of Procure to Pay and review their Standard Operating Procedures (SOPs) in the same regard. The ultimate goal was to identify any deviations from standard practices and provide recommendations for improvement.

IDENTIFIED PROCESS CHALLENGES

1. Gaining a comprehensive understanding of the various phases within the Procurement lifecycle.

2. Addressing discrepancies in rates for the same materials or services among different vendors.

3. Resolving issues stemming from inaccurate data in master records, which resulted in duplicate payments.

4. Tackling the lack of documentation within the process.

5. Optimizing the utilization of ERP functionalities to enhance efficiency.

APPROACH AND SOLUTION DESIGN

To address these challenges, we adopted the following approach and solutions

1. Employed a bottom-up approach to comprehensively understand the Procurement lifecycle, involving various user profiles. This enabled us to model the entire flow of the procurement process.

2. Conducted a detailed analysis of rate card variances for identical materials or services offered by different vendors. This analysis served as the foundation for cost optimization measures.

3. Made key data fields mandatory during the creation and updating of master records and recommended validations for each field.

4. Proposed a digital archival system to maintain a transactional flow-wise documentation trail.

5. Mapped ERP functionalities to specific business processes and identified underutilized features for future enhancement.

BUSINESS BENEFIT AND RESULT

Our efforts yielded the following benefits

1. Delivered comprehensive risk registers and mitigation strategies specific to the Procure to Pay process.

2. Identified inaccuracies within the master data and oversaw the cleanup and improvement of master records.

3. Implemented an effective purchase plan, resulting in reduced purchase and transportation costs.

4. Automated the Delegation of Authority Matrix within the ERP system, enhancing procurement monitoring.

5. Designed a comprehensive Procurement Management Information System (MIS) to support the organization in making informed decisions.