Etiket arşivi: eSourcing Software Solution

Northvolt becomes 3rd battery cell supplier to BMW

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The BMW Group has signed a long-term supply contract for battery cells with the Swedish company Northvolt. The deal is worth two billion euros. Northvolt will start manufacturing the cells in 2024 in its Gigafactory in Skellefteå, currently under construction.

The Swedish company is already the third supplier to the Munich company after CATL and Samsung SDI. For BMW, the multi-supplier strategy is to establish global competition within the Group’s network, according to press information. Andreas Wendt, member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network, explains this way, they ensure “we always have access to the best possible cell technology”.

BMW said nothing about the term of the contract with Northvolt, which also supplies Volkswagen. The Nortvolt-Volkswagen deal sees them building a cell factory in Salzgitter at the moment. BMW, however, only assembles the batteries for its electric vehicles at its facilities in Germany, China, the US and Thailand, but buys the cells from said partners.

source: www.electrive.com

How Procurement Can Help Reduce Supply Chain Risk

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The modern supply chain is facing some unprecedented challenges right now, and procurement is in a prime position to be able to help solve some of these issues while also reducing overall supply chain risk for their organizations. In “Risk, resilience, and rebalancing in global value chains,” McKinsey Global Institute covers a lot of ground on the supply chain risk front, but also singles out a few key realities that companies are facing and the steps they can take to mitigate risk.

After analyzing 23 different industry value chains to assess their exposure to specific types of shocks, the research firm found that supply chain “shock” varies according to industry. Aerospace and semiconductors, for example, are susceptible to cyberattacks and trade disputes, because of their high level of digitization, R&D, capital intensity and exposure to digital data flows.

Some of the key procurement-related findings in McKinsey’s report include:

  • Shocks inevitably seem to exploit the weak spots within broader value chains and specific companies. “An organization’s supply chain operations can be a source of vulnerability or resilience,” it points out, “depending on its effectiveness in monitoring risk, implementing mitigation strategies, and establishing business continuity plans.”
  • Some of these vulnerabilities are inherent to a given industry; the perishability of food and agricultural products, for example, means that the associated value chains are highly vulnerable to delivery delays and spoilage.
  • Industries with unpredictable, seasonal and cyclical demand also face particular challenges. Makers of electronics must adapt to relatively short product lifecycles, and they cannot afford to miss spikes in consumer spending during limited holiday windows.
  • Other vulnerabilities are the consequence of intentional decisions, such as how much inventory a company chooses to carry, the complexity of its product portfolio, the number of unique SKUs in its supply chain, and the amount of debt or insurance it carries. Changing these decisions can reduce—or increase—vulnerability to shocks.
  • Companies’ supplier networks vary in ways that can shape their vulnerability. For example, spending concentrated among just a few suppliers may make it easier to manage them, but it also heightens vulnerability should anything happen to them.

Complexity isn’t a Weakness

Buyers should also understand that supply chain vulnerabilities often stem from the structure of supplier networks in a given value chain. “Complexity itself is not necessarily a weakness to the extent that it provides companies with redundancies and flexibility,” McKinsey points out, “But sometimes the balance can tip. Complex networks may become opaque, obscuring vulnerabilities and interdependencies.”

For example, a large, multinational company may procure goods from hundreds of different tier-one suppliers. Each of those tier-one suppliers in turn can rely on hundreds of tier-two suppliers. “The entire supplier ecosystem associated with a large company can encompass tens of thousands of companies around the world when the deepest tiers are included,” McKinsey points out.

Finally, the number of tiers of participating suppliers can hinder visibility and make it difficult to spot emergent risks. As a result, “suppliers that are dependent on a single customer can cause issues when demand shocks cascade through a value chain,” the firm notes.

Improving Resilience

On a positive note, McKinsey says that 93% of supply chain leaders are currently taking steps to make their supply chains more resilient. Some of the strategies they’re using include:

  • Building in redundancy across suppliers
  • Nearshoring their manufacturing operations
  • Reducing the number of unique parts that they use to build their products
  • Regionalizing their supply chains

“Most companies are still in the early stages of their efforts to connect the entire value chain with a seamless flow of data,” says McKinsey, which sees digital as a vehicle that can deliver “major benefits to efficiency and transparency that are yet to be fully realized.”

source: https://www.sourcetoday.com/

Budget for eSourcing Software Solution

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Budget management within an organisation can either make or break that company; without strict adherence to budget’s limits, as well as the strategic use of spending within those limits, an organization often loses money through overspending and missed investment opportunities. Inefficient budgeting often arises from a company’s failure to synchronize her budgeting efforts with their purchasing controls and this is due mainly to poor transparency between procurement spending and changing budget levels. Even when organizations use efficient procurement management strategies, these variations can cause major problems, both in back-office cost control and for the bottom line. Procurers therefore need smarter purchasing and this can be achieved through implementing an e-sourcing/contract management software and also by taking advantage of collaborative buying in order to promote an efficient and cost effective procurement system. This ensures increased control and visibility in her procurement processes.

The role of technology in the world of vendor/supplier sourcing, procurement and management is becoming increasingly indispensable. Recent advances in the world of electronic procurement and supplier management technology span many different industries. Any service or product; from paperclips to attorneys may now be sourced, procured and managed electronically.  How much of this client-supplier/vendor relationship has moved to electronic platforms however varies from industry to industry and also depends on the complexity of the services and/or products in question but in most cases, all products and a growing number of services are driven by e-sourcing software solutions. The manufacturing industry, for example, is highly engaged and to a greater extent has driven the development and sophistication of e-sourcing solutions. E-sourcing, simply put, is moving what was once a highly paper driven process onto an electronic platform.

Electronic procurement software is one of the most important tools for automating purchasing and financial processes. It facilitates electronic requisitioning, online vendor catalogs management, purchase order and receipt management, and integration with accounts payable. Its purpose is to mainly reduce the costs and time associated with manual processes, as well as to support more accurate product information and more competitive pricing. Leveraging clients’ buying power is also a prominent driving force in the utilization of procurement technologies these days, these tremendous opportunities lets you say goodbye to the traditional, labour intensive way of posting and advertising contract opportunities and RFQ’s.

Benefits of e-sourcing

Implementing an esourcing and contract management solution can bring a variety of benefits to any organisation, mainly improving procurement efficiency and reducing costs.
Esourcing significantly reduces the supply management costs by automating, simplifying and accelerating source to procure processes for goods and services. Esourcing solutions eventually increase bottom line cost savings by focusing on strengthening supplier relationships and streamlining tender processes.

Likewise, visibility into budget management is especially important for organizations with complex global operations. For example, a large corporation in the professional services industry may have dozens of smaller divisions running numerous client-funded projects, all of which are connected to the same central budget. In order for the company to run efficiently and competitively across different countries—with varying time zones and business requirements—procurement professionals and other business administrators must have complete visibility into where the company’s money is going and how successfully its budgets are being controlled.
Greater savings can also be made by public sector organisations collaborating in the procurement of goods and services. This enables the organisations to drive prices down by providing suppliers with greater quantities enabling them to reduce margins. Fortunately, today’s leading eProcurement budgeting tools are built to give organizations real-time control over how their money is spent, no matter how complex and widespread the spend allocation. Advanced eProcurement software can manage budgets in real time by fully integrating existing financial systems (such as the ERP) with requisitioning, catalogs, and Purchase order management—all in accordance with the organisation’s unique business structure and requirements. This not only allows administrators to drill down into minute budget details at a glance, it also enables them to measure and analyze the current use of their funds and strategically plan for future budget cycles.

Further Considerations

Implementing an esourcing and contract management solution can be relatively straightforward. Many solutions on the market offer a Software as a Service based solution which can be accessed from anywhere in the world with a web browser and internet connection. A hosted solution requires no additional in house IT infrastructure and reduces implementation times. These software solutions are readily available and are cost effective, even for small and medium-sized enterprises.

Managing a paper- based system is expensive, slow, hard to measure or audit, and harmful to the environment. In the e-sourcing world, the removal of paper from the billing process also helps organizations to meet their CSR commitments. Staff will also be quick to embrace tools that save time and expense; benefits offered by any e-sourcing software solution.