Many buyers still use spreadsheets to manage their procurement systems © Photo by Image Source via GettyImages
Many buyers still use spreadsheets to manage their procurement systems © Photo by Image Source via GettyImages

Ditch outdated communication systems, procurement professionals told

20 March 2023

Point-to-point communication between buyers and suppliers is too complex, too slow, and procurement should move to a networked communication system for all data sources.

This was the stark message delivered to delegates at last week’s Digitally Transforming Supply CIPS Briefing in a speech by Richard Jowers, head of value advisory for SAP’s Intelligent Spend & Business Network.

According to Jowers, buyers are limited by using outdated communication systems. He revealed research by Oxford Economics which showed around 70% of procurement teams were still using phone, email or spreadsheets as their primary method of communication with trading partners.

Jowers said: “Many businesses still rely on point-to-point connections, in the form of electronic data interchange (EDI), which always comes up with different portals and different solutions.

“These take a lot of time, and they’re quite complex. A lot of paper gets used, which is quite surprising.”

Instead, delegates were urged to move to communications networks which integrate data sources from across the supply chain. According to Jowers, this way of working “is really helping to unlock innovation between organisations and their supply chains”.

In comparison, he explained that traditional point-to-point communication systems restrict visibility in supply chain networks, and criticised them for being siloed and using data that doesn’t easily 'talk' to other organisations. The result, he argued, was that processes slow down, limiting the ability of buyers to quickly and effectively manage risks.

He added: “If your supply chain has these sorts of issues, it makes it difficult to find new suppliers who could help you recover from disruption. It also makes it harder to react to supply chain difficulties as quickly as you would like to.”

Jowers discussed the importance of moving to a “business network” model which connects the procurement function directly to trading partners.

SAP’s VP global CoE, sustainable supply chain and operations, John McNiff, said: “What we’re really trying to do is synchronise business processes as much as possible. The network concept is getting bigger and bigger.”

He added: “You’ve got to share information with your trading partners about particular assets; you’ve got to deal with partners on the logistics side of things; and you’ve got to manage freight and trade contracting.”

By integrating data from logistics providers with production sources, McNiff said networks would enable buyers to optimise their operations to become more efficient and less prone to risk.

He said: “There’s a wealth of information that sits out there, in networks, about everything from logistics to manufacturing. Our mission is to break down the silos so procurement professionals can manage their end-to-end supply chain in the best possible way.”

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