The saying goes: “What is good and fast isn’t cheap. What is fast and cheap isn’t good. What is good and cheap isn’t fast. You can only have two.” We’ve all just accepted this message to be truth, and the Project Management Triangle – the feeling of pressure that comes with managing opposing forces of quality, speed, and cost against each other – is a part of business. This pressure is particularly felt in the retail industry, where consumers have voiced increasing demands for all three. What if that were possible?
The logistics of managing a product from production to delivery is so complicated that retailers must often sacrifice one of the three. They can spend money to hire extra help, spend time getting it done themselves, or simplify the process while risking the quality of their products. With modern technology and purchase to pay (P2P) systems, though, retailers no longer have to sacrifice quality for speed.
It can be fast
Using P2P systems, retailers have insight into every aspect of the supply chain from start to finish, and they can communicate more efficiently with their suppliers. Automation speeds processes by handling the mundane logistics of creating orders, shipping documents, packing lists, carton labels and commercial invoices. The benefits of automation extend beyond the buyer and supplier relationship into financial institutions as commercial invoices can be processed and set up for payment through automatic messaging. Everything from generating shipping documents and sharing information with freight forwarders and carriers to customs compliance management can be run through automated P2P systems, simplifying retailers’ communications with financial institutions and other involved parties.
Insight into the five-way match – purchase order (ordered), bill of lading (shipped), commercial invoice (invoiced), entry details (customs cleared) and receipts (received at the warehouse or store) – allows retailers to speed the process and mitigate risk. Orders can even be pre-approved if they are within the designated tolerance parameters, reducing the potential for future errors. With visibility into commercial invoices and supplier packing lists days earlier, retailers can review and approve what, how much and how their order is being packed at the factory to ensure it’s exactly what they want before it is shipped.
You don’t have to sacrifice one for the other
Earlier visibility into the process also allows retailers more flexibility should they need react to changes. The increased communication between buyer and supplier makes it possible for each team to communicate its needs and to make sure the end product is exactly what the consumer will want, without spending days or weeks debating changes or wasting money on inaccurate orders. The benefits extend to everyone:
– For suppliers, P2P systems mean that all commercial invoices are checked and ensured to be within tolerance before they are set up for payment. This visibility over time – including insights into shipping accuracy, consistency and compliance – allows suppliers to build trust with financial institutions, which in turn speeds the entire payment process and bolsters suppliers’ relationships with retailers.
– Retail buyers can group commercial invoices for automatic sharing with financial institutions to speed their end of the payment processing. Increased visibility and automation ensure retailers only have to check items that fall into exceptions, and as long as everything is within tolerance, they will have insight into more accurate shipments six to eight weeks earlier.
– Financial institutions will have increased visibility, which allows them to trust the credit of buyers and performance of suppliers. These insights can be used to ensure all transactions are compliant, which smooths overall processing and shipment management.
A fully integrated P2P system will work with all the necessary industry players, including ERP for financial ledgers, freight forwarders for shipping, customs brokers for brokerage elements and financial institutions for payment processing. Retailers who implement P2P systems will find it doesn’t need to be a matter of sacrificing one element for the other. Instead, retailers can better manage speed, quality and cost in the long run when they leverage integrated P2P systems throughout the product development process.
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