Using B2B Integration for Corporate Purchasing
Large companies in the aerospace, automotive, high tech and industrial manufacturing sector purchase trillions of dollars of goods every year. Most of the purchases consist of raw materials, component parts or finished goods which they take into their manufacturing plants to create products. It would not be uncommon for a $5 billion manufacturing company to issue several hundred thousand purchase orders during a single calendar year.
There is a tremendous amount of overhead associated with managing each of these orders throughout its lifecycle as they are acknowledged, changed, acknowledged again, received, invoiced and paid For example, purchasing managers often lack visibility into whether an order has been acknowledged by a supplier. As a result, buyers have to phone the supplier to assess whether or not they can ship the quantity of goods requested to the specified location on the desired date.
Other challenges are created when purchase orders are faxed, emailed or phoned to suppliers. The sales team at the supplier often must take liberties with interpreting illegible data, filling in missing fields or substituting line items that are out of stock. These “value added” activities during the order entry process contribute to lower fulfillment quality.
With B2B integration technologies such as EDI or XML, many of these administrative challenges go away. The electronic PO is sent electronically into the supplier’s fulfillment applications for immediate processing. An electronic PO acknowledgement can be returned to the buyer indicating the supplier’s ability to fulfill the order in part or in whole according to the specified terms.Pages: 1 2 3 4 5 6