Streamlining the Manufacturing Procurement Process

by | Updated June 8, 2020 | Dynamics 365 Business Central, Dynamics 365 for Finance and Operations, Manufacturing

Streamline Manufacturing Procurement Process

Identifying suppliers with high-quality products readily available at the lowest possible price is the goal of every discrete manufacturing organization. However, few have the ability to streamline a complicated manufacturing procurement process to ensure the highest profit margin possible.

5-Step Manufacturing Procurement Process

There are five steps in the procure-to-pay process, each of which we’ll dive into to explain how technology and process modifications can help streamline each step.

1. Requisition order placed

During the planning process, you may require requisition orders to be placed and approved prior to vendor research and selection to occur. If so, it’s important to make this step as seamless as possible to ensure a timely turnaround and approval to get the workflow kicked off. With an integrated system like Dynamics 365, your users can quickly fill out required information such as part required, project information, date required, and more, and have that information immediately sent electronically to pre-set approvers. Those contacts can then approve, deny, or make changes to the request within the system and continue the procurement process.

2. Vendor selection

Through automated vendor selection within Dynamics 365, data from all approved vendors are automatically compiled within the system, giving your users key information to make better-informed purchasing decisions. By optimizing the way you interact and work with suppliers, you can better strategize orders to reduce cost, streamline processes, and increase value to your partnership.

Another facet of vendor management is an integrated portal where your employees and vendors can access information about your partnership – including contracts, order history, available products, turn around times, purchase order replication, and more. By incorporating a portal into your overall solution, you give all parties insights into data to move projects along faster.

Lastly, vendor bidding may be an important process in your purchasing decisions. Allowing for multiple vendors to submit responses to pricing and availability of a product that you can source from multiple vendors, along with the ability to create these requests for proposal and rank them by different supply chain measures (i.e. on-time delivery performance) are powerful and important features within Dynamics 365.

3. Purchase order issued

Hopefully, you have eliminated any paper or manual processes already, but if not, Dynamics 365 takes care of that step for you and tracks the status of all pending and completed PO’s within the system. This process enhances efficiency and streamlines order and stock management.

4. Receiving document logged

As items are received into inventory, it’s crucial to track and manage those items so they are applied to the project they are intended for. Within Dynamics 365, inventory tracking and management is simple and each item is easily tracked by location, department, and job. Handheld and mobile devices can be enabled to interact with the system so your team can immediately scan products to determine quantities available, locations, intended projects, and more.

5. Invoice matching and accounts payable

By automating your invoice processing procedures, you’ll easily eliminate human error, save money by avoiding late fees, reduce overhead costs, and streamline reporting capabilities. Within Dynamics 365, invoices are automatically matched against outstanding PO’s. This automatically triggers a workflow for approval to pay. Once approved, the invoice is processed and payment is sent directly to the supplier.
Microsoft Dynamics also allows you to define matching policies and rules by the vendor and even purchase order if you’d like to define your own policy matching/testing requirements.

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