Purchase-to-Pay (P2P)
about this project
We were asked to look at the Purchase-To-Pay (P2P) (end-to-end) process of a large Energy client, in 2018. Everybody across the process and from around the world were brought together to take part in a 2-day VSM on the P2P process. Locations ranged from Budapest to Bangalore and had employees from the offshore site, buyers and warehousing to ensure coverage from across the process
There were numerous improvement activities across the Purchase to Pay (P2P) process. These were independent projects and at times, were in conflict with other parts of the process. Processes were not being followed by supply chain and Operations, each one blaming the other for current performance
There were more than 50 vendor managed warehouses, storing materials, that had not moved in several years, while stock levels were increasing
Key Project Summary "At a glance"
Project Scope
- The scope involved a complete review of Supply Chain and business processes that cover: requesting / requisitioning, purchasing, receiving & storage, paying for and accounting of all materials within the regions scope of control.
- Focus areas included both Client owned and Vendor Owned or controlled stock.
- In service of operations the primary objective was:
- The correct material
- At the correct time
- In the correct place
- In the correct packaging
- In the correct quantities
Improvement Strategy
Deployed Methods:
- Agreed Lean Deployment program
- Workplace organisation using 5S
- Kaizen Events for rapid change
- Training of staff for sustainability
- Performance Management
- Operations and Procurement dual
- Sponsorship of all Improvement Projects
Benefits Delivered
- £5.4M cost OPEX reduction
- 2000 hrs. removed from planning activities
- £20M Reduction of Client owned materials stored
- 40% Reduction in warehouse storage
- Capability to Replan Work if not started, removing need for child work orders
- Single Package Material for all work order, no split materials sent to site
- End user packaging now implemented as standard / rather than warehouse
- 76% Improvement: 6 week planning time frame achieved. Compared to 300 days previously.
- Aligned buying department with end user. Materials now ordered with lead time
