VENDOR PORTAL in Manufacturing Facilities

September 10, 2012 10:52 am

Prashant Kolhatkar of Kirloskar Brothers Limited shares his hands-on experience of implementing vendor portal at manufacturing plants
Many industrial manufacturers have implemented ERP packages for their resource planning. Mainly the visibility and access of such ERP Packages is restricted only to the internal resources of the organisation. Since the vendor is also a major contributor towards successful supply chain, he should also have an online picture of the current scenario of supply chain including orders, deliveries and dispatches. The purchasing department of each manufacturing plant is usually at plant level, with the central support from the corporate sourcing department. Hence, the dealing of vendors for supplies to each plant is mainly with the individual plant level purchasing department. The communication to external vendors for purchasing transactions (purchase orders/delivery schedules/payments) is usually through traditional means like paper/e-mail/phone if such online facility is not available. The exponential business growth is demanding to and fro real time communication with the vendors of manufacturing plant, so as to deliver quality products to customers in a more professional way, and this probably can be addressed only through a user-friendly vendor portal.
If vendor portal is not available it will lead to the absence of following information to vendors:• Real time Information of Purchase orders placed on vendors • Real time Information of all pending order status of purchase orders / delivery schedules resulting in the supplies from vendors not available on time. Hence, making it difficult for further supply chain management plans to support production planning process• Status of dispatches as per company records made by them to purchaser • Acceptance made by the purchasing company for the material received from vendors • Payment status of invoices raised by vendors• Vendor profile available with purchasing company• Vendor performance communication.
Vendor portal will also help in addressing the following pain areas: • Vendors will not have to follow up with various officers at purchasing company for same requirement/information• Central coordinator for communicating/considering ideas/suggestions to be made by vendor • Lesser time required by vendors for getting status of various requirements (payment status/dispatches)• Common platform for updating vendor capabilities.
Material departments mainly have following difficulties:• Higher time and cost for communicating orders/dispatch schedules to vendors• Higher follow up to ensure timely receipt of material• A person specific availability of updated data of vendor capacities.
Difficulties faced by other departments:• Timely and appropriate Communication to vendors about payment status• Higher time & cost is consumed for pre‑dispatch inspection activity at vendors’ end and to communicate the inspection results to the concerned person • Similar problem is also faced in CAPA (corrective action/preventive action) analysis communication• Time consuming follow-up with vendor by finance department for collecting various forms (like C Form)• Problems in communicating and monitoring project milestone activities.
Above resulted into:• Asynchronous supplies from vendors as compared with the demand/delivery schedule of purchase orders• Late status update at vendor end for rejection by purchasing company.
The corporate sourcing department at various manufacturing organisations is a centralised strategic department to implement and use vendor portal to overcome above difficulties through effective communication between vendor and different purchase functions. Also, today a need is raised by vendors to have an online portal for central communication point.
The online vendor portal consists of three major functions:• Purchasing process (enquiry & quotation, order & delivery schedule communication, dispatch details by vendor)• Online ERP reports (order delivery schedules, material receipt & rejection details, payment status & vendor profile)• Communication channel (document sharing, inspection calls, e-mail trigger for events, CAPA analysis, communication of ideas / events / news / vendor capabilities).
Anticipated benefits of implementing the vendor portal are as below:• Process driven online RFQ and quotation cycle along with quotation comparison• Online real time processes like communication of orders, delivery schedules, dispatch details, material receipt & rejection at purchasing company, payment status, updating various forms by purchasing company/vendor, two way communications of innovative ideas/suggestions/queries, vendor capability updates• Reduced dependability on person specific process/reports both at purchasing company and vendor end.
Usually a cross functional team consisting of purchase / finance / quality assurance / corporate global sourcing / IT department is formed to finalise the exact scope of vendor portal. Detailed discussions and brainstorming takes place before finalising the scope and requirements.
A separate role and authorisation matrix is defined to have separate roles with authorisation control for:• Vendor – Should be able to control data related to his account only• Purchase – Purchasing transactions related to all related vendors• QA – Inspection activities related to all vendors• Purchasing & QA Department Head – Reports for their respective department activities• Finance – Activities related to finance• Central Coordinator – Coordinate central activities• System Administrator – System Administration tasks.
The trainings are then arranged for all the stakeholders including purchase, QA, finance, and vendors. It is also necessary to ensure that the required hardware is available with the vendors, which are to be enrolled for the vendor portal.
The author is Prashant Kolhatkar, Manager – Corporate Information Centre, Kirloskar Brothers Limited. Kirloskar Brothers Ltd has also implemented vendor portal in April 2012 on Microsoft SharePoint 2010 platform. Presently the user base for the vendor portal is around 400 vendors.