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.

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