Digitize GNFR On-Time Delivery to Manage Supplier Performance
Some companies still use manual processes by using the telephone, email and spreadsheets to manage GNFR (goods not for resale) supplier performance. While this system may have worked for smaller, less complex organizations, it is obsolete for lean, large, dynamic, and more complex organizations.
There are multiple technologies available that can help manage different aspects of GNFR spend. These newer technologies are important for a company’s growth. Any technology implemented should cut down on your team’s labor and errors, and it should improve accuracy in data management.
What Is the GNFR Supply Chain?
The GNFR supply chain refers to the sequence of events in the On-Time Delivery (OTD) process that involves order to receipt of goods. It includes manufacturers, suppliers, and buyers for products that are used internally for business operations.
Categories vary for different businesses, but all businesses experience the same issues when it comes to managing GNFR. In order to get a clearer picture of the process, the following is an example of a common GNFR supply chain transaction that should occur for projects:
- Buyer submits order to supplier
- Supplier acknowledges order is receipted
- Supplier sends ship date and ETA for shipment
- Supplier sends shipping information when it becomes available
- Supplier announces when shipment has left their facility
- General contractor (GC) scheduled according to projected shipment receipt
- Shipper/3PL reveals status/location of in-process shipment
- Field manager receives shipment
- GC installs shipment
The GNFR supply chain is more complicated than the direct spend supply chain even though the overall dollar spend is lower. It’s more complicated because there is a much larger transaction volume, higher numbers of buyers and suppliers, larger variety of purchases, and a huge number of decision makers. Because indirect spend does not directly affect revenue, it doesn’t receive the same level of attention as direct. For all of the above reasons, this area typically produces the largest profit leaks.
Traditional Methods of Managing GNFR Delivery
For many years now, the spreadsheet has been the most up-to-date method available for tracking and analyzing delivery data of GNFR. It is the primary tool that most companies rely on. It forces companies to track all GNFR purchases manually but is severely limited due to information silos (such as lack of real-time supplier delivery status).
Spreadsheets allow for frequent errors caused by manual data entry and lagging updates. This not only includes typos but also includes formula errors, Excel line limits, and other possible miscalculations. Or in some instances, the pitfall of a manual entry system is that it isn’t managed at all. A lot of the time, a company orders goods and just assumes they will get there on time and in full.
Many companies are accounting for GNFR spend using some sort of P2P and their ERP system exclusively. The problem is this software doesn’t have the tools necessary to real-time track and analyze delivery execution by missing real-time delivery statuses. These systems are great for accounting and automating invoice payments, but they lack the tools necessary to manage GNFR delivery execution.
The Future of GNFR Performance Management
The solution to this issue is complete GNFR delivery visibility. Having this visibility increases certainty of On-Time Delivery for these goods. It reduces the likelihood of errors and minimizes add-on orders. Achieving a fully transparent process is the answer every company needs to cut spending and increase their bottom line.
Technology today allows for new strategies for digitizing all supply chains, including direct and indirect spend. Companies are starting to implement new systems that make tracking clearer and more efficient.
But the benefits of digitizing order fulfillment go far beyond lightening the workload. It allows for improved supplier selection, improved supplier communication, and better risk mitigation and compliance while both increasing revenue and decreasing costs. Digitizing GNFR delivery management can accomplish all of this in a number of different ways, but two major examples are by opening/remodeling locations by the targeted time frame and minimizing excess inventory and expedited or LTL shipping.
Manually entering data into spreadsheets, depending upon the telephone and email is no longer an effective means of managing GNFR delivery. The future of GNFR delivery management lies in digitizing order fulfillment for efficiency and accuracy.
Purchasing and implementing a new system alone will not solve all the issues companies face. Companies need a holistic approach that includes reliable support. They need to invest in software that gives complete end-to-end On-Time Delivery Visibility and includes unlimited assistance in implementing and using it correctly. Their new system should ensure that procurement teams and supplier base can upload data, see ETAs, and quickly address problems as needed. The goal of this system is to decrease risk.
Unfortunately, there will never be a 100% accurate GNFR order fulfillment solution, but if your organization can take steps approaching that level of accuracy, you will see large benefits the closer you get.
Lumatrak provides a full range of real-time On-Time Delivery visibility tools to help better manage supplier and delivery performance from order to the final mile of your indirect goods delivery. Provided in the cloud through its Software-as-a-Service (SaaS) offering and already connected to vast numbers of manufacturers and contractors, Lumatrak’s solution can be quickly implemented to complement and enhance any ERP, Strategic Sourcing and Procure-to-Pay systems.
To learn more about how a better GNFR-delivery management solution could save your company both time and money, contact the team at Lumatrak today.