Direct Purchasing

Large Product manufacturing enterprises source thousands of new parts every year and keeping track of every quotation and negotiation, while absolutely critical, is extremely hard. Although the existing systems, provide a robust control on the purchase orders, very few have the capability to show every single action/ decision on each part. These discussions are buried in the gazillion emails the organizations generate and receive every day.

That’s where Zumen offers an unparalleled solution to manage the Direct Purchasing process and the communication with the suppliers. In one place and to keep track of every decision and negotiation. The part details are reviewed online in one place by the relevant members in design, costing, purchasing and manufacturing; if all well, passed onto the supplier by the click of a button. All registered suppliers that have received the RFQ, log-in and prepare a detailed quotation online.

The quotations are parsed and the competing bids are arranged side-by-side for the sourcing team to make the right source selection for the part (the buyer simply clicks on the quotation he selects); they are then passed through the complete approval chain as per the requirements/ local practice. In the process, the companies ensure they meet the highest levels of compliance & traceability, corporate governance .

Zumen captures supplier updates of the parts status and provides a clean dashboard of the part availability individually as a complete program; the dashboard is also expandable by commodity groups for a more detailed review.

The communication and the documentation related to the part approval, including discussions and decisions on deviation are captured neatly in one place. No need for the purchasing and development teams to dig through the emails anymore during the life-cycle of the part. Zumen streamlines the existing process without forcing you to change any of your existing workflow and approval paths. Its like you just graduated from the days of no telephone to using the smartphones in one step!

Managing Development Builds

Development Build Planning

At Zumen, we have some of the best expertise globally to figure out the complications of building a product batch in the middle of development and mitigating such situations. Simply login and look for the icon that says ‘Plan Development Build’. And it will automatically guide you to complete all the necessary information like the build phase, number of units or samples, location or plant where you would like to complete this build.

You may have to input the Bill of Material for each of the variant. Depending on how you would like to use Zumen, it could be pulled from your PLM like TeamCenter, Enovia or WindChill or created inside of Zumen directly.
The application then tracks all the material from inside the BOM against the purchasing program and the available inventory in the company to provide you the material readiness to complete these development and trial batches.

Development Build Material Readiness

You are a product manufacturing company. And your products could be as diverse as hair- dryers and air conditioners or as simple as a cell-phone tower or a 300HP Farm Tractor.

In every case, you would like to build a few units to check the product and the beauty of your design, feedback of your potential customers before moving into full-fledged production. As important as these builds are in your development cycles, keeping track of the Bill of Materials (BOM) and the status of each one of those parts, track their movements through warehouses across the countries to finally have them all in one place to complete the build… whooof! We have been through these and spent years wondering why these processes aren’t any better. We believe it is a crime to deploy our brightest engineers to track these parts instead of solving other serious problems.

Managing your purchasing process throughZumen allows you to handle these like the back of your palm. The status summaries you usually take days or weeks to prepare from your existing ERP systems and manual tracking, are now available real-time. Imagine the productivity improvement! Since this is system based, it doesn’t make any difference if you are managing 2 builds or 200 builds; every build readiness is available real-time on the dash.Now, its really scaling product development.

Budgeting & Controls

Budgeting & Spending Control

You are one of the few expert candidates that love the budgeting exercise. But we believe most of the workforce involved in preparing and explaining budget summaries dread the process. Little do they know how the budgeting process help large organizations to manage millions if not billions of dollars in cash flow, ensure spending at the right places and avoid non-critical and low priority spending.

Since Zumen is built to address such critical but dreadful processes, it naturally covers this part of your enterprise as well. Zumen gathers every single budget item from across the organization, keeps track of the discussions/ comments on each one of these items, documents the approvals. The users can attach all relevant documents in the same place as well. So, no more revision 100 or revision 101 of your budget spreadsheets. Zumen handles it all for you online.

Zumen may not be as expertful as you are in this process… but it can at least share you the split by departments and if you do care, by business units inside each department. And if you are running an organization, the summary is also available by region or by plants. And if you are a global enterprise, you would at least revise your Annual Operating Plan (AOP) every quarter. You can manage all these in Zumen. And, when your staff enter the budgets, Zumen also provides them a chance to compare the older budget inputs right where they are input. By the way, you can also review the older numbers side-by-side within the summary. Check out the demo on how the budget process is handled in Zumen.

Annual Operating Plan

Zumen totally agrees with you that managing the budgets, transparency of the spending accounts and religious follow-up of the plan versus actual are extremely critical.

We have researched how the fiscally responsible organizations globally follow the process for control & compliance and implemented the best process there is , in our product. There are multiple cost centers and spending categories. Each company will set up its own account structure by a few simple clicks and entering the names.

You will also have a chance to identify the cost center owner (user) and the management chain that is responsible for spending in that particular account, lets say by country or by a department or a brand. Each cost center will have a few of the users identified as budget planner who have access to creating the budget.

Forecasts & Revisions

At Zumen, we totally appreciate the organizations run with proper fiscal responsibilities. And one of the key rituals these organizations follow is the monthly or quarterly budget revisions or the Forecasts. And you have the complete package available to start with the existing annual operating plan (AOP) or the current forecast and make revisions as per the current status.

And these are tracked by every line item (Unique Budget Item IDs) or by projects or cost centers or any other way you have set them up. All these revisions and corrections are saved with a proper version control and approvals. Once again, eliminating the need for endless spreadsheets, and infinite number of revisions sent out to the regional and central planning for them to make sense of these changes and update the master sheet for the CXO reviews.

Budget Item Approvals

One of the major advantages of the online budgeting tool is the ability to track the budget items individually irrespective of the size of your organization. Each item is created as a unique budget ID and depending on the account under which the item has been created, pass through a chain of approvals. As these approvals pass from one level to the next higher level in the organization, the application automatically adds the budget items from all the respective teams that the managers are responsible for. And at any stage, the managers shall be able to approve and send forward up or decline and send back down.

The application maintains the history and the revision control for these individual items; users and the managers at any moment during their discussion or in the middle of an analysis, shall have the access to open the earlier revisions. This cuts a lot off ping-pong and clarification sessions across the organization; prevents loss of productivity due to the need for any justification and unnecessary report and data generation.

Spending Tracking Versus Budgets

So, the application has already taken the input for the spending you have planned for the organization. The next step is to ensure the spending you had agreed with the management and the board is happening as per the plan. Thankfully, the application on the other hand also is keeping track of the purchase orders and the payments. (Don’t worry, in case you are using one of the popular ERP packages to issue the purchase orders and release the payments, Zumen will pull up the data from there).

There are several common links between every spending plan and the actual spending, like the purchase request number, budget item number, project or program codes and the part numbers. And by accounting for these links, the application prepares executive summaries to explain the plan versus actual on the spending commitments and cash flows.

And yes, these are available real time; so allows for the right level of executive oversight and intervention; in the process highlighting the system bottlenecks, capacities & capabilities.

Indirect Purchasing

Indirect Purchasing in a product manufacturing organisation constitutes every purchase that is not directly used in building of the product the organisation markets and sells. While the Direct Purchasing process presents its own set of challenges, it also has a certain linearity and predictability as it is part of the revenue stream. Indirect purchasing on the other hand, comes with a completely different set of challenges and is tied directly to how the operations is run and what are the choices in front of the executive team and the operations team to support their revenue stream, namely production and selling; Primarily because of the decision necessary on each purchase.

For this reason, the Indirect purchasing is directly linked to the Annual Operating Plan of the organization (AOP), namely, the annual budget. And the nature of these purchases are quite diverse apart from being recurring (day-to-day operations) or One-time (Infrastructure, Facility and Capital).

Zumen completely appreciates the handwork that goes into the Indirect purchasing process. There are some savvy tools and platforms available today for such indirect purchases, particularly when there is a need for purchasing a commodity or retail item. However, Zumen goes beyond the regular retail purchases and helps you to manage the purchasing of every kind of item that are not available in the retail sphere.

Just like you complete the RFQ and Sourcing selection process in direct purchasing, you are able to forward your request for quotation directly to your suppliers and partners; in turn, the suppliers are able to generate their quotations online on an industry standard quotation template. (Even before you actually send the RFQ to your suppliers, you also have an option to review the need for the purchase and approve the purchase request so the organisation doesn’t spend time looking for quotations for an item that may not be required from the management perspective). What more, these requests and the quotations are completely tied to the annual budget so, every purchase decision is made on individual item and the overall spending perspective.

In case you are wondering how the Purchase Requests, Sourcing Selection and the Purchase Orders are approved, rest assured, Zumen allows you to import your current approval process, by cost centre, by spending levels; will allow you to follow the same process within zumen.

So, you have a complete lifecycle of a indirect item purchase, start from the budget, purchase request, RFQ, Negotiations, sourcing selection, Purchase Order; data and decision at each point, comments and documents, specifications, milestones and agreements. Again, absolutely no need for you to move from one place to another, search through emails from across the organization, over the months or years.