Genpact: Agility through Procure-to-Pay (P2P) Solutions
Genpact is leveraging its procurement expertise and digital solutions to improve cash-flow management and reduce risk during challenging times.
Genpact is a global professional services firm that makes business transformation real. The firm drives digital-led innovation and digitally-enabled intelligent operations for its clients, guided by its experience running thousands of processes primarily for Global Fortune 500 companies. Genpact’s work with healthcare companies is focused around improving the user experience, increasing standardisation and transforming the governance structure across procurement and accounts payable.
Genpact facilitates much-needed change management to help users understand the changes to the P2P process and empower the team to meet its goals. In one particular case study with a healthcare company, Genpact examined and identified what was holding back P2P and redesigned the company’s policies and processes to ensure they were streamlined and aligned to business objectives.
As part of this transformation programme, Genpact:
- Simplified and transformed P2P processes and policies, including supplier onboarding.
- Strengthened the supplier base by introducing robust governance and recommended ways to consolidate the number of vendors.
- Cut 50% of supplier master-data entries by reducing the number of duplicates.
- Put in place guidelines for suppliers on how to submit invoices, which decreased the number of invoices the company received after the payment due date.
- Introduced alternative buying channels to minimise low-value transactions.
- Revamped the purchasing card programme, importantly policy and usage instructions.
- Delivered end-user training and adoption support for the P2P platform to users internally and suppliers.
- Create automated dashboards and improved P2P reporting and performance measurement.
What was the impact?
By aligning P2P goals with business objectives, the company improved supplier relations and released significant value. Working closely with the healthcare company, Genpact delivered significant value by:
- Reducing the volume of invoices by over 50%.
- Improving payment on-time from 62% to 80%.
- Increasing supplier onboarding time by 50%.
- Getting purchase orders approved 60% faster.
- Improving goods receipt first-pass-yield on the P2P platform from 40% to 62% by streamlining policies and training users.
- Improving PO compliance through higher catalogue penetration on the P2P platform, due to end-user training and a more robust governance structure.
Integrating P2P across the whole process is essential. Merely focusing on streamlining downstream payment overlooks most of the improvement opportunities. At least half of the issues that affect a global P2P organisation are from inefficiencies in upstream procurement operations. Instead of simply reducing and resolving exceptions in the P2P processes, users are now trained with end-to-end accountability in mind, which will allow for a greater focus around fixing issues for the long-term.
The aim is that the company’s revised approach means suppliers work with customers that pay on time, are efficient and easy to do business with. Internally, the company can dedicate more P2P bandwidth to higher-value activities.
EU and US agree end to Airbus-Boeing supply chain tariffs
The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic.
Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years.
It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC.
The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn.
In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products.
Boeing-Airbus dispute by the numbers
- The dispute began in 2004
- Tariffs suspended for 5 years
- $11.5bn worth of goods affected by tariffs
- $3.3bn in duties paid by businesses to date
- 15% levy on aircraft and 25% on non-aircraft goods suspended
Both sides welcome end to tariffs
European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.
“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.
Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”.
The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."
This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.
Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”