My Top Three Factors of Success

 

Just over three years ago I decided, along with my mom and sister, to convert a separate unit of my parents' house into a guesthouse.    

The unit, accessed from the back part of the house, served as my father's workroom.  It was filled with an unfathomable number of books and magazines, tools for his leather work, and small desert animals about which he lectured.  He was a high school biology teacher, a marksman, a leatherworker, an expert on dogs and on desert animals, and an artist.  His office was a mess, as was the entire back yard.  For so many years none of us saw the potential this place had, overlooking the beautiful Negev desert and the Dead Sea in southern Israel.

After my dad had moved into a retirement home, I suggested we turn his workroom into a guesthouse.  I envisioned a high-quality establishment for couples looking for relaxation. 

My thought process began with an evaluation of assets and constraints. 

The unit was small, comprised of three spaces.  Clearly one would become a bedroom and the other a bathroom.  The third could be converted into one of three - a living room, kitchen, or dining area.  The backyard, adjacent to the living unit, was very large and situated on a cliff overlooking the desert. 

I put myself in my guests' shoes.

I tried to imagine what a couple visiting from abroad might want from a place like mine.  For me, the desert was not that special – after all, I grew up in this area.  But for tourists visiting from colder, greener, and wetter areas, the desert would be a major attraction.  So, the backyard with its view of the desert and the Dead Sea had to be fully exploited.  It would become a large wooden deck, filled with amenities such as a swing, a gazebo, and a grill.

The living unit had to be top notch.  Couples traveling from abroad, visiting the hot desert, would want nothing less than perfection.  I therefore invested in a world class bed, a large TV with endless channels, and a comfortable shower with never ending hot water.  As for the third room – I decided to turn it into a fully equipped kitchen.

I wanted to create a memorable experience.

It wasn't just about the comfortable bed or large kitchen.  I had to make my guests feel like they were the center of attention, even if they stayed for just for one night.  I literally put myself in their shoes, thinking of every need I might address.  Band-aids, Q-tips, soymilk, regular milk, water, ice, coffee, tea, salt, pepper, oil…  you get the picture.  I even bought a garlic crusher.     

And of course – uncompromising cleanliness.  Down to the last detail.

Feedback

My guesthouse can be booked through booking.com and AirBnB, which is also where one would find reviews and feedback.  Not surprisingly, the same things I spent so much time thinking about are also those about which most guests comment: the cleanliness, the attention to detail, the comfort, the views, the service.

Conclusion

Much more went into building my business.  There were financial matters, market research, marketing and sales, ongoing maintenance, and more.  But these are the top three elements that contributed to my success: understanding what I have to work with, thinking about the place from my customers' perspective, and doing what it takes to meet their every need.  The feedback speaks for itself.

 

 

 

 

If You Want An Efficient Supply Chain, Don’t Mess With Your Suppliers

We all know the past few years have been challenging as far as supply chain goes, and it doesn’t look like things will improve any time soon.  According to McKinsey, global supply chains suffer from three primary challenges: labor shortages, equipment availability, and the ripple effect of global bottlenecks. 

IndustryWeek magazine adds that suppliers are struggling to maintain capacity, that there are container shortages, and that there are impactful economic factors.  They recommend that organizations, particularly manufacturers that more heavily rely on an efficient supply chain, explore solutions to minimize their risk and exposure.  These include creating a mix of domestic and international suppliers, implementing digitalization strategies and a management operating system that provides better visibility across the supply chain, and improving data capture and integrity.

Manufacturers typically have complex supply chain environments, with processes that are based on agreements and blanket orders with inherent ordering rules and conditions around pricing, shipping, and deliveries, as well as processes with mandated supply chain rules, and special delivery scheduling and conditions. Such environments could involve orders with hundreds of line items, partial shipments per line and multiple receiving and invoices per line, as well as processes that include intermediate warehousing and/or 3PL, QA, MRB, 4WM and returns, import via sea or air freight, and more.

In such environments, enterprises invest a significant amount of time and effort ensuring that suppliers comply with their business rules and policies, following up on order fulfillment, supply chain execution and on-time delivery, validating invoices, handling invoice reconciliation processes, validating payments, handling a significant number of errors and discrepancies, and preventing fraud.  Additionally, complex environments often involve multiple geographies and the associated differing rules, regulations, and cultures, as well as the presence of multiple applications and ERP systems.

In recent discussions with three major industry players, one from the Oil and Gas industry, the other a semiconductors manufacturer, and the third in the aerospace industry, common themes emerged.  All three used to suffer from inefficient supply chains, which resulted from bad supplier relations.  Bad supplier relations developed because of an inefficient invoice management mechanism, and it was digitalization, visibility, and data capture and integrity that made a difference.

When suppliers are in the dark about the status of their invoices, and find themselves repeatedly inquiring about the payment date, that’s bad news for their customers.  If weeks go by before finding out that the invoice was incorrect or has some other issue that prevents its payment, that’s even worse.  Bad supplier relations resulting from inefficient invoice management systems could lead to supply chain gaps that negatively impact production lines, which is bad for business.  That’s precisely what these three companies used to suffer from.

All that changed once these three leading corporations implemented an automation system that provided suppliers with invoice submission guidance aligned with corporate business rules and policies, efficiently validated each invoice for accuracy, and created complete transparency into invoice status and payment date.  Knowing right away that an invoice is approved or rejected and being able to plan their cash flow has had a tremendous impact on these suppliers, reducing uncertainty, and freeing them from having to manually inquire about invoice and payment status.

For these buyers, the impact was clear: supplier relations improved, errors were removed, paperwork disappeared, and most importantly – their supply chain became more efficient and reliable.

The automation system that these companies implemented addresses source-to-pay activities across direct and indirect spend, utilizing hundreds of software bots and relying on Artificial Intelligence and Machine Learning technologies to provide sophisticated document review and validation within context of the entire workflow.  Because of the value it delivers to suppliers, over 90% of them fully participate in the process, which covers close to 100% of invoices and over 90% of spend.

While a source-to-pay process automation tool may not address all supply chain challenges, it could have a significant impact on production lines and on the competitive nature of both buyers and suppliers and is an important factor contributing to improved buyer-supplier relations.  So, if you want an efficient supply chain – don’t mess with your suppliers, collaborate with them!

A Better Way to Manage Contractor Invoices in the Software and IT Services Industry

Corporations that deliver software and IT services find themselves concerned with an ever-increasing demand for transformation and improved customer experience, growing requirements around cybersecurity and data privacy, various types of geopolitical influencers that only appear to be increasing in severity, and the "ordinary" lineup of competitive pressures.  To effectively address these and other challenges, they often find it smarter to seek external expertise in the form of third-party service providers.

But working with third-party service providers is no easy task, as there may be little clarity around the quality, or long-term relevance, of the service rendered even after its completion, and whether it was ultimately worth the time, cost, and effort involved.  

The process, beginning with the identification of a problem or need and the decision to look outside the organization for a solution, through specifying requirements, identifying, and selecting service providers, governing their work, and measuring their outcome, may involve several departments and individuals.

Once a service is rendered, the buying organization must verify that the service was received as ordered, and that the provider's claims of service rendered are accurate.  This is the point at which the difference between the provision of services and goods becomes clear as there is no "goods receipt" or stock to prove that the invoice is justified.  As there are typically multiple parties involved, the invoice ends up floating around the organization, going from the original requester to finance, Accounts Payable, and potentially other groups before once again ending up at the requestor's desk, waiting for approval. 

This long process opens the door to a new set of problems, potentially resulting in lost invoices, delayed payment, double-payment, wasteful interactions, and a negative impact on cross-organizational as well as buyer-supplier relations.

One way to address this final set of challenges begins with getting all involved parties on the same page, or platform, and creating full transparency into the invoice management process for all parties in the buying organization as well as the supplier.

Invoice approval could be performed rapidly using a three-way matching mechanism.  The invoice would first be converted into a service entry sheet in the ERP system, allowing the requester to validate it, and other finance and procurement stakeholders to approve or reject it.  Once the service entry sheet is validated and approved, the invoice would be automatically matched against it and against the purchase order – a three-way match validation mechanism that mimics the approval a goods invoice.

An automated solution of this type could go a long way towards improving buyer-supplier relations.  It would result in faster and more accurate payment, reduced paperwork, and manual archiving, and far less time wasted on addressing phone calls from angry suppliers.

It Takes Two to Tango – How Supplier Satisfaction Impacts Your Profitability

 

Sub Optimal Selection Process

Larger companies that face procurement inefficiencies, such as the abundance of data errors, lack of supplier compliance, fraud, or slow invoice processing, often look for automation solutions, of which there are many in the market. 

The decision-making process around which solution to implement is not unlike that, which might take place in other areas of the organization – perform some research, perhaps consult with a trusted source, select the best-known names, and conduct some discovery calls.  In the end, organizations are made of people, and people minimize risk by going with what is familiar.

But does this approach always lead to optimal results?  Companies often end up going through a lengthy and expensive implementation process and significant organizational change, only to find several months later that their decision did not yield the desired results, at best.

When it comes to Source-to-Pay (S2P) automation, most solutions do not deliver a reasonable ROI because they are too expensive to implement, and in the end, do not enlist participation of most suppliers.

It Takes Two to Tango

For an S2P automation solution to be effective, it must involve the participation of most of the company's suppliers – not the current industry range of 5%-30%, which is negligible.

To achieve close to 100% supplier participation rate, an automation solution must focus on the needs of suppliers at least as much as it does on the buyer.  It must provide them with process transparency; automated, real time, and intuitive guidance; immediate error or discrepancy identification; discrepancy resolution support; and much more – ultimately, saving them time and effort, and enabling them to get paid faster.

As with any software solution, the time, effort, and cost of implementation should be kept to a minimum so that suppliers can continue focusing on their business, and not on the implementation of new systems – particularly if each customer requires the use of a different one.  They are far more likely to comply if they can continue working in familiar environments with minimal or no additional financial investment.

If suppliers participate – buyers benefit. 

A New Approach is Needed

Let's go back to that selection process.  You've gone the safe route and have chosen a leading brand, but frankly all the vendors you considered sounded the same.  After spending anywhere between four and twenty-four months to implement the new solution, including countless manhours and hundreds of thousands of dollars – your AP team seems to face the same problems, and your company's profitability does not improve.

A new approach is needed, which focuses on both sides of the story – buyers and suppliers.  One that is simpler, faster, and more cost-effective to implement, which enables participants to maintain existing systems and processes and that is intuitive to use.  A system that automates a full range of activities by looking at the entire process, and not at its individual components.  In the end – a system that makes it easier to do business, that speeds up processes, improves supply chain and contributes to competitiveness.

Such a solution exists.

Ilan Friedman, August 15, 2022

Talking about Nipendo's new, self-service offering

 

Talking about Nipendo's automated Process Governance capabilities

 

Ensuring Data Accuracy and an Efficient Supply Chain in the Chemical industry

 

According to American Chemistry Council, the chemical industry accounts for more than 25% of the United States GDP and creates more than half a million skilled jobs.

The industry touches every aspect of our lives – from food to clean air and water, safety and security, energy, and medical treatment.

In a September 18, 2019, Accenture article, Ojas Wadivkar states that "digitalization could unlock up to US$550 billion in value for the chemical industry, with digital supply chain initiatives driving US$70 billion of that value" and that "by systematically combining digital technologies, chemical companies can drive efficiencies and realize average savings of approximately US$90,000 in terms of cost per employee."

The chemical industry faces an abundance of supply chain challenges, one of which concerns invoice discrepancies around the delivery of gases and liquids by trucks.  In such cases, a mismatch may occur between the actual weight of chemical materials as measured by the buyer at the point of delivery, and the weight for which the supplier invoiced based on their measurement.  Buyers find it difficult to reconcile and document the difference, and therefore to perform a three-way-match of the invoice data.

Nipendo, a leading innovator in the digitization of RFP-to-Pay and supply chain processes, offers a solution to this problem by enabling the person who receives the materials to update actual weight received using a mobile app, and to include a photo of the weighing certificate.    The mobile app is an integral part of the Nipendo platform, an end-to-end solution through which 95% of invoice processing is performed automatically, error-free, all the way through to the buyer's ERP system.

Chemical manufacturers are required to perform intensive maintenance of their production line given their high levels of wear and tear.  The challenge is to properly and effectively validate invoices for such services – beginning with documenting them in the system, followed by approval and so on.  This manual process is triggered by the supplier's invoice, and results in the creation of a service entry sheet in the ERP system.

Another challenge faced by the industry lies in the manual way by which invoices are processed for maintenance services of the production line.  In many places the process of documenting the service, approving it, and finally paying for it is slow and error prone. 

With Nipendo, the invoice is sent electronically by the supplier and is automatically placed on hold.  Information about the transaction is then sent to the ERP system, which creates a draft Service Entry Sheet (SES) for an inspector to approve, reject, or modify.  Once approved, the SES is transmitted to the ERP system where it undergoes three-way matching before releasing the invoice for payment.  Automation significantly reduces processing time, frees up resources and removes errors.

Using the Nipendo platform, buyers and suppliers in the chemical industry ensure data accuracy and an efficient supply chain that impacts the timely delivery of goods and the accurate and timely payment for them.

Sources:

https://www.americanchemistry.com/chemistry-in-america/data-industry-statistics#:~:text=The%20industry%20supports%20a%20quarter,communities%20where%20facilities%20are%20located.

https://www.accenture.com/us-en/blogs/chemicals-and-natural-resources-blog/chemical-supply-chain-future

The Effective Way for Healthcare Facilities to Manage Inventory Levels

Properly managing medical equipment inventory is essential to the effectiveness of hospitals and healthcare facilities, and to their ability to appropriately provision health services. The inventory must be recorded and updated continually so that it provides an accurate picture, enabling the healthcare facility to avoid shortages, track expiry dates, and accurately plan and budget.

Drugs and Medicine have specified "end of life" dates, and therefore medical care facilities and pharmacies have limitations on the inventory levels of such products that they can maintain.  This limitation, coupled with high demand for such products within short time frames, places pressure on suppliers to be ready to deliver within very short time frames. 

Consequently, the healthcare providers, or "buyers" in this scenario, must receive schedule confirmations and advanced shipping notifications (ASN) from suppliers.

Scheduling management mechanisms that involve manual processing could result in impactful delays around goods receipt, order management, and deliveries.

One way by which healthcare providers can better manage inventory levels and scheduled supply of such items, is through an automatic order management system that generates orders directly from the buyer's ERP system, sending them to the relevant suppliers within seconds.  Suppliers could then immediately and easily respond to the order with PO confirmation and schedule confirmation, ideally using a variety of communications methods - a B2B interface, Web portal, Mobile App, or email.

To manage scheduling within such short time frames, suppliers should be able to effectively communicate with their customers (the healthcare facilities) around scheduling and should receive automated follow-up and reminders regarding required tasks and information.

Suppliers should also be able to send shipping notifications to their customers in advance, so that the latter can gain advance knowledge of the shipment details and possibly also create a draft Goods Receipt on that basis.

MOVING FROM MANUAL TO AUTOMATED SUPPLIER MANAGEMENT IN MANUFACTURING

Manufacturing companies often face challenges associated with complex supply chain environments, which significantly impact the way they manage supplier relationships.  Procurement in these settings involves working with a variety of different supplier types, sometimes based in different global locations, which must comply with specified policies and timelines to provide widgets, components and services associated with the production of intermediary or final goods.

Supply chain efficiency is critical for maintaining effective manufacturing processes, for meetings supply commitments and for maintaining competitiveness, and one of the ways by which manufacturers can maintain effective processes is through the intelligent automation of procure-to-pay processes.

When interfacing suppliers around shipment matters, for example, manufacturers often manage interactions manually, using e-mail and phone calls for back and forth communications and relying on Excel files to track data.  This manual way of managing supplier interactions is time-consuming, error-prone, and overall inefficient, potentially leading to supply, and therefore manufacturing delays.

Automation could be an effective tool to streamline supplier communications, particularly by creating greater transparency around order scheduling, by automatically tracking and managing scheduling and following up on missing data or activities, by providing clear and automated guidance to both buyers and sellers around each individual process and its unique requirements, and by requiring compliance.

Not all automation tools, however, can demonstrate a reasonable return on the investment (ROI), nor can each of them effectively handle the complex nature of such interactions, which characterize manufacturing industries.  To manage this complexity, the solution must be able to view each process as unique, to apply to it the appropriate rules and policies, to ensure compliance, to identify and require the correction of errors and discrepancies, and to identify and manage disputes.

Some organizations try to piece together automation solutions and procurement applications, but those do not provide end-to-end visibility and therefore have limited effectiveness.  To achieve optimal ROI, such solutions must be holistic in nature, viewing each process in the context of the entire set of procurement activities and the environment in which they play.

Ilan Friedman