Presentation on theme: "Revision A - 23 January 2009 Supply Chain Collaboration via iSupplier Portal & ERS (Evaluated Receipts Settlement)"— Presentation transcript:
Revision A - 23 January 2009 Supply Chain Collaboration via iSupplier Portal & ERS (Evaluated Receipts Settlement)
Insert Footer 2 Introduction – iSupplier Portal & ERS Table of Contents iSupplier Portal Purpose3 iSupplier Portal Purpose iSupplier Portal Capabilities4 iSupplier Portal Capabilities ERS Defined5 ERS Defined Business Drivers6 Business Drivers ERS Process 7 ERS Process ERS Advantages & Disadvantages12 ERS Advantages & Disadvantages Key considerations for Suppliers15 Key considerations for Suppliers
Insert Footer 3 Introduction – iSupplier Portal & ERS Purpose: Supplier Collaboration Ingersoll Rand made an investment to implement a true partnership with our vendors through an Oracle product called the iSupplier Portal. At the end of this presentation, we will provide you with tools you need in order to take advantage of the portal and collaborate effectively with Climate Control Technologies.
Insert Footer 4 Introduction – iSupplier Portal & ERS iSupplier Portal Capabilities Suppliers can view: –Forecast –Purchase Orders Orders to be acknowledged Past Due Orders Purchase Order History –Receipts –Delivery Performance –Invoices Logged & Payments –Defects & Returns –Product History Supplier actions: –Acknowledge Orders –Enter Advanced Ship Notices –Reschedule Orders –Cancel Orders
Insert Footer 5 ERS Processing Evaluated Receipts Settlement (ERS) = business process in which invoices for supplier payments are auto-created based on goods received from supplier. ERS: Defined ERS eliminates need for suppliers to send invoices – instead, relies on pre-negotiated price agreements between supplier and Ingersoll Rand (IR). With ERS, payment generated based on receipt transaction processed by IR.
Insert Footer 6 ERS Processing Traditional Transaction Process: 1. IR places a Purchase Order (PO) with supplier. 2. Supplier ships goods and bills IR by sending invoice to Accounts Payable (AP) department. 3. IR receives goods. 4. AP department then enters all invoice information into accounting system and matches invoice to goods received and/or the PO. 5. Payment is made to supplier based on the match. Business Drivers
Insert Footer 7 ERS Processing The Traditional Procure-to-Pay Process
Insert Footer 8 ERS Processing Disadvantages Traditional Process Manual Processing Invoice processing is largely manual. Results in data entry errors that could be very costly, sometimes resulting in unauthorized payment disbursements. Results in inconsistent application of business rules resulting in an increased risk of process non-compliance. High Procure- to-Pay cycle time Much time lost when mailed invoices on the way from the supplier to the IR’s AP dept. Invoices entered into system in batch process. By the time the invoices entered and approved in system, 1 st discount terms usually missed. Invoices may be put on hold if issues arise in matching process – can result in payment delays to suppliers. High admin costs for IR and Supplier High cost inefficiencies. Admin costs of manual processing are typically quite high, particularly for IR, from activities related to the manual data entry. For supplier, the costs associated with billing activities originate from non-value added activities like mailing the invoices, etc.
Insert Footer 9 ERS Processing The ERS Process –In the ERS process IR places a Purchase Order (PO) with supplier. –The supplier ships the goods. –IR receives the goods. –The system automatically generates an invoice number based on the receipt transaction and the actual delivery of goods/services. –Payment is made to supplier based on the receipt transaction. Business Drivers
Insert Footer 10 ERS Processing ERS in the Procure to Pay process ERS Process In the ERS process, the invoice creation process gets automated. The receipt transactions are used as the basis for the creation of these auto- invoices.
Insert Footer 11 ERS Processing The ERS process differs from the traditional process in that the supplier invoices no longer form the basis for payment in IR’s system. After goods or service delivered, the buying organization processes a receipt transaction which automatically generates an invoice number. The receipt transaction facilitates the payment. ERS Process Not equal to Invoices Basis for Payment
Insert Footer 12 ERS Processing ERS Advantages for Suppliers Assurance of timely payments Reduced costs associated with billing Increased cost efficiencies Advanced visibility using iSP to view receipts, payments, purchase order information
Insert Footer 13 ERS Processing ERS Advantages for IR Lower invoice processing cost associated with payables administration and increased efficiencies Increased payment accuracy resulting from the automation Better utilization of vendor discounts Better supplier relationships
Insert Footer 14 ERS Processing ERS Disadvantages for Suppliers
Insert Footer 15 ERS Processing Key considerations for Suppliers Training Need adequately trained personnel who understand ERS process at IR and supplier facility Pricing IR and suppliers must maintain accurate pricing on POs to eliminate payment discrepancies Reconcile Use packing slip to reconcile account – include Blanket PO and Release Number
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