Tag: procurement

From Customer to Head of Delivery: Experiences with the Netfira Platform

Employee Spotlight

From Customer to Head of Delivery:

Marijana’s Journey and Experiences with the Netfira Platform

Marijana, Head of Delivery at Netfira, had been working at a Netfira customer and been a key user of the Netfira Platform for more than two years before joining Netfira’s delivery team in 2020.

In this video, she talks about her experiences with the Netfira Platform on the customer side, shares her perspective on document automation and digital transformation, and gives valuable tips for a successful software solution selection and implementation.

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January 9, 2025
Automate to Innovate: Automating Incoming Goods in Pharmaceutical Procurement

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Automate to Innovate: Automating Incoming Goods in Pharmaceutical Procurement

Following our previous discussion in “Unpacking the Complex World of Pharmaceutical Procurement,” this piece explores the transformative impact of automation on pharmaceutical procurement. We delve into how automating the handling of incoming goods is not just a solution to current challenges but a significant step towards innovative procurement processes in the pharmaceutical industry.

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Revisiting the Main Pharmaceutical Procurement Challenges

Pharmaceutical procurement, especially concerning hazardous or critical goods, demands stringent adherence to quality and safety standards. Like in other industries, such as the chemicals and materials industry or the engineering and manufacturing sector, this necessitates detailed information and documentation management and processing of various documents, including certificates, delivery notes, and goods records. Due to these distinct characteristics and requirements of pharmaceutical procurement, procurement managers are confronted with significant challenges: efficiently managing vast information databases, swiftly processing critical documents, overcoming the hurdles of manual data entry, and time-consuming data archiving, all of which divert focus from other tasks.

Pharmaceutical Procurement Automation: Why Pharma Procurement Needs Transformation

Over the last few years, the expectations placed on pharma procurement departments to meet requirements and quality standards while controlling costs and managing volatile supply chains have risen and are expected to rise further. These teams face a dual challenge: driving value creation and innovation while ensuring transparent and stable processes. Unfortunately, manual tasks often hinder their efficiency. To remain agile and future-ready, transforming pharmaceutical procurement through automation is not just beneficial but essential.

Reasons for Automating Incoming Goods

In pharmaceutical procurement, it is essential for procurement teams to plan ahead and maintain stable, uninterrupted workflows. The daily influx of raw materials, medical products, ampoules, and packaging necessitates well-organised and clear documentation. Automating these processes not only alleviates the burden on procurement teams but also enhances speed and accuracy. This automation extends to the processing of certificates and delivery notes, ensuring a seamless integration into the procurement system.

Automating Certificates and Delivery Notes in Pharmaceutical Procurement

In pharmaceutical procurement, hazardous goods are sent with a certificate. As these goods are mostly shipped in batches, each batch is delivered with a certificate. Consequently, when one order is delivered in 20 batches, 20 certificates need to be processed. Processing these certificates and delivery notes manually not only increases workload but is prone to errors.

Automated processing of delivery notes enhances the efficiency of incoming goods management, allowing for advanced knowledge of batch details and necessary storage conditions. This comprehensive automation ensures that procurement teams have access to vital information, facilitating informed decision-making and swift response to changes.

The Benefits of Automated Archiving

Document archiving, a critical component of the pharmaceutical P2P process, can be a daunting and monotonous task, if performed manually. Implementing automation solutions transforms this essential function by enabling rapid and accurate archiving of vital documents like certificates and records. Automated extraction, processing, and archiving of information ensure that documents are always readily accessible, significantly boosting efficiency and reliability in the procurement process.

The Benefits of Automating Incoming Goods and Archiving

Automating incoming goods and archiving offers numerous benefits to overcome challenges of pharmaceutical procurement. It minimises manual labor, significantly saving time and reducing errors. This shift allows staff to allocate their focus to other critical areas. Automated processes ensure streamlined operations, enhanced data quality, and consistent transparency, with reliable information readily available. The resulting structured data empowers teams to make informed decisions, plan, react to unforeseen changes, adapt to requirements and adhere to quality standards.

Choosing Wisely: Finding the Perfect Automation Software for Pharmaceutical Procurement Automation

For pharmaceutical procurement automation to be successful, it is vital to choose the right automation solution. When automating incoming goods and document processing, choosing a sophisticated, intelligent automation solution is paramount. Cloud-based Intelligent Document Processing (IDP) platforms, such as the Netfira Platform, are adept at accurately extracting and validating data from documents, thus ensuring high-quality data. Further, integration with existing systems, like ERP and CRM, is essential for seamless data flow and efficient archiving. On top of that, the scalability of cloud-based IDP solutions allows for the expansion of automation to other areas like invoice processing, further enhancing the procurement process.

Pharmaceutical Procurement Automation: Automating Incoming Goods Processes

The automation of incoming goods is a cornerstone of pharmaceutical procurement automation. By automating the processing of documents such as certificates and delivery notes, pharmaceutical procurement teams are relieved of time-consuming and error-prone manual activities. This automation facilitates faster and more efficient workflows, significantly enhancing decision-making and planning capabilities. Advanced Intelligent Document Processing solutions, such as the Netfira Platform, are exceptionally equipped to meet the rigorous demands of pharmaceutical procurement. Thanks to their extraordinary precision in data extraction and validation, they provide the necessary data quality, process stability and transparency to make procurement in the pharmaceutical industry competitive and future-proof.

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January 19, 2024
Unpacking the Complex World of Pharmaceutical Procurement

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Unpacking the Complex World of Pharmaceutical Procurement

In the pharmaceutical industry, procurement plays an increasingly important role. At the same time, pharmaceutical procurement teams are faced with a variety of challenges. This blog post delves into the intricate world of pharmaceutical procurement, highlighting its pivotal role and outlining the major hurdles encountered in the process. Discover how technological enhancements, particularly in automation, are revolutionsing this field.

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Pharmaceutical Procurement Unveiled  

Pharmaceutical procurement is the process of acquiring pharmaceuticals and medical devices by a company or organisation. It encompasses the identification of needs, evaluation of options, supplier selection, contract negotiations, and product delivery, demanding resources like medical expertise, technology, and robust infrastructure.

The Pillars of Procurement in Pharmaceuticals

Pharmaceutical procurement can be divided into three categories: direct procurement, indirect procurement, and contract procurement. 

Direct Procurement

Involves purchasing directly from a single source, often under bulk or military contracts.

Indirect Procurement

Entails buying from multiple sources, useful for creating custom pharmaceutical blends.

Contract Procurement

Outsourcing procurement to a third party, often utilised for exploring new product options.

The Significance of Procurement in the Pharma Industry

In an industry where innovation and cost control are paramount, procurement is increasingly recognised as a critical driver. Procurement teams are being seen as value creators, contributing to innovation and collaboration, and taking centre stage in strategic planning and management. 

Pharma companies are focusing on transforming procurement by aligning procurement objectives with wider business areas to enable growth and cost reduction, establishing a preferred supplier programme to integrate suppliers, and leveraging technologies to facilitate better decision making.

Pharma’s Unique P2P Dynamics 

The end use of procured goods by patients adds layers of complexity to the pharmaceutical P2P process, necessitating stringent quality standards and compliance with numerous regulations.

Supplier Relations

Compared to other industries, like mechanical engineering or construction, pharmaceutical companies tend to work with less suppliers. Many collaborate with only a few big suppliers as stringent quality and supply chain transparency requirements make supplier selection a meticulous and vital process.

Navigating the Procurement of Dangerous Goods

Handling dangerous substances is an inherent part of pharmaceutical procurement. Those dangerous goods, potentially lethal substances and medications along with ampoules, other items and packages often come in batches. These batches must meet strict requirements and standards to make sure that only safe medication is procured and sold. As a result, transparency, reliability, and clean data on the procured goods are at the heart of a functioning P2P process in pharmaceuticals.

Overcoming Pharmaceutical Procurement Challenges

The challenges in pharmaceutical procurement are manifold, but with the integration of intelligent automation technologies, these hurdles can be transformed into opportunities for efficiency, innovation, and safety.

Data Management

A key challenge lies in gathering and storing vast amounts of information, which must be readily accessible when needed. This includes data from certificates, documentation, information about raw materials, and risk assessments. Crucial documents in the pharmaceutical P2P process, such as certificates, delivery notes, and documentation of incoming goods, often in multiple batches, as well as sample documentation, must be meticulously managed.

Document Processing

Swift and efficient document processing is essential to maintain flexibility and agility. Implementing operational processes that ensure both transparency and stability, while also allowing for planning and adaptation to unforeseen changes, is vital.

Data Quality

Teams often grapple with manual data entry, where even minor details on certificates, orders, and other documents can significantly impact workflows. Thus, data quality becomes paramount. Utilising automated data entry solutions can help minimise human error, enhancing accuracy.

Archiving

In pharmaceutical procurement, archiving data is crucial but can be extremely time-consuming when performed manually. As a result, procurement teams may find their time for other tasks limited. Adopting cloud-based storage solutions can offer a secure and accessible means to improve the archiving process.

Discover in our blog article “Automate to Innovate: Automating Incoming Goods in Pharmaceutical Procurement” how automation helps procurement teams in the pharmaceutical industry to overcome challenges and to make their operational processes reliable, transparent and efficient.  

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January 19, 2024
Navigating Procurement’s Future with Intelligent Document Processing 

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Navigating Procurement’s Future with Intelligent Document Processing 

In today’s business landscape, efficient document processing provides a reliable foundation for business operations and underpins future growth. The global challenges faced by businesses in recent years have demonstrated that manual processing methods cannot cope when volumes rise or complexities increase. Simple automation solutions only address part of the issue, automating segments of workflows but failing to grasp the business logic unique to each transaction. What if there was an intelligent solution that doesn’t just automate, but truly understands and adapts to the logic of your documents? A complete tool that can automate documents with 100% accuracy, ensuring reliable operations through customisable workflows and informing decision making through accurate data? Discover how Intelligent Document Processing helps you grow with confidence.  

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Limitations of Traditional Document Processing  

Manual document comprehension and data entry, once the traditional norm, are now becoming untenable. Procurement teams spend valuable hours reading documents, cross-verifying data, and keying information into systems. This process is not only time-consuming and prone to human error, but also severely limits transparency.

Traditional automation solutions may assist with data capture, but they falter when faced with complex or unstructured document formats and supplier-specific business rules. The result? Incomplete automation of document workflows that isn’t reliable enough to enable downstream business outcomes. Moreover, many automation tools have long implementation times and are heavily reliant on IT resources. These limitations don’t just hamper procurement operations, they have a ripple effect that impacts everything from inventory management to supplier relationships, and ultimately the business’s ability to grow and scale efficiently. 

As businesses scale, so must their document processing capabilities. The goal is a future-proof solution that ensures accurate, efficient, and transparent operations, no matter the document volume. 

The Potential of Intelligent Document Processing: Orchestrating Procurement 

Intelligent Document Processing (IDP) promises to revolutionise procurement, eliminating the challenges that plague manual processes and traditional automation. The distinguishing feature of IDP lies in its ability to go beyond automating isolated tasks and orchestrate entire workflows. Orchestration in IDP takes automation to the next level. While automation handles routine tasks, orchestration manages the flow of multiple tasks, making intelligent decisions based on context and rules. It ensures seamless, error-free operations, even in complex environments involving unstructured documents and varying formats. 

The Netfira Platform exemplifies the power of orchestration. Its processing capabilities, combined with inbuilt business logic—such as tolerances, data enrichment, data manipulation, and validation—elevate it from mere automation to complete workflow orchestration. 

To illustrate the benefit of IDP, consider the processing of order confirmations—a document type that typically varies in structure across suppliers. In a simple automation scenario, the system might correctly capture line items, but cannot handle variable attributes like units of measure or currency. However, with Netfira’s orchestration, the Platform understands the specific business context, identifies, and correctly maps these elements, enhancing data accuracy and reducing discrepancies. 

Document processing workflow with the Netfira Platform

Unlocking Efficiency with the Power of Intelligent Document Processing 

IDP provides enhanced control over data, improves transparency, and integrates seamlessly with downstream systems—features that are integral to successful procurement operations. Furthermore, IDP like Netfira’s offers another significant advantage—handling exceptions and edge cases. Traditional automation systems might stumble over exceptions, necessitating manual intervention. In contrast, Netfira’s Platform not only ensures a much lower rate of exceptions and errors but also flags these rare occurrences. When an exception or an edge case arises, Netfira empowers the user to resolve them effectively via a state-of-the-art user interface. This capability ensures business continuity, boosts operational resilience, and reduces dependencies on manual intervention or IT support. 

Error handling and exception management with the Netfira Platform

The Netfira Difference

The Netfira Platform extracts any attribute from any document type or format with 100% accuracy and integrates seamlessly with any downstream system, promising efficiency, and transparency in operations. The implementation of Netfira is straightforward, requires no additional effort for your business partners or change to their existing processes.

”There was no need to coordinate any process changes with our suppliers. Documents are simply sent to us via email and Netfira handles the rest” – Oliver Merle, Syntegon Technology GmbH.

However, Netfira isn’t just a platform; it’s your trusted partner in your digitisation journey. It goes beyond solving problems to providing robust support and ongoing improvements to its platform, ensuring your operations remain at the forefront of procurement technology. The promise of continuous innovation and robust, German-based customer support underscores Netfira’s commitment and its dedication to its customers .

Intelligent Document Processing with the Netfira Platform

The Future of Procurement with Netfira 

Digitisation is integral to the dynamic future of procurement. IDP is not a luxury but a necessity, a key driver in overcoming procurement challenges and maximising efficiency. As a leading player in the IDP landscape, Netfira is committed to empowering businesses to enhance their procurement efficiency and scale their operations. Netfira stands as a passionate expert in the field, partnering with businesses to navigate the complex terrain of procurement. By embracing Netfira and the power of Intelligent Document Processing, businesses can ensure their procurement operations are not just ready for the future but are shaping it. 

Case study: Global purchasing automation at Syntegon

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November 20, 2023
How Automation Technology Empowers the Procurement of the Future

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How Automation Technology Empowers the Procurement of the Future

In our last blog post, we looked at five trends which are currently redefining the procurement landscape. In this article, we delve into the future of procurement, exploring how automation technology will reshape this critical business function. The procurement sector stands at the cusp of an exciting future, marked by innovation, digitalisation, and a strategic focus on value creation. The function of procurement will extend beyond transactional activities to become a strategic business partner as well as an influential driver of competitive advantage and business growth. What role will automation technology play in this development? How will sophisticated automation solutions shape the future of procurement and empower procurement to meet emerging requirements and exploit new opportunities?

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 The Future of Procurement: New Requirements and Chances

Risk mitigation, sustainability, ethics, and innovative partnerships are key factors poised to shape the future of the procurement sector. In a volatile, uncertain, complex, and ambiguous world, effective risk management will be more crucial than ever. Future procurement strategies will need to be resilient, agile, adaptable, capable of mitigating risks and capitalising on opportunities in a fluctuating global environment. As ESG factors will be even more prominent, procurement strategies will need to fully integrate sustainability. This will involve assessing suppliers’ ESG performance, prioritising sustainable sourcing, and contributing to the organisation’s overall sustainability goals. Ethical considerations in procurement will have gained more prominence in the future. This involves ensuring fair trade, preventing corruption, and promoting diversity and inclusion in the supply chain. Moreover, the future of procurement will see a shift towards more collaborative and innovative supplier relationships. By leveraging suppliers’ expertise and innovation capabilities, procurement will drive value creation and competitive advantage for the organisation. 

Automation Technology Defines the Procurement of the Future

Document processing is the backbone of all procurement processes. The efficiency and accuracy of document processing are central to the overall resilience and effectiveness of the procurement processThe question of whether data from documents is extracted and processed correctly is crucial, because data quality in procurement significantly affects downstream processes within an organisation and the supply chain.

Automation technology is the means to meet all the environmental, social, ethical and economic requirements mentioned above and to successfully transform procurement and its role along the supply chain. Automation technology will empower the procurement of the future. It will define how procurement professionals will work and how procurement processes will look like as it will enhance operational efficiency, reduce manual activities and therefore errors, and enable a more strategic use of human resources.

These Automation Technologies Will Shape Procurement in the Future

Artificial Intelligence

Through artificial intelligence (AI), software solutions are equipped with intellectual capacities by mirroring human abilities like reasoning and learning from past experiences. AI-driven automation tools can learn and improve with every data set they process. They remember and identify rules and patterns and get more precise over time.

By relying on AI-powered automation solutions, procurement will be able to unlock efficiency in its B2B document processing. Documents such as purchase order confirmations, customer orders or invoices can be processed quickly without any manual workload and the highest data accuracy.

Human-in-the-Loop Automation

Human-in-the-loop (HITL) automation refers to automated systems that integrate and enable human judgement. HITL automation solutions harness the power of AI and automation, for they combine the speed and accuracy of machines with human intuition and critical thinking. In the training phase of AI models, HITL automation plays a central role. The HITL approach enables AI to gain experience through constant access to data and refining human feedback, thus making it more accurate over time. 

HITL automation will be indispensable for all document processing activities. Processing B2B documents automatically, involves tasks like data extraction, document classification, the interpretation of information, the comparison of data, the definition of tolerances and the handling of exceptions or deviations. Human-in-the-loop automation technology allows humans to intervene in situations where critical thinking, interpretation skills and human judgement are needed. As a result, buyers are always in control of all automated workflows and only support the automatic document processing process when their expertise is truly needed.

Intelligent Document Processing and Orchestration

Intelligent Document Processing leverages cutting-edge technologies to set new benchmarks in automation.By combining artificial intelligence, machine learning and natural language processing, IDP mimics human abilities to identify, contextualise, interpret and process documents. As a result, IDP solutions can convert unstructured data of B2B documents into structured and actionable data.

Orchestration plays a central role in Intelligent Document Processing. By relying on orchestration, IDP takes automation to the next level as it goes beyond the automation of single and independent tasks. With orchestration, several different automated tasks are coordinated into a seamless and unified workflow.

By harnessing the potential of IDP and orchestration, procurement will be able to transform its operational processes significantly. Thanks to orchestration, the procurement of the future will benefit from complete automation and move beyond the constraints of basic automation. In document processing, this is particularly valuable when it comes to managing edge cases, errors and exceptions or regarding the processing and matching of data from various document sets such as purchase orders and order confirmations.

Automation Technology is the Key to the Procurement of the Future

Automation technology will empower the procurement of the future. Advanced automation solutions will streamline the entire data extraction, comparison, and validation processes, making manual tasks obsolete. By automating B2B document processing with intelligent automation solutions which harness the power of AI, human-in-the-loop automation and orchestration, non-value-adding, time-consuming and error-prone manual tasks will become a thing of the past. As the procurement process will be streamlined, made more resilient and agile, procurement will transform into a reliable strategic business partner and value creation driver.

Whitepaper: Unlocking efficiency in procurement with IDP

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September 1, 2023
Procurement Whitepaper: Unlocking Efficiency in B2B Document Processing

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Beyond automation: Unlocking Efficiency in B2B Document Processing

In an increasingly interconnected and fast-paced business environment, the ability to process and manage a plethora of documents efficiently is not just a desirable trait but a critical necessity. From invoices and purchase orders to contracts and delivery notes, the sheer volume and diversity of documents that businesses handle are staggering. This whitepaper aims to provide insights into the challenges that businesses face in document processing, especially in a B2B context, and how emerging technologies can transform this critical function. As you delve into this paper, ask yourself: How is my business tackling the inherent complexities of document processing? Are traditional automation solutions meeting the evolving demands? What can Intelligent Document Processing offer that can improve my operations?

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July 13, 2023
Intelligent implementation strategy to maximise ROI of automation projects

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Intelligent implementation strategy to maximise ROI of automation projects

For procurement, automating operational processes relieves buyers and downstream departments of manual work. Relying on document processing tools is indispensable but finding the right solution and approach for a simple and effective automation project can be challenging. At Netfira, we are passionate about automating document flows and always try to find innovative ways to ensure our customers have a smooth implementation. We understand that each business faces unique challenges. However, while businesses, processes and people are always unique, there are certain trends that we have identified after years of analysis. One of these trends allows businesses to maximise return on investment (ROI) by prioritising key suppliers when undertaking an automation project.  

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Speeding up ROI makes automation projects more feasible

Automation projects in procurement can be daunting. First of all, the process of selecting a software provider and choosing a software solution can be time-consuming and complex. Checklists for defining software requirements as well as software selection checklists can be useful to support and speed up the process. Secondly, it can be a lot of work to convince key stakeholders of the solution and of the benefits for procurement and the entire organisation. Thirdly, it is often hard to get the budget for the automation project guaranteed. However, having a clear roadmap for the automation project as well as an approach to achieve immediate ROI helps to make projects more feasible.

Massive operational efficiency gains through automating key suppliers  

Having analysed the flow of documents between thousands of B2B connections, we were able to identify trends that help us ensure our business partners’ automation projects are effective. Unsurprisingly, most purchasing departments receive around 60-65% of documents from their 35-45 biggest suppliers. As a result, electronically connecting the key suppliers and automating the document exchange leads to massive operational efficiency gains and a rapid ROI.

EDI for supplier connection does not work for all companies

Some companies use EDI technology to electronically connect their business partners. However, the complexity and cost of this technology limits the number of suppliers whose transactions can be automated this way. Onboarding is typically laborious and disruptive; in-house IT needs to be involved and EDI projects are time-consuming and costly to set up. On top of that, classic EDI solutions cannot be used for non-SAP systems. Since the implementation of EDI solutions is lengthy and complicated, procurement teams benefit from relying on alternatives to EDI.

Time as a vital resource

Time is an essential resource for every company and in every automation project. Achieving a quick ROI in document automation projects by automating key suppliers means gaining valuable time. By connecting the top 30-40 suppliers and automating the flow of documents and data, procurement teams’ workload can be reduced by more than 50%. Because of the reduction of manual activities, buyers have more time to focus on strategic and value- adding tasks. To further benefit from time savings, procurement should rely on digital automation tools that facilitate a quick and uncomplicated supplier connection.

A complete automation solution is the goal

Of course, ultimately a complete solution is the goal. However, the insights gained from having analysed document flows between thousands of B2B connections have a profound impact on how we advise businesses to approach their automation activities.

Automation projects in procurement: The traditional method

Software solutions for automating operational procurement processes are typically rigid. The implementation requires the full range of functions to be set up from the outset and, as a result, the software lacks flexibility and offers functions users do not need.

Setting up the entire solution, as a lot of companies do, means a very long project and implementation time. As a result, resources are tied up in lengthy processes and it takes months until procurement can start to use the automation software and ultimately benefit from it.  

Process automation and digitised information exchange rely on the electronic connection of suppliers and other business partners. Rigid solutions require companies to onboard all their suppliers at once. However, it might not always be possible or beneficial to connect all suppliers right from the beginning. The process of onboarding all business partners prior to the go live is time-consuming, error-prone and an inefficient use of resources.

Maximise ROI through automating key suppliers

With the approach based on our insights, by contrast, procurement teams can automate their key suppliers by volume quickly and easily. Given the fact that 30-40 suppliers often account for 60 or more percent of document volume, focusing on automating the top suppliers means gaining massive operational efficiency and a fast ROI. Once the initial ROI is achieved, users can scale the application and continue to automate the remaining suppliers over time.

Benefits of a SaaS solution

SaaS solutions operated in the cloud enable procurement teams to realise a quick ROI by first automating the most important suppliers before connecting and automating the remaining suppliers and document flows step by step. SaaS solutions are flexible, cost-effective and easy to scale. Modular end-to-end solutions can be deployed in a matter of weeks. Implementing a ready-to-use cloud solution adds value right away and helps to avoid costly delays by long-running projects. Moreover, modular solutions can be deployed and customised for specific project requirements and business needs. Choosing a comprehensive SaaS solution allows users to add functionality over time as they need it and ultimately automate all their business partners and all document flows.

The Netfira approach: maximise ROI through automated key suppliers  

Our focus is on helping our clients automate their workflows. Netfira not only offers a complete, end-to-end and scalable solution with in-depth functionality that has been designed to provide broad capabilities for many business needs, but also constantly explores ways how it can be implemented more efficiently. In this way, Netfira is your automation partner. We want our customers to succeed and strive to help businesses find the right approach to their automation project. That is why we suggest focusing on automating top suppliers first, allowing clients to benefit from the efficiency gained while they onboard the remaining suppliers.

Whitepaper: Document automation along the P2P process

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Whitepaper: Dokumentenauto-matisierung entlang des P2P-Prozesses

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March 8, 2023
Digitisation vs. automation: Why purchasing should automate and not simply digitise its processes

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Digitisation vs. automation: Why purchasing should automate and not simply digitise its processes

Digitisation and automation have increasingly become disruptors in today’s industry. As a result, a new technological age, which many consider to be the 4th industrial revolution, has dawned. Industry leaders refer to this development as Industry 4.0. This trend has been mirrored in purchasing through the development of Procurement 4.0. But what is the difference between digitisation and automation? And why is it not enough for purchasing to simply digitise its processes? Find out how high degrees of automation can be achieved through automated document processing with the Netfira Platform.

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Industry 4.0 and Procurement 4.0

Industry 4.0 refers to the progressive digitisation of industrial production and the intelligent networking of machines, systems and processes. The 4th industrial revolution and digital transformation are important for purchasing teams. Based on the term Industry 4.0, experts frequently refer to Procurement 4.0 to describe procurement’s new role and function. The increasing complexity of digitised business processes and the resulting data volume require intelligent approaches. Cutting-edge technologies like advanced robotics, Internet of Things (IoT), Blockchain, Artificial Intelligence and cloud computing fuel Procurement 4.0 and have a transformative impact on purchasing and supply chains.

What is digitisation?

Digitisation describes converting non-digital information, like a hard copy, into digital data. For example, digitisation means turning printed communications into electronic mail (e-mail) or converting hand-drawn schematics into CAD (computer-aided design) drawings. In purchasing, digitisation is often the first step towards automation as information needs to be available digitally to any automation technology before it can be automated. Initially, digitisation meant the conversion of analog formats into digital data to be processed with the aid of computers. Today, digitisation also means the digital networking of processes and products in real-time with the growing size and complexity of data structures. 

What is automation?

Automation, on the other hand, improves processes that are already digital. It relies on a series of rules to accomplish tasks without human intervention. Automation means using information technology or machines to take on repetitive processes and tasks while freeing humans to do other tasks.

Digitisation vs. automation: Digitisation as a first step towards automation in purchasing

The digital exchange of data and B2B documents needs to work automatically to make purchasing more efficient and future-proof. The digitisation of information is a crucial but not sufficient step towards achieving real automation.

Even today, many purchasing departments still rely on paper-based processes and manual data entry and comparison. Optical Character Recognition (OCR)  is one method of making data available for digital use. The technology converts documents into a digital format by scanning and digitising information from printed documents, images or handwritten text. However, it lacks the data quality, flexibility and reliability of more sophisticated technologies. Moreover, OCR is highly limited in its use and error-prone, which can increase manual workload, preventing true automation. 

Electronic Data Interchange (EDI) does not focus on text recognition because, in the EDI process, data is readily available in digital form. Instead, EDI describes an interface for data exchange between two ERP systems. Companies adopting this complex technology face long implementation times, non-compliance from supplies and other barriers that prevent fully automated B2B workflows.

Automation in procurement: More than just intelligent data extraction

Automatically extracting data from procurement documents with a software solution is not enough for companies to achieve automation and noticeable relief. Intelligent data extraction can help businesses digitise their processes. Automation, however, requires automation tools to not only extract but also understand, compare and validate data. This level of automation means users only need to be involved when discrepancies occur and action is required.

How the Netfira Platform achieves a high degree of automation in purchasing

Automating the processing of documents does not just mean extracting information like price, quantity, delivery date etc. from a document and exporting it into downstream systems. True automation occurs when purchasing can automatically process previously defined deviations between B2B documents. For example, the Netfira Platform automatically processes pre-defined deviations between purchase orders and purchase order confirmations. This applies when purchasing requests an order to be delivered on a fixed date, but the supplier confirms a calendar week. If purchasing cannot process these deviances, true automation cannot be achieved because buyers will face many discrepancies that they must process manually.

Automated processing of order confirmations with the Netfira Platform

The Netfira Platform achieves an unprecedented degree of automation because it reduces manual activities and the need for human intervention to a minimum. How it works can be demonstrated through the automatic processing of order confirmations. The platform automatically extracts data from transactional emails, for example, and compares it with the purchase order. If the confirmation matches the order, the information is automatically entered in the buyer’s ERP or downstream system. The Netfira Platform allows organisations to achieve nearly 100% automatic processing of order confirmations where there is no deviation. On the other hand, deviations can be identified quickly and easily in the familiar ERP environment. The platform directs the buyer to parameters that need to be checked. The structured and standardised process for handling deviations saves the purchasing department time and reduces stress in the approval process.

Digitisation vs. automation: Automate and not just digitise operational procurement

Simply digitising the data and document exchange is not enough to achieve noticeable benefits. Buyers need to be relieved of manual activities to save costs, time and resources. True process optimisation can only be achieved by fully automating purchasing processes. Moreover, simply extracting data with a digital automation tool is not enough to enable automation. High degrees of automation can only be reached if the software solution understands, compares and validates the data based on pre-defined specifications. Only then the need for human intervention and corrections can be reduced to a minimum. If purchasing smartly combines the potentials of digitisation and automation, it can meet the requirements of Purchasing 4.0.

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March 11, 2022
The challenge with processing unstructured order confirmations

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The challenge with processing unstructured order confirmations

The challenge with processing unstructured order confirmations is nothing new. Every day, purchasing departments are met with a flood of these documents and tasked with the manual process of entering this important but often unstructured information into their purchasing system. To make matters worse, the COVID-19 pandemic has worsened the global shipping crisis and caused global delays to orders.

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In procurement, the pressure caused by this supply chain disruption has manifested itself through a backlog of order confirmations that need to be processed. Procurement managers are reporting a dramatic increase in purchase order confirmations as the ongoing disruption is forcing suppliers to provide multiple order confirmations for each purchase order. Not only are the volume of order confirmations increasing, but also the number of discrepancies and variances that require action. The need for business leaders to future-proof their processes against disruption in an uncertain and interconnected world comes into focus. Purchasing needs to implement intelligent solutions enabling automated processing of order confirmations to mitigate risk, handle discrepancies and improve supplier relations.

Purchase order, purchase order confirmation and invoice – what is the difference?

Purchase orders, purchase order confirmations and invoices are central documents in procurement which need to be processed on a daily basis. They serve different functions and play an integral role in the B2B communication as they provide better visibility into the purchasing processes, include basic order details and provide a legal basis.

The difference between structured and unstructured documents

Documents like purchase orders and invoices are classified as semi-structured or structured documents. While there are several styles of invoices, for the most part they all contain the same information such as company name, address and phone number, invoice number, due dates, line items, total amount due etc. Moreover, information is assigned to certain columns and positions in a clearly structured way. That is why OCR software is often used to digitally capture the information on invoices. The same holds true for purchase orders. These documents specify the quantity, quality, unit and total price of goods or services that suppliers must provide. They also state the general terms and conditions such as delivery terms, price, payment terms, payment means etc. Because of the structured nature of invoices and purchase orders, these documents are relatively straightforward and easy to process – either manually or automatically. Purchase order confirmations, on the other hand, are unstructured documents. What kind of information and how it is confirmed mainly depends on the supplier creating and sending the document.

The challenge with processing unstructured order confirmations

For purchasing, checking, comparing and processing incoming purchase order confirmations has always meant laborious and error-prone manual work. The greatest challenge with order confirmations certainly lies in its unstructured nature. In contrast to invoices and purchase orders, for example, purchase order confirmations are unstructured documents. Unstructured means that the supplier confirms specific components as they see fit. Therefore, it often happens that order confirmations from different suppliers have a different structure. For instance, this can apply to the delivery date. On order confirmations, there can be a desired delivery date and an actual delivery date. The information is considered structured if data is contained neatly within its designated column. However, information often bleeds into the column next to it. The challenge here is to find out which information is the desired delivery date and which is the actual delivery date. This lack of structure increases the manual workload for procurement teams significantly. Therefore, digital automation solutions which are capable of processing this kind of unstructured data reliably and quickly come more and more into focus.

The challenge with too many order confirmations

Recent events have made comparing and processing all incoming order confirmations a near on impossible task for many procurement teams. Due to unforeseen changes and supply bottlenecks, many suppliers are forced to generate and send a new purchase order confirmation to the buyer whenever a detail of the order changes. Consequently, the buyer receives up to ten order confirmations for one purchase order which he or she must check each time. Thus, the non-transparent and unstable supply chain directly affects operational procurement. COVID-19 has revealed and intensified the fragility of complex global supply chains with existing or impending supply bottlenecks drastically increasing the volume and inconsistency of purchase order confirmations which need to be processed.

The benefits of automating unstructured order confirmations

Given the increase in documents and evidence that uncertainty is here to stay, procurement urgently needs to automate the processing of purchase order confirmations with intelligent digital solutions which reliably process unstructured documents. Buyers can benefit immensely from automated processes and workflows which relieve them of time consuming, error prone and mentally draining tasks. Moreover, automated order confirmations make purchasing more efficient by increasing productivity, reducing errors and freeing up more time for value-adding activities. Buyers do not need to input data manually and repeatedly anymore. Automated order confirmations facilitate better production planning thanks to smart platform solutions that can identify delivery volume discrepancies and potential delays right away and source other suppliers or adjust the planning as needed. This foresight enhances compliance and quality and allows for flexible risk management. On top of that, automated processes provide transparency of the supply chain and help spot discrepancies faster. Buyers are in control of the processes at all times and can react to unforeseen and spontaneous changes. Thus, smart automation solutions optimise and future-proof purchasing processes for present and future challenges.

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October 21, 2021
The global shipping crisis and procurement: Why automate purchase order confirmations?

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The global shipping crisis and procurement: why automate order confirmations?

The two-week closure of China’s Ningbo-Zhoushan Port south of Shanghai in August, following a dock worker’s positive test for COVID-19, has exacerbated the global shipping crisis. The pressures caused by this supply chain disruption have been relentless and, in procurement, it’s quickly being defined by significant delays and a subsequent backlog of purchase order confirmations that need to be processed. In Europe, businesses are reporting a dramatic increase in order confirmations as the ongoing disruption is forcing suppliers to provide multiple order confirmations for each purchase order. This challenge presents an opportunity for businesses to build long-term and sustainable resilience within their purchasing processes. By automating order confirmations with the Netfira Platform, businesses are able to ensure end-to-end transparency and allow employees to focus on value-adding tasks.

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Procurement and the uncertain new world

COVID-19 has caused unprecedented global disruption to businesses and consumers alike. The pandemic led to a drastic shift in consumer demand for certain goods. This demand was met with widespread lockdowns, causing many workers to remain at home, and has resulted in a massive shipping backlog and a global shortage of key materials and components. In May 2021, container ships were estimated to be spending an average of 33 hours anchored due to port congestion, up from only 8 hours in May 2019. This disruption has been felt by businesses across the globe, regardless of size. In September, for example, Toyota announced a 40% reduction in car manufacturing in light of a computer chip shortage. However, the pandemic alone is not to blame for the current global shipping crisis. In March 2021, a 400-meter-long container ship was blown off course by strong winds and caused a 6-day blockage of the Suez Canal, a vital passage linking Europe and Asia. The Suez Canal blockage is estimated to have cost $9 billion per day and highlights the need for business leaders to future-proof their processes against disruption in an uncertain and interconnected world.

What makes purchase order confirmations so important?

Purchase orders are legally binding contracts between the supplier and the buyer, but that legal protection is not valid until the purchase order confirmation is issued. If the purchase order is not confirmed and accepted by the supplier, it is not a contract. Moreover, without the purchase order confirmation, it is impossible to know whether or not a supplier actually received the order and is in the process of fulfillment. As soon as the supplier confirms the purchase order, the buyer receives a confirmation number by e-mail he or she can reference in the event that there is an issue with the order. Purchase order confirmations are also vital because the confirmed date will be taken into account when the system checks the material availability. Consequently, purchase order confirmations serve a legal as well as an operational function ensuring smooth procurement activities.

Why purchase orders and purchase order confirmations need to be compared

Documents that do not match perfectly represent different expectations for buyer and supplier and expose both to the risk of litigation. In addition, important details such as delivery dates are confirmed in a purchase order confirmation, making this transaction crucial to smooth business operations. Therefore, it is important that the buyer checks the confirmation against the purchase order, and contacts the business partner in case any discrepancy is found. 

Automated order confirmations in response to new challenges in an uncertain world

Manually processing, comparing and checking purchase order confirmations has always been time-consuming and error-prone. But with the COVID-19 pandemic exacerbating the global shipping crisis and leading to a significant shortage of materials, the workload has increased excessively. Buyers are confronted with an increasing backlog of purchase order confirmations. Today, it is not uncommon for up to 10 purchase order confirmations per purchase order to be generated due to changing situations and circumstances.

Supply chain disruptions mean businesses are receiving multiple order confirmations per purchase order

Whenever the price, quantity or delivery date changes because of unforeseen events or backlogs, a new purchase order confirmation must be created. The buyers, in turn, need to check and compare the new order confirmation against the purchase order. That is why purchasing needs to implement intelligent solutions allowing automated processing of order confirmations.

How the Netfira Platform automates purchase order confirmations

The Netfira Platform automates operational processes and the data and document exchange. For purchase order confirmations without deviances, the Netfira Platform offers fully automated processing thus completely erasing the need of manual work. In case the Platform finds a discrepancy, the system offers the buyers a guided standardised process. That way, buyers can process a high volume of order confirmations quickly, efficiently and correctly.

Future-proof processes through the automation of order confirmations

COVID-19, the shipping crisis, and the global shortage of key materials and components have significantly disrupted the supply chain. Purchasing must deal with an unprecedented level of uncertainty. Since uncertainty is inevitable and will always be a part of procurement managers’ lives, purchasing departments need to optimise and future-proof their operational processes to meet the challenges of an uncertain world and to deal with supply bottlenecks quickly and efficiently. By automating mundane work like processing purchase order confirmations, businesses can increase the reliability of their processes and achieve a competitive advantage. The Netfira Platform relieves buyers quickly and reliably, reduces manual workload and future-proofs procurement for present and future challenges.

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October 14, 2021