CASE STUDY:
Streamlining the Purchase Order Process
The Challenge:
Transition to Centralized PO Process
Although the Finance policy required all purchases for third-party services to be via purchase orders, the ad sales and operations departments of a US cable operator negotiated fees directly with the suppliers and charged their respective market department codes for payment. Late payments to suppliers were frequent.
The Strategy:
Introduction to the Sourcing Process
Began working with the central management team to competitively bid all purchases greater than $150K/year for all new suppliers and structured blanket purchase orders to allocate supplier fees to the respective market department codes based on estimated consumption.
The Results:
Fewer Supplier Payment Delays Complaints
Third-party suppliers were paid within the negotiated payment interval, reducing supplier complaints. The business team now had a central process for suppliers to follow when submitting invoices and following up on payment status.