Online payments and virtual cards are set to further simplify processes and give buyers more choice.
Looking at Aggregate Industries, we hear from Gerard Cantwell, Director of Procurement and Logistics on how they're still giving a business the controls it needs.
The digital transformation journey for procurement at Aggregate Industries is well under way. As a manufacturer and supplier of construction and building materials, the Leicestershire-based business has a complex and wide-ranging supplier base. Over the past five years, adoption of an eProcurement suite, with built-in catalogue solutions and automation technologies for requisition and payments, has enabled the business to drive efficiencies right into the heart of its procurement operations.
Gerard says, “What we tried to achieve is ease of procurement for the user, while still giving ourselves the governance and commercial controls we require as a business. We’ve eliminated paper as much as possible to bring full visibility and cut down the noise and traffic between our suppliers and our business. That brings efficiency.”
The business also reduced its supplier base from 13,000 to 4,500 through a mixture of new technologies and category management. It’s a process that Gerard says allows procurement to build healthier supplier relationships from requisition right through to payments.
“The return is much better commercial arrangements in terms of costs, but also payables. These days we just never end up in disputes with suppliers on non-payments, because everything we do is through agreements rather than a blanket approach.”
While that may not always directly translate into better commercial deals, it can position Aggregate Industries as a preferred partner. Gerard says “We’re easier to do business with and we’re much more reliable. That’s partly because of the systems and the payables solution, as well as the relationship management piece.”
Though the company is a mature user of eProcurement solutions and automation, the journey of digital transformation for procurement is not over yet. Ease of use – and the benefits that come with it – are top of mind as the company takes on its next procurement challenge towards a wholly paperless purchase process and greater speed at the tail end of supply chain leads.
This is where online payment solutions and virtual cards could bring more leverage and commercial advantage, potentially through partnerships with Amazon Business and Barclaycard Precisionpay.
The advantages, Gerard says, will be to further reduce complexity, and give buyers more choice and advice on the buying options available – especially when there is no structured supply base already in place – while still providing the business with the financial controls it needs.
On top of that it will reduce the level of administration around payables. “We don’t want to spend an inordinate amount of time setting up a supplier on the system. That’s where it’s much easier for us to pay through a card and that’s where the tie with Barclaycard will come in,” he adds.
This is a key consideration when making decisions on which technologies to implement. It’s the total value that counts, rather than cost alone. Gerard explains “We look at ease of use, quality, reliability, sustainability, commercial attractiveness, value for money proposition and so on. I know they are easy words, but we take decisions on the total experience and cost of ownership rather than any single individual element. To be a long-term solution that’s going to stand the test of time, it has to tick all the boxes.”
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