FFF Enterprises: How Procurement Enhancements in SAP Resulted in a Monthly Time Savings of 150+ Hours
Overview of FFF Enterprises, Inc.
FFF Enterprises, Inc. is a leading distributor of blood products, vaccines, and critical-care biopharmaceutical products in the US. After implementing SAP in 2017, FFF quickly outgrew its manual procurement and planning practices within two years.
With various demands from their sales teams and restrictions placed by vendors around order minimums, alternate units of measurement (UoMs), variable pricing structures, and multiple incentive programs, the organization battled to manage and monitor inventory.
The hidden cost of manual procurement
Procurement is a complex process that involves a number of different stages, from identifying the need for a product or service, to selecting a supplier, negotiating terms, and eventually, making a purchase. Along the way, there are a number of common challenges that procurement teams must navigate.
One of the biggest being the need to update procurement and planning practices to keep pace with changes in the marketplace. To remain competitive, FFF decided to invest in digital procurement software that could automate laborious tasks and improve efficiency of their workflows.
Another common procurement challenge is the reliance on manual and email-based processes, which can be time-consuming and error-prone. These processes also limit visibility into procurement data, making it difficult to track spend and identify opportunities for cost savings. In addition, many procurement teams are forced to rely on off-system analysis across numerous spreadsheets, which can be difficult to manage and maintain.
Other challenges include decision-making limitations, such as limited access to real-time data and a lack of visibility into supplier performance. Vendor reporting requirements can be particularly complex, especially when it comes to tracking compliance with regulations or contractual obligations. Constraints around ordering minimums, alternate UoMs, variable pricing, and incentive programs complicate procurement processes even further and make it difficult to compare pricing across suppliers.
On top of all of that lies cyber threats and data security risks to an organization's IT environment. As procurement processes become increasingly digital and interconnected, there is a need for procurement teams to work closely with IT departments to ensure that their systems are secure and that data is protected.
Common operational challenges
- Outgrown procurement and planning practices
- Manual and email based processes
- Significant off system analysis
- Challenging vendor reporting requirements
- Various vendor constraints
- Complexity and data security risks to the IT environment
Use cases: Automating procurement operations in SAP
Stock availability and visibility
Before automating procurement operations, checking and providing stock availability information was a manual process for FFF that required each item to be checked individually. This process was time-consuming, with each batch displayed one by one, and each batch information manually added to an email.
Through automation and SAP integration, the procurement team can now view current stock and batch information for multiple products and locations in one place, and even export the information to send in an email. This has resulted in a time-saving of approximately 15 hours per month across the entire team.
Purchase requisition and purchase order automation
Editing or deleting purchase requisitions used to be a laborious process - it required users to go into MD07 and individually adjust each material in every warehouse before switching over to ME58. Then they had the tedious task of manually dragging and dropping each request one-by-one for each purchase order (PO).
By enabling users to pick various items from different warehouses with just one display, FFF's procurement team can now add any purchase requisition to a PO. This ensures that users are no longer wasting time shuffling between programs, and resulted in an impressive 42+ hour monthly productivity increase.
UoM conversion automation
For purchasing in alternative UoMs, the team used to have to maintain conversions in Excel, which were gathered from multiple areas of SAP, taking about 1 hour to complete. This same process now takes about 15 minutes using automated UoM conversions. This has resulted in a time-saving of approximately 23 hours per month across the entire team.
Automated incentive tracker
The procurement team used to track purchasing incentives in an Excel spreadsheet queried by multiple sources between BI reports, SAP reports, etc. for weekly, monthly, and quarterly cumulative grams, IU’s, and EU’s.
This process was prone to errors due to the amount of manual intervention required to gather the data. Now, this is all contained within one click of a button, cutting down the process from roughly a 1-2 hour exercise to 10 minutes. This has resulted in a time-saving of approximately 18 hours per month across the entire team.
All in all, FFF's integration of automated procurement operations within SAP has made a massive difference. With automated stock availability and visibility, purchase requisition and order editing, UOM conversion, as well as incentive tracking, the procurement team has managed to save approximately 150 hours per month. Not only does this boost productivity but it also eliminates the errors that were typically associated with manual processes.
FFF's procurement team has experienced an average productivity boost of 150 hours every month since automating procurement operations:
- Transaction and report automation: 50 hours saved per month
- Purchase requisition and purchase order automation: 42 hours saved per month
- UoM conversion automation: 23 hours saved per month
- Automated incentive tracker: 18 hours saved per month
Optimizing warehouse operations
Return goods authorization (RGA) processing tool results in 56 hours of time saved annually
The warehouse inventory control team at FFF used to spend an exorbitant amount of time - 80 hours yearly - processing returns manually line-by-line. This system was both tedious and error-prone. After the introduction of the mass return goods authorization (RGA) processing tool, however, these problems were quickly resolved. With this automation process in place they now only need around 24 hours each year - a massive savings of 56 hours.
Enhanced weather modeling ensures FFF products don't spoil and customers save money
Previously, FFF was using the highest 5-day temperature forecast for packaging its products, which made shipments ineffective as fluctuations in weather weren't considered. To address this issue, FFF adjusted its system to factor in the estimated high temperature at the shipment's destination based on transport strategy (i.e. next-day air versus 3-day ground). Packages are now packed correctly and product spoilage is no longer a cause for concern.
Better compliance through the Wave Management dashboard
Initially, FFF didn't have exisiting controls in place to prevent the co-mingling of RFID required packages with non-RFID packages. This resulted in deliveries leaving the warehouse without RFID tags, which posed a risk to product safety and compliance. With the Wave Management dashboard, FFF was able to prevent the operator from creating a pick group that included both package types, resulting in better control over the entire process and improved compliance.
FFF Enterprises increases warehouse efficiency by 16% in 6 months
The utilization of digital procurement software resulted in a dramatic increase in efficiency for FFF's warehouses, boosting the average turns rate from 14.35 over the first six months of 2019 to an impressive 16.71 during the last half of the year, demonstrating a 16.4% increase. This marked improvement and cost savings fully validate that implementing digital transformation tools has been more than worth it for FFF Enterprises' operations as a whole.
Conclusion
Overall, FFF Enterprises has seen tremendous gains in efficiency, cost savings, and compliance through procurement automation and digital integration with SAP. Digital transformation tools, like the Wave Management dashboard, mass RGA processing tool, and advanced weather modeling, have created an environment that enables FFF to automate daily processes for its warehouse and procurement teams.
By incorporating an integrated system that provides unparalleled visibility and optimization of processes, FFF Enterprises has been able to remain ahead of its competition in terms of efficiency throughout the entire order-to-delivery process. The level of automation and visibility provided by their system has enabled FFF Enterprises to reach new levels of speed and transparency within their procurement operations.
