The supply chain is totally dependent on documentation. Whether that documentation is as simple as an e-commerce data stream or electronic data interchange, it is characterised by a flow of data moving from one party to the next.
Any supply chain, from the original manufacturer to the end-user, consists of a mass of documents that accompany each transaction. Without an efficient flow of those documents, the supply chain fails.
Examples of documents processed in the supply chain include order forms, invoices, proof-of-delivery (POD) notes and statements. From the collection of material for manufacture through to final payment by the end-user, each step of the process is dependent on documents of some sort.
The critical underlying factor is that the supply chain consists of many independent parties, from the supplier to the manufacturer, through the distributor, the retailer, and finally the consumer. Each of these needs documentary evidence of each step of the transaction.
Whether the documents are physical or electronic, there are underlying processes and procedures to be followed. The medium is relevant only as it impacts on speed, efficiency and cost.
The supply chain usually starts with a purchase order, which needs to be processed by a different party or department in the organisation. Once it arrives at the client, there must be evidence that the order has been received and signed for by the authorised person.
This is one of the biggest problems in the supply chain. The supplier must be able to prove the order has been signed for by the right person and that the goods received are the same as what was ordered.
The POD is the single most important document when it comes to the customer disputing or not paying for invoices. Almost every business in every industry has discovered, to their detriment, that it is most often used as a vehicle to delay payment.
There are at least three opportunities in the supply chain - from the manufacturer to the distributor to the wholesaler to the retailer -for PODs to be disputed.
Whatever companies can do to improve the process around this automatically improves cash flow, as it means invoices are paid timeously because there is less chance of disputes having to be resolved.
Technology an enabler
Compliance, from a document point of view, relates to adequate records management and control.
Paul Mullon, marketing director, Metrofile
One of the simplest ways to improve the process is by scanning and imaging documents. There is a caveat, however: while scanning helps, if the underlying processes are not sound, the problems don`t go away. Technology is simply an enabler. It can only improve and speed up the process, in many instances helping to ensure quicker payment and remove disputes.
Using technology, the typical process involves a signed delivery note being scanned in and then used for invoicing. Both documents can immediately be dispatched to the client electronically, allowing for earlier payment.
Alternatively, when an invoice is disputed, an electronic POD can be sent to the client via fax or e-mail to prove delivery was made and signed for and wasn`t disputed at the time and that, therefore, payment must be made.
Compare that to the old days, when companies had to first scour through filing cabinets to find the POD and then send it to the client via snail mail, fax or courier. Besides being faster and simpler, imaging cuts those communications and delivery costs as well.
In many instances, technology simplifies and improves the customer-supplier relationship, because of the reduced chance of disputes, and ensuring the customer receives the right goods he ordered, on time.
Efficient filing and indexing of documents reduces the amount of additional work that needs to be done, such as searching for POD documents, invoices or any other documentation that might have been lost were it in paper form.
It ensures information is immediately available to anyone in the organisation that could be involved in resolving a query, regardless of what department they are in or their geographical location.
Compliance, from a document point of view, relates to adequate records management and control. By identifying records that form part of the supply chain and ensuring they are captured adequately, companies can reduce or eliminate the chance of their being lost, altered or destroyed without authority, thus complying with regulatory requirements and the three elements of records risk management: authenticity, reliability and integrity.
At a base level, technology ensures the process identifies documents, captures them, stores them in such a way that they can be used and found when necessary, moved between the different players in the process as efficiently and cost-effectively as possible, stored for compliance reasons and retrieved when required either for business, tax or legal purposes, and then destroyed at the right time, either in terms of convenience or to meet regulatory requirements.
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