Transforming the Source to Pay (S2P) Operating Model of a North American Manufacturer
We completed a successful Source to Pay (S2P) project for a leading North American industrial products manufacturer, in partnership with Argo Consulting.
Foundation to improve the S2P operating model
With a network of 100 + sites and a single ERP in place, the client faced several challenges in operating its S2P model, such as high operational costs, decentralized processes, and a lack of overall visibility.
Through a comprehensive Assessment phase, we pinpointed key improvement opportunities in their S2P Operating Model, focusing on People, Processes, Technology, and Governance. By analyzing their spending and understanding the nuances of their business processes, we conducted a Maturity Assessment and gap analysis. We also facilitated an S2P envisioning workshop to align the organization and enhance the Direct and Indirect Procurement processes.
This enabled us to define a detailed transformation roadmap for the S2P model, steering the organization towards long-term success.
Strategic Sourcing Transformation
One of the first initiatives that came out of the operating model assessment was a strategic sourcing review.
Using client data, we pinpointed areas with the greatest potential for benefit, then standardized, consolidated, and aggregated categories, vendors, and purchases accordingly.
By conducting a thorough analysis of sourcing strategy and fostering collaboration among key stakeholders, we are paving the way for remarkable results. We anticipate average savings of 15% (approximately 3 million CAD) in new supplier contracts for indirect spend categories—such as spare parts and packaging—over a three-year period. These savings result in more favorable terms and stronger supplier relationships, all while leveraging the current ERP infrastructure.
This project underscores our commitment to innovate and excel in strategic sourcing. The client was highly satisfied with the guidance provided and the project’s expedited payback.
Enhancing Efficiency in Operating Processes: A Client Success Story
Another initiative from the S2P roadmap was the successful S2P automation project. Again leveraging the current ERP infrastructure, we developed seamless, automated workflows for receipt and shipping processes to ensure near real-time transactions—even at sites where ERP access is limited by operational constraints.
This automation initiative is expected to eliminate manual and repetitive tasks, reduce errors, and significantly improve processing times. The results are transformative: beyond increased efficiency, faster cycle times, and improved accuracy, over 5,500 hours of non-value-added activities will be reallocated more strategically across the business each year.
Closing Remark
This project exemplifies our dedication to delivering innovative solutions that drive tangible improvements for our clients.
The client was thrilled with the clarity and direction provided, as well as the project’s rapid payback—all while leveraging existing ERP infrastructure.
If you’re interested in discovering how we can help your business thrive, feel free to connect with us on LinkedIn!
