A global Cruise Line company with multiple brands faced with limited resources post-pandemic was looking to improve the efficiency and effectiveness of their P2P processes in preparation for a full return to service. They hired OnDemand Professional Network member Alvin Wong to help them with two challenges: 1) to analyze, assess root-causes, and help address a backlog of unpaid supplier invoices, and 2) to develop a P2P roadmap to improve the process.
During the pandemic, an unintentional backlog of past-due invoices, changes in leadership, and the reduction of resources resulted in an urgent need for help to address issues and establish a “roadmap” to improve the organization’s P2P processes.
Although the predominant number of invoices were paid on time, there were hundreds of invoices past due over 60 days, with many over 120 days, the company was at risk of being cut-off by suppliers. The invoices were not past-due for a lack of company funds, but rather for validation and confirmation by purchasers before payment.
Something was failing in their P2P process and any findings were to be incorporated into a “roadmap” for a recommended P2P modernization plan.
Working with Finance, Sourcing, Technical Operations, and Supply Chain Procurement, we conducted a series of past-due invoice reviews, stakeholder interviews, and process and system mappings. Using the findings, we analyzed root-causes of the past-due invoice problems, implemented changes, and identified various opportunities to incorporate into a “roadmap” to improve P2P processes and systems.
CRITICAL SUCCESS FACTORS
- Fact-Based Data-Driven Analysis and Findings: Commit the time to smartly collect and analyze data first to avoid wasted efforts solutioning the wrong problems.
- Multi-Functional Collaboration: Persistent problems exist typically because no one department such as Operations, Supply Chain, or Finance is responsible for persistent issues. Understanding each group’s strategies, goals, and objectives provides the “why” the problem exists, as well as insights into “how” to move forward with a better solution.
- Stakeholder Involvement in Recommendations: In the end, recommendations must help solve stakeholder problems and be implementable by the stakeholders involved. Getting their feedback early helps identify potential obstacles to the implementation of recommendations.
The various bottlenecks and issues causing past-due invoices were found to include (but not limited to):
- Suppliers submitting invoices late
- Lack of approval responsibility tracking and accountability
- Poor visibility of metrics for timely action
- Multiple approval routing and communication methods
- Lack of integration across multiple systems
- Inadequate spreadsheet based status reports
Actions implemented to reduce past-due invoices by more than an estimated 30% include:
- Updated and communicated to suppliers new policies, processes, and procedures to hold suppliers accountable for late invoice submissions.
- Standardized internal routing and communication methods for stakeholder approvals.
- Defined and implemented metrics and tracking tools for timely invoice approvals.
- Leadership communication to purchasers of the urgency to prioritize invoice reviews.
The resulting P2P “roadmap” developed included the mapping, assessment, and recommendations for:
- P2P related systems used by the various brands in the company’s Business Group.
- P2P processes and payment methods across Supply Chain, Operations, and Finance.
- P2P related Organizational design and responsibilities for Planning, Sourcing, Procurement, Logistics, IT/Systems, and Payment.
- Opportunities to standardize and leverage capabilities with their Corporate parent and other Business Groups in areas such as Master Data, Contract Management, and Analytics.
MEET ALVIN WONG
OnDemand Professional Network Member Since 2019
Alvin has over 35 years of industry and consulting experience in the areas of Supply Chain & Logistics, Project Management, Operations, Data Analytics, Organizational and Process Design, Systems, and Implementations. He has strong analytical and solutions development skills and has worked successfully at all levels of an organization to build cross-functional relationships for pragmatic holistic solutions. Prior to embarking on an independent consulting career, Alvin was a Supply Chain consultant with both Accenture and Deloitte. He holds a BS in General Engineering from Harvey Mudd College, an MS in Mechanical Engineering from University of Southern California, and an MBA in Finance and Marketing from Loyola Marymount University.