Spotlight on Direct Materials Procure-to-Pay

July 27, 2015 Katie McGinn

Consider the various systems involved in the end-to-end P2P cycle as shown in Figure 1. Feeding into the creation of the PO are both sourcing/contract management systems and demand management/ materials planning systems. Sourcing (which is not shown in Figure 1) is a whole world in itself, with lots of complexity, process, and systems. The ultimate outcome is a negotiated agreement to purchase, generally resulting in a contract. Ideally the information for creating the PO is extracted from the contract, RFQ, and supplier management systems.

Demand management systems are involved in creating the forecast, which drives the materials planning process. The output of MRP is a flow of material requests, from which POs are generated, thus feeding the P2P process.

Throughout the P2P process, various other enterprise systems are involved as well, especially ERP/financials, but also order management, production planning, quality, logistics (WMS, TMS, and visibility), global trade management, billing, and other systems that either feed into, receive from, or directly execute P2P process steps. 

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