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How SATS is streamlining procurement

Singapore-based supplier of ground handling and food services is deploying what it calls ‘touchless procurement’

Like many organisations hit by the Covid-19 pandemic, SATS has been accelerating its digital transformation efforts by automating processes and tapping data analytics to mitigate vulnerabilities in the global supply chain.

The Singapore-based supplier of ground handling and food services recently embarked on efforts to streamline procurement processes in what it calls “touchless procurement”.

“We don’t want to waste time trying to get someone to raise a purchase order,” said Alfred Aloysius, head of global sourcing and procurement at SATS. “Through our e-procurement system and a bunch of rules, once demand is put forward, it is authorised properly with a contract that flows through immediately without anyone having to touch it.”

Aloysius said the SAP Ariba-based e-procurement system currently being implemented by SATS will be integrated with its SAP enterprise resource planning (ERP) system, enabling it to achieve better synergies across its supply chain.

For example, demand planning can be integrated with e-procurement to activate procurement of goods in the event of a contingency, such as when key supplies from a specific country are cut.

And while SATS has been relying on outsourcing suppliers to conduct tender exercises and request quotations, it will do so through SAP Ariba when the system is ready by April 2021.

“We will have one dedicated system, and all the necessary modules are going to be within one software,” said Aloysius. “That will allow us to synergise processes and have good visibility of procurement activities, and make sure that the service level to our internal customers is good.”

At the same time, SATS is looking to tap the commercial network of suppliers on the Ariba platform to diversify its supplier base beyond those that it uses now.

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In terms of invoicing, Aloysius said the Ariba platform will help to improve the invoice-to-payment cycle by ensuring that the invoices submitted by suppliers contain the correct information, such as price and quantity.

Even with the use of e-procurement, higher-value tenders will still involve key stakeholders in the decision-making process, he said.

“It’s hard for someone to approve a purchase of $10m by pressing a button,” he added. “There needs to be a debate and a paper to articulate the justification, so that process will continue outside of the system. But all the documentation will be stored in the system.”

Besides streamlining procurement processes, Aloysius said SATS is looking at strategic sourcing and ways to influence its biggest suppliers to meet its needs. “In the case of food, for example, we’re going upstream to look at the farms that produce the products we want,” he said.

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