Overview:
In the complex life sciences domain, efficient procurement processes are crucial for maintaining operational excellence and cost-effectiveness. The following case examines how a global life sciences behemoth leveraged FUTUROOT to overcome significant challenges in its Procure-to-Pay (P2P) operations, resulting in dramatic improvements in efficiency, compliance, and cost savings.
Life Sciences Industry Challenges:
The life sciences industry faces unique procurement challenges, including stringent regulatory requirements, complex supply chains, and the need for rapid, error-free processes to support critical research and development activities. Balancing these demands while maintaining cost-effectiveness and operational efficiency is a persistent challenge for many organisations in this sector today.
Process Challenges for the Client:
The company was grappling with process issues that echoed broader industry challenges. It faced significant supplier delivery delays, invoice processing bottlenecks, and overall inefficiencies in its procurement process. These issues led to increased costs and operational slowdowns, potentially impacting their ability to maintain a competitive edge in the fast-paced life sciences market.
The FUTUROOT Advantage:
Recognising the need for a data-driven approach to process optimisation, the client turned to FUTUROOT, promising actionable insights into the company’s P2P processes for uncovering the root causes of inefficiencies and compliance issues.
The Implementation Journey:
The engagement kicked off with a comprehensive data extraction phase, with the FUTUROOT experts analysing two years of procurement data to identify variations and bottlenecks. This initial analysis revealed inefficiencies in goods receipt and invoice processing activities and opportunities for better resource allocation in purchase order creation and approval.
A compliance analysis showed a compliance rate of only 40%, prompting a deeper dive into supplier performance. This investigation revealed a mixed performance landscape, with some suppliers showing higher compliance rates while others underperformed. Further analysis identified rework as a common issue among underperforming suppliers, significantly contributing to invoice delays.
Armed with these insights, the FUTUROOT team worked with the client’s stakeholders to realign their processes and initiated a one-year continuous improvement cycle. Bi-monthly reports provided real-time insights and actionable recommendations, allowing agile adjustments and targeted improvements.
Business Value Delivered:
FUTUROOT’s process mining solution delivered substantial business value for the company’s P2P operations including
90%
Reduction in Invoice Processing Delays
40% - 80%
Improvement in Compilance Rate
40%
Reduction in Costs compared to the previous two years
50%
Decrease in Rework Rate
Additional benefits included:
Improved resource allocation across the P2P process
Enhanced supplier relationships through data-driven performance management
Increased operational efficiency and agility
With FUTUROOT, the global life sciences leader not only resolved their immediate P2P challenges but also established a culture of robust procurement and better supplier relations. The success of this engagement highlighted the pivotal nature of reliable process intelligence to significantly improve procurement for complex, highly regulated industries like life sciences.