MeRLIN Direct Material Sourcing Solution

Direct Spend or Direct Material Procurement or Direct Material Sourcing is the process of purchasing materials that are directly used in the production of goods that the company is manufacturing. It includes all the items that are part of finished products produced by the company such as raw materials, components or parts, etc.

Procurement activities in an organization can typically be split into two – direct spend and indirect spend.

Direct Procurement deals with the purchase of materials and services needed for the manufacturing process of the company. For example, an Automotive company could source steel or electronics, or even powertrain components. It has a direct impact on a company’s profit, customer satisfaction, and overall performance.

Whereas, Indirect Procurement involves the purchase of goods and services needed for the day-to-day operations of the company. It ensures that the internal needs of the company and its employees are met. Typical examples are stationery, computers, services such as housekeeping or security etc.

A direct material sourcing solution enables businesses to streamline the complex and multi-layered processes involved in Direct Materials Sourcing ranging from sourcing and analyzing multi-level Bill of Materials (BOM), eSourcing, cost optimization, and demand tracking to budget management and managing the supply base.

Benefits of a direct procurement solution:

• Product quality and compliance monitoring
• Improve speed to market
• Improve spend management through effective category management.

MeRLIN helps organizations overcome the challenges associated with direct materials purchases. It helps procurement professionals identify sourcing needs from multiple sources like PLM, MRP, Requisitions from ERP, etc. It then consolidates demand across requisitions to maximize purchasing power. The collaborative platform helps break down the walls between engineering and sourcing departments and enhances collaboration with suppliers to convert them to strategic partners.

• Get access to accurate real-time data
• Improve collaboration with suppliers and other stakeholders
• Enhance engineering collaboration, manage complexity of bill of material versions with PLM integrations
• Gain Project/Program level visibility and savings analysis
• Get enabled to capture future price reductions and evaluate adherence to the same.
• Achieve seamless business process execution with end-to-end integration

MeRLIN can help you mitigate supplier risks mainly by ensuring the procurement organization is able to analyze, automate and streamline various aspects of Supplier Relationship Management.

• Supplier Diversification – Do detailed supplier spend analysis at individual as well as group level and ensure that no single supplier/supplier group has a dominance in your supply chain. You can also analyze your suppliers by region, country, etc to diversify your supply base or identify alternate sources in case of disruptions.
• Supplier Onboarding – Significantly speed up supplier registration and onboarding by enabling self-registration and document upload and verification. MeRLIN allows you to configure business rules to check supplier mandatory documentation or compliance documentation requirements by region.
• Supplier Management and Collaboration – The supplier management solutions in MeRLIN enable you to monitor supplier performance and collaborate effectively with them to build better partnerships.
• Supplier Audits and Assessments – Complete audits faster and expedite compliance-related activities. The automated compliance verifications avoid manual errors. Additionally, easily check how much sourcing is being done with non-preferred suppliers or low-rated suppliers.

Yes, MeRLIN can be integrated with any ERP or your homegrown systems, PLM, CAD systems, etc.