In-company purchasing management is fundamental to generating value, growing revenue and increasing corporate profits. However, it often becomes an area where SMEs do not take full advantage. In most cases this is due to a lack of time or human resources and in others, to a lack of specific knowledge.
That’s why, from Knowee we want to help you implement a much more efficient and productive business procurement process.
How to improve purchasing management in the company
We propose a series of actions that will help you manage your business purchases more efficiently.
1. Define the processes of your purchasing cycle
One of the first things you will have to analyze is your own purchasing process. An overall picture of the process will help you to identify its various pros and cons and any possible opportunities available for optimizing it and improving its performance. It is essential to reduce the workload of your manager or purchasing team. It may even be necessary to expand your purchasing team.
2. Make a purchasing plan
Many companies do not work with a clear purchasing strategy or plan. They make purchasing decisions on the basis of need, i.e. when they run out of stock.
To work more efficiently means working with a higher degree of planning. Such planning can be a long process and can lead to unforeseen results, but you can use the data from previous years to make your estimates.
Your inventory will play a key role in your planning. It is important that you monitor or review it periodically.
3. Automate your processes
The automation of purchasing processes is absolutely key to efficiency improvements. For example, using ERP software can help centralize and organize all the key operational information of the different departments that make up your company. As far as the purchasing process is concerned, it can help you and your team to automate the issuing of purchase orders, orders or invoicing.
There are specific platforms available to purchasing departments for the contact, communication and negotiation with suppliers or the monitoring of budgets and offers. You will also find specific tools to control your purchasing and procurement processes and help with supplier selection.
All these automation tools make it easier for you to establish your needs, organize all valuable information, speed up processes, schedule your purchases and avoid duplication of work.
4. Establish win-win partnerships
Suppliers are the foundation of any business. It goes without saying that good relationships with them are fundamental (while always putting the interests of your company first). You will have to assess factors such as price, quality, supply time, payment facilities, response time to queries about quotations etc. but, above all, their supply capacity.
Depending on the volume of your business, you may want to centralize your suppliers as much as possible. Why? Centralization of suppliers can translate into significant discounts or advantageous payment facilities in your purchasing process or, at the very least, a better negotiating position.
Whatever the supplier situation you must keep focus of your company’s best interests. Constantly analyze the market of suppliers, what your competition does and do not rule out making small supply tests for the optimizing of your processes. Don’t get stuck in a rut.
5. Communicate with your team
You will already know that communicating with your team is important, but it remains a common source of problems. Communication with your purchasing team will help you to know how the purchasing process works from the point of view of those who manage it on a daily basis. Sharing information, delegating and involving others in the company’s strategy is key to improving efficiency.
Implementing processes for greater efficiency is key to getting the most out of your company’s purchasing management. Without a focus on efficiency your business will stagnate. The digital transformation is on your side.