February 22nd, 2019 • Procurement Process • purchase order
From having been an afterthought addition in the ‘70s, procurement has come a long way. Today, it is arguably one of the most expense-intensive departments of organizations, across industry verticals and geographies.
Now that procurement is a firmly established part of organizations, an important concern is speed: how to get the procurement department functioning as smoothly and quickly as possible.
Since purchase orders are crucial to success, and because they can cause significant delays when mismanaged, organizations need a way to speed things up on the PO front.
Here are 5 ways you can get POs up and running quickly from requisition to order.
Sometimes, all a business needs to give its procurement cycle a bump is to hire a purchase manager, if not a whole team. A purchase manager can keep a close eye on POs and make sure no order is duplicated or lost in old email threads, develop stronger vendor relationships, and get invoices cleared with consistent efficiency.
You can transform your supply chain into a leaner, quicker and more efficient state simply by rationalizing the supply base. You can do this by reducing the number of vendors on your list. Doing this helps you reduce time wasted on less preferred vendors, and develop a leaner, optimized supply chain.
APQC is a non-profit organization that aims to help organizations improve processes and knowledge, and has been doing this for 40 years. Their study found that almost 80% of procurement departments go for regular appraisals of vendors. This means you likely already have the information you need to build a leaner supply chain.
As an alternative to kicking vendors off your list, you can choose to simply prioritize the ones your team prefers. This is a less-destructive means to the same objective: rationalizing the supplier base.
In this case, you spend time improving your business relationship with preferred suppliers alone. This drives supplier performance and is sure to speed up your purchase order cycle.
Take a look at the way your organization handles procurement. Do you have a structured approach, complete with policies and work guidelines? Whether you do or don’t, here’s a look at what a policy-controlled approach to purchasing should look like.
Consider the ordering of materials and services, an integral part of procurement management in most organizations.
Some teams use the traditional approach–manually taking care of execution and manipulating and transferring data through spreadsheets and email threads. Other teams use the more modern solution of automation, letting a software solution take care of the predictable, everyday parts of the procurement process.
APQC discovered that the purchase order cycles of the first system lagged significantly behind those of the latter. A note about automation: many companies make the mistake of tacking on an automation solution, and expecting it to deliver results.
In fact, the right way to incorporate automation to speed up your PO cycle is to first create workflows by clearly defining the processes in the procure-to-pay cycle. Using a tool like KiSSFLOW to streamline your processes and then automate them, you make a much better impact on your POs than with the four other methods.
Just like method 1, your automated purchase order app covers the discussed responsibilities of a purchase manager. It also helps you rationalize and build a leaner supply chain. In addition, a workflow-based approach also gives you the opportunity to review your purchase policies.
Through its library of pre-built procurement apps and its ability to let you build the process-based apps you need, KiSSFLOW can help you digitalize, streamline and even automate your PO-related processes.
This is a tool designed to help your procurement team take care of its own efficiency without requiring a single coding expert. What’s more, you can take a look at KiSSFLOW and see if it works for you!