JANUARY/FEBRUARY 2011 eNEWSLETTER

JANUARY/FEBRUARY 2011

Maximize Your Purchasing Power While Simplifying the Process

Before your company starts to purchase additional inventory, supplies, or equipment, you should first consider evaluating a comprehensive purchasing solution. Automating your purchasing procedures with specialized purchasing software can help your company simplify your procedures while gaining purchasing power.

Simplify Purchasing Processes
Automation saves time and reduces administrative costs while maintaining purchasing policies and controls. Purchase Orders can be created quickly and accurately. Templates can replicate standard information to further reduce data entry. Purchase Orders and returns can be e-mailed to vendors, to reduce cycle time.

The true key to simplifying purchasing is integration. Avoid duplicate data entry by selecting a solution that is fully integrated with your Accounts Payable, Inventory Control, and Order Entry systems. As information flows back and forth seamlessly between these critical systems, your employees can spend more time on strategic objectives and much less time on paperwork. You'll also minimize costly quantity and pricing errors, as well as errors in receipt of goods.

Maximize Purchasing Power
Reducing the paperwork burden leads to higher employee compliance with purchasing policies, so your department can get a more complete picture of spending. Armed with the right data, you can effectively control costs and improve purchasing power.

You probably have relatively good control over major plant and equipment purchases, since these large ticket items require a requisition process and bidding at almost any corporation. But what about lower cost items, such as Maintenance, Repairs and Operations (MRO) purchases, or small inventory orders?

Businesses spend hundreds of billions of dollars each year on MRO, yet according to Aberdeen Group, 84% of MRO payments are still processed on paper. Employees don't comply with purchasing procedures for contracted items about one-third of the time, causing companies to miss out on critical opportunities to reduce costs.2

What if you could pool these small purchases and negotiate contracts based on the lower rates for larger volume? The costs savings can be huge, without any sacrifice of quality of goods or customer satisfaction. That's maximum purchasing power!

2 Abbas Foroughi, "MRO and eProcurement: Opportunities and Challenges," University of Southern Indiana, 2007. Accessed online at http://business.usi.edu/aforough/example.pdf

 

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