Streamlining Challenges - Unified Solution: obstacles automation addresses
Streamlining Procurement: Here's the Dirt on Common Problems and How to Solve 'Em
Many bosses think: "Our procurement's running smooth." But is that really the case? Most organizations don't even realize the cash they're leaking in their old-school operations. While employees are sending documents via email, hammering out prices on messaging apps, and sifting through old contracts in ancient archives, the business is losing:
- Cash - due to excessive spending and suboptimal purchases.
- Time - on tedious chores instead of high-level management.
- Edge over competitors - while other companies automate processes.
Automation ain't just about "everything's cool." It's about spotting hidden issues, fixing unsuspected losses, and preventing future cash drains. In this article, we're going to dive into five key problems that can be swiftly addressed through automation.
Problem 1: Inefficient Workflows
A study by the Institute for Supply Management discovered that around 30% of procurement employees' time is spent on mundane tasks like order processing and document management. You guessed it – this yields considerable delays and stretches the procurement cycle time. Many companies prove this, as:
- Processing a single order can take up to 47 minutes.
- Document approval takes 3-5 days.
- Finding suppliers demands 6-8 hours of hard work.
Solution: Implementing automated procurement systems can trim down order processing time by up to 50%. Companies deploying automation report that time spent on routine operations is sliced by 2-3 times. In some cases, the same work takes just a fifth of the original time.
Problem 2: Documentation Errors
Documentation errors can lead to hefty financial losses. Studies show that up to 20% of all orders contain errors, which can steal up to $300,000 a year from a single large enterprise.
Solution: Automation minimizes manual errors via built-in checks and templates. In companies leveraging automation, the percentage of documentation errors has been chopped to a cool 5%, saving a small fortune in resources and time.
Problem 3: Obscured Processes
Without transparency in procurement procedures, it's tough to judge efficiency and flag bottlenecks. Up to 70% of companies are clueless about their procurement, making it challenging to make smart business calls.
Solution: Automation systems offer a complete overview of processes, enabling real-time purchase tracking and setting up an alert system for oddities. Such transparency helps identify potential savings opportunities, which, according to research, can chop procurement costs by 10-15%.
Problem 4: Inability to Secure Strategic Partnerships
Many companies chase quick wins and overlook long-term collaborations. According to Deloitte, 60% of organizations don't use modern tech to analyze supplier credentials, crippling their competitiveness. Lengthy endeavors to curate relationships with suppliers are also often abandoned.
Solution: Utilizing automation tools aids in-depth supplier data analysis and bolsters long-term relationships. Companies utilizing automation have seen an increase in strategic partnerships by 30%, leading to improved performance and cost-cutting via elevated competition.
Problem 5: Data Loss Over Multiple Channels
Many companies struggle with haphazard communication with suppliers through emails (missed messages, hard to track conversation history), messengers (Viber, Telegram) (unstructured, messages can vanish or be altered), and phone calls (no agreement recording, everything depends on trust).
As a result, 30% of procurement professionals expend their precious time searching for old agreements or clarifying terms (McKinsey data), 15% of purchases are tardy due to vanishing commercial offers or specifications, and fracases with suppliers arise due to clashing terms: "We agreed on something different."
Solution: Implementing automation software lets all negotiations take place in one place – offering a chat feature with suppliers, where the chat history, attached commercial offers, technical specifications, and all agreements are stored. This not only boosts communication speed and transparency but also saves serious time when preparing reports.
Closing Thoughts
- Cut operational costs
- Boost planning accuracy
- Upskill process control
- Strengthen partner relationships
To reap maximum benefits, follow these steps:
- Thoroughly analyze your current procurement processes.
- Set performance indicators for measurements.
- Craft a deployment plan with clear deadlines.
- Offer employee training and support.
- Keep tabs on results and continuously optimize processes.
Procurement automation tech has proven effective across various sectors and can be customized to suit any business's unique needs. Chronicling hundreds of procurements per day, Bidmart's automation program is leveraged by banks, manufacturers, IT companies, retailers, telcos, and more.
- In the realm of finance and business, technology-driven automation helps to streamline procurement, reducing operational costs, boosting planning accuracy, and upskilling process control.
- To achieve these benefits, one must first analyze current procurement processes, set performance indicators, create a deployment plan, offer employee training, and continually optimize processes. Automation can be adopted across diverse industries such as banking, manufacturing, IT, retail, telecom, and more, with Bidmart being one example.
