How to Modernize Your Procurement Management Processes
Written by Spencer Herder Jan 18th, 2020
Procurement isn’t a process that is simply created overnight, but rather a string of connected activities that lead to the end goal of a finished good or service. On our route to achieve these steps along the way we tend to encounter endless spreadsheets, misplaced documents, long approval cycles, and uninhibited costs.
The reason for many of these lapses within a company comes down to the sheer fact that too many workflows are still done with pen and paper, with little visibility and transparency across teams within the business, making the procurement management process much more difficult than it needs to be.
Siloed work often leaves many employees in the dark around major decisions, leading to a lack of organization and alignment across a company. Ultimately, this creates inefficiency and deeply hurts the bottom line.
To avoid the pervasive loss of time, money, and organizational control, companies ought to integrate more technology-driven solutions to renovate their procurement functions, regulate costs, follow purchases, and form an atmosphere that stimulates growth.
Now that we understand the implications behind structuring a proper procurement management system, let’s give you some more insight into the relevant topics required to deepen your ability to soak in all of the information below.
What is Procurement Management?
The procurement management process includes sourcing, requisitioning, ordering, expediting, inspection, and reconciliation
Important reasons why businesses need to modernize their procurement management process
It’s easy to see how antiquated and manual efforts to handle the procurement management process are no longer able to offer your company the velocity, efficiency, and accuracy required to create a successful operation.
Not only are these outdated methods not allowing you to reach your full potential, but they are likely causing undue harm along the way as well. Because of this, we recommend implementing a global procurement strategy to see how you can benefit from automated workflows and smoother procedures surrounding purchase orders and invoices, making them easier to track, as the suitable reviewers are able to make approvals in a hastier and more accurate manner.
Digital Management of Procurement
Let’s outline a handful of different tasks which can be optimized through a digital procurement management plan.
While using a procurement management software, there is no need for any data re-entry or manual processing. Purchase requisitions are simply converted to purchase orders as needed, automatically.
Purchase orders offer ultimate clarity into the process so that anyone who needs to reference Pos can simply find where it is located in the PO approval process at any point in time. Using procurement management on a project allows for all Pos to list out any details which may be required by decision-makers in order to quickly process Pos.
A requisition system allows for an easier to follow process for anyone requesting a requisition. From naming preferences or purchases to suggesting vendors, the system embeds a policy which outlines the steps the requestor needs to take.
Policies are actively enforced, and misleading and missing information is recognized immediately, so there is no space for errors throughout the purchase request. Utilizing a procurement management software allows for digital data capturing as well as routing and approvals to assist companies in keeping this entire experience streamlined and efficient every time.
Invoice approval and processing is an important step in any procurement plan project that can be made more efficient and more precise with the help of automating the procurement process. Whenever a vendor submits an invoice, the procurement management solution will process the paper invoice, digitize it, and validate it with available information like supplier name, purchase order limit, and contract payments.
If there are inconsistencies, the invoice approval system will prevent the invoice from being paid and decide what to do based on the guidelines you have laid out beforehand. If the information is correct, the procurement management system will automatically forward the invoice to required operator for approval and final payout.
Vendor management is an extremely important matter when trying to innovate and create winning brands and products. Global procurement is what separates great companies from good companies. Procurement networking through utilizing numerous vendors can allow for enhanced speed and efficiency. Automating this process with a procurement company can be an extremely useful step.
Automating this process can enhance collaboration with internal teams as well as with suppliers. A tool like CBX Cloud allows for retailers to work closely with multiple suppliers in order to complete tasks within the product development process in a timely manner to make sure deadlines are hit. Other tasks to be automated within vendor management include background checks of suppliers, RFQ reviewing, and having a central location to house important data and documentation regarding product specifications.
To learn more about the ins and outs of supplier management, read our in-depth guide on vendor management.
Getting approval to work with various vendors can be a time-sink which slows you down. Implementing a procurement management system allows you to review contracts and compare them against others to ensure everything looks proper. Tracking these contracts over a period of time is extremely useful in ensuring there are no disputes down the line about the extent of work which was to be completed.
Increasing quality and compliance
The supply chain is a key to differentiation. Speed, Scale, Simplicity and Quality are critical to keeping it running as efficiently as possible. However, from a retailer’s perspective, sourcing-to-shelf is fraught with safety, quality and compliance hazards – one mistake could not only incur hefty fines but could irrevocably damage the reputation of any retailer or brand.
Staying on top of the latest corporate and regulatory requirements demands effective collaboration between retailers, vendors and 3rd party auditing, compliance and testing organizations. Complexities of global retail sourcing stretches far and wide, with failure resulting in bankruptcies and store closures.
Balancing these factors requires a trade management platform to enhance stronger communication and collaboration. Further, the quality and compliance measures help to manage your core processes around product quality safety and compliance.
CBX quality and compliance portal
The CBX Quality and Compliance Portal for global trade management is a leading platform for retailers and brands to automate and manage the complexities of today’s global retail sourcing supply chain. The CBX Quality and Compliance portal is configured to fit each organizations requirements across the supply chain and offers out-of-the-box intuitive, easy to use templates.
Key features to seek out in a procurement management system
In our technology-filled world, we are served endless options when it comes to every facet of life, but in business, it’s important that we select products that best aid our exact needs and future plans as a company.
In comparing various procurement systems, I’d like to point out a few notable features that should help you in the long run:
Streamline, automate and manage information from the distinct parties, from retailer to manufacturer to shipper, helping to deliver ahead of customer expectations.
Product Lifecycle Management (PLM)
Manage the entire product development process, allowing collaboration across cross functional teams throughout the entire product lifecycle, efficiently and cost-effectively, from ideation, design and manufacture.
Order & Production Management
Providing end-to-end critical path management centered on your processes and business needs allowing your team to focus on what matters: Delivering products to market faster for your customers.
Giving you the tools you need to drive mobile initiatives across your entire organization. From capturing new ideas to sample management to factory inspections our mobile suite allows information to travel from the field to the office.
Why choose CBX Software as your procurement management company
Over the course of 25 years, CBX Software has simplified the business of global sourcing, transforming traditional methodologies into fast, friction-free supply chains through our innovative product development, sourcing, quality and compliance management platform. CBX helps retailers, and brand manufacturers digitize and visualize a transparent and collaborative workflow from plan to pay – one intelligent collaboration solution for the entire enterprise in the Cloud.
A procurement management system eliminates manual bottlenecks. This improves the entire process from booking, shipping, all the way through delivery.
CBX Cloud’s procurement networking software enhances your supply chain collaboration by integrating new suppliers quickly, and accurately while building trust. This is important in ensuring your suppliers are competent in using the