How procurement automation can benefit your business
With the rapid development of new technologies in the last decade, businesses in various fields have taken steps to implement process automation systems into their daily operations. Procurement processes are no exception, including automated Requests for Quotes (RFQs) and vendor contracting activities.
Skeptics might see this as an attempt to decrease the need for human labor, but that’s far from the truth. In fact, automation only helps reduce the time and labor needed to perform some routine, repetitive processes. At the same time, it frees your staff to perform more complex and demanding processes, thus increasing overall efficiency.
While this is the main reason why many companies chose to automate their procurement processes, there are several other benefits that automation provides to help your business thrive.
Automating your procurement process saves time
The procurement process consists of consecutive purchase order cycles. Each cycle involves several stages, from vendor research and price negotiations to purchase order creation and its eventual approval. Needless to say, this process can take a lot of time to complete.
But procurement automation can speed everything up. On average, it helps reduce the entire purchase order cycle by about five days. What’s more, it can result in a two-day supplier lead time reduction, which is especially important in lean manufacturing.
Procurement involves a lot of paperwork and sorting it all out can take weeks or even months, especially if you’re working with hard copies of documents. By automating the procurement process, you can ditch all the hard copies in favor of digital documents. Not only is this more environmentally friendly, it also speeds up the interactions with vendors and other institutions that play a part in the procurement process.
Procurement automation gives you more control
One of the main challenges that procurement departments have to deal with is the low visibility of some stages in the process. This is particularly true of indirect procurement, where the costs often go overlooked for a variety of reasons. Using procurement software is one of the best ways to overcome this major challenge.
You will have direct access to digital copies of all documents, as well as regularly updated analytics for every step of the process. You can see how much you’re spending on each of purchase and easily identify areas where you could save money by switching suppliers or negotiating a better deal. This gives you more control over your department’s budget and helps the business stay profitable.
Procurement automation also allows you to streamline your supplier management process. Working with multiple vendors requires a lot of time and effort but fortunately, procurement software gives you quick access to vendor information and makes your work much easier.
Finally, it is important to remember that procurement affects your whole business. After all, without the raw materials and all the items that make up your indirect spend, you wouldn’t have any products or services to sell to your customers. Procurement automation will benefit your entire company and not just the procurement department.
GenAI Sourcing Intake is LIVE with Several of Our Fortune 100 Customers
Fairmarkit Projects GenAI Will Reduce Intake-to-Source Cycle Times by 95%+ and Dramatically Increase Procurement’s NPS