Procurement features within ERP systems should be maximised

Effective procurement is an important element in many businesses, but a manufacturing operation would grind to a halt without it. Having parts and equipment available when needed is crucial in avoiding downtime that can directly affect the bottom line – and with lockdown likely having an effect on many businesses, any further lost time post-lockdown will be most unwelcome.

It’s unequivocal that manual procurement processes are no longer viable in modern manufacturing, where smart solutions and automation are changing the face of the industry. Players are having to get on board with evolution in order to keep apace, and while many are enjoying the benefits of an ERP system to help streamline business processes, they mightn’t be realising the full potential of available features for both direct and indirect procurement. The Advanced Procurement functionality of cloud-based Oracle NetSuite is comprehensive and can be a great asset to a business and a real aid to recovery.

Achieve optimum workflow processes

With a procurement system having a variety of different components – from purchase requisitions to management and approvals – automating these procurement processes provides the key to maximising operational efficiency. Removing human intervention in the form of calls, emails and catalogues not only saves time but greatly reduces error risk from lost or forgotten paperwork, which can lead to delays. There is the added benefit of greater compliance, as audit trails can help meet financial and legal requirements or industry regulations.

Oracle NetSuite’s Advanced Procurement function simplifies the requests for goods or services by allowing employees to enter details for items needed without having to know the vendor details. Intelligent workflow speeds up approval processes by involving the right people at the right time – an Approval Routing feature can be enabled where necessary, and a real-time view of order status is an invaluable function in linking purchase orders to requisitions. The dashboard allows for the tracking of purchases and consumption – an important for effective management of inventory levels. Too much inventory can tie up cash, valuable storage space and increase instances of obsolescence, while too little can lead to downtime when parts run low and delivery lead times are long. Maintaining the right balance is easy with an intuitive system providing a real-time view.

Reduce costs and generate savings

The objective for every organisation looking to streamline processes is to positively impact the bottom line. Oracle NetSuite’s Advanced Procurement function offers a multitude of ways to reduce costs and generate savings.

There are obvious savings opportunities when automating procurement processes, such as the time employees spend on procurement – which can, in some cases, be far higher than the cost of the purchase itself. Cost savings can also be achieved by streamlining vendors: using fewer, pre-approved vendors can mean savings can be negotiated. In the case of blanket purchase orders for annual or regular goods and service requirements, tiered or fixed pricing and discount potential for pre-determined quantities is negotiable, so the user is always in a position to access the best deal possible for bulk purchases of goods and services. Improved visibility of spend can also help negate unnecessary spend, and the ability to monitor vendor performance can highlight cost competitiveness across multiple vendors.

Keep your vendors close

Maintaining good relationships with vendors is an important and underestimated element in procurement. Oracle NetSuite’s vendor management feature promotes closer relationships with vendors and facilitates optimum management of the account. Setting up a vendor in the system means all transactions and communication with that vendor are documented. The built-in reports provide an at-a-glance overview of the orders, bill and payments made. When using Oracle NetSuite OneWorld as a subsidiary organisation, the efficiency is enhanced, with each subsidiary having access to the vendor record.

The vendor portal function provides a great way to stay in touch with vendors and reduce email communication, keeping messages in one place and reducing time associated with trawling back through emails to ascertain status information. The vendor bill feature keeps accounts on track, providing an accurate view of payables at any stage of the billing cycle, and the approval workflow checks for any discrepancies – matching the bill against the purchase order and item receipt before processing payment.

There is no doubt that there is a growing and continued focus on achieving efficiencies and growth in manufacturing through the use of smart technologies – but effective procurement must be considered a key area and one where automated processes are as valuable to the business as automation is on the shop floor.

Investing in a cloud-based business management system such as Oracle NetSuite, with dedicated functionality for elements such as procurement, provides a cost-effective solution without the upfront investment in on-site systems, equipment or IT staff. It’s an investment any manufacturing operation in the current climate should strongly consider.

If you’re interested in finding out further about Oracle NetSuite’s Advanced Procurement and how it can drive increased efficiencies and accuracy, head to our contact page and arrange a video or telephone call with us.