Without tactical sourcing strategies in place, it would be nearly impossible for most businesses to obtain the products, materials, and goods needed for efficient business operations.
Procurement specialists wear many hats and manage a bevy of responsibilities — from contract management to supply chain management and everything in between. However, without established automation strategies to lean on, organizations can lose out on increased production output and become less competitive.
Still, not all strategies are created equal — and some are better than others for one simple reason: They can significantly drive up ROI. Here are a few proven automation strategies that can help supercharge your financial performance.
1. Save Time by Eliminating Repetitive Processes
By routinely examining your procurement pipeline from top to bottom, you’re bound to see how redundancies — manually processing payments, monitoring and upholding contracts, and checking and reconciling invoices against the database — can stymie day-to-day operations.
Now, don’t get it twisted. These are all vital steps in your procurement workflow — but do they need to be manual? For tasks that follow a clear-cut, predictable process, automation is a huge timesaver. Say you want to identify vendors with the lowest prices. With a vendor management system, you can automate much of the research and still find the best deals without draining your team’s resources. You just need to find the right tool for the job.
2. Attain Hyper Efficiency
At face value, procurement is rather straightforward. Case in point: You want to attain goals through enhanced efficiency and cost-effectiveness. While that sounds great on paper, the reality is that strategic sourcing is no easy feat. Thankfully, higher employee output and mitigated supplier risk are some of the top benefits of automation.
Not only that, but these competitive advantages help to reduce the many cumbersome aspects of procurement into a swift and seamless operation. Just imagine all the time your team spends on complex tasks like consolidating supplier lists and tracking invoices. By streamlining these processes, automation helps make procurement hyper-efficient and helps you focus on value-adding activities.
3. Reduce Risk by Maintaining End-to-End Supply Chain Visibility
Undoubtedly, ineffective sourcing is every procurement professional’s worst nightmare. That’s because supply chains are constantly expanding in global reach and complexity. And it’s becoming trickier to manage a growing list of distant suppliers. In fact, as many as 65% of all procurement specialists have no visibility beyond their tier-one suppliers, according to a Deloitte survey. Simply put, the longer and more complicated the supplier chain, the more difficult it is to pinpoint major risks, such as quality, cost, and potential fraud, in real-time.
Now, it’s not just the threat your direct suppliers pose that you need to worry about. There’s the supplier’s own network of providers to consider, too. A single misstep from any of these interconnected entities has the potential to disrupt the entire supply chain, making it a crucial aspect that demands attention and caution. That’s where e-sourcing software truly shines.
A real game-changer on the automation front, e-sourcing solutions help minimize risk by facilitating a centralized, efficient, and transparent approach to supply chain management. Real-time updates ensure adjustments are made as needed. Workflows are added on the fly to handle urgent reorders and contingencies arising from critical shortages. From there, successful supplier contracts are easy to formulate and come with legally reviewed boilerplate clauses.
That said, e-sourcing is only a single part of the larger ROI equation; the other is freight procurement. Smoother shipping operations can be realized by investing in online freight marketplace solutions from companies like Loadsmart.
Automation and Increased ROI: A Match Made in Heaven
When it comes to methods that can potentially boost your ROI, procurement automation is a great way to generate tangible results. Every single task, whether big or small, has the potential for savings and additional revenue. By simplifying or eliminating time-sucking, effort-intensive tasks, you can finally say hello to a higher bottom line. Start from sourcing and spend visibility, then progressively move to larger tasks. Don’t leave any stone unturned because, ultimately, your time and money savings can increase exponentially.