Purchase orders are obviously vital to the operations of any business procuring either materials or services but with the purchasing process fraught with inefficiency and bureaucracy, how can you ensure that your business is as ‘sharp’ as possible when processing purchase orders?
1. Automate where possible.
Electronic ordering can reduce administration dramatically –utilizing methods such as Purchase to Pay (P2P) technology can not only streamline your process but also help in contract adherence, budget control and cash flow.
2. Use your ordering system effectively!
This may sound too obvious, but ensuring your using your ERP/MRP or other procurement system properly can streamline the process by reducing rework and corrections downstream. No system is perfect but ensuring that everyone is trained to effectively use what you do have is a good start
3. Ensure your authorisation process is effective
Reduce bottlenecks in terms of the authorisation chain. If your purchase orders have to be authorised by the world and his wife, then it is very likely that it will take a long time to process the purchase order. So place your trust in people and ensure that the authorisation chain is quick, simple and has no bottlenecks.
4. Raise PO’s when necessary
Consider when your organization needs to raise a purchase order – do you raise PO’s for everything? From a postage stamp to capital equipment – do you order on every “buy” signal or can you batch up minimizing orders – reviewing your ordering mechanisms can help reduce administration.
5. Improve access to information
Ensure your buyers or order administrators have the right information at hand in order to raise their order swiftly. Do they require technical specifications, do they have ready access to the approved suppliers list – can you help with improving access to pricing information?
6. Is that paper copy really necessary?
Purchasing processes can produce vast amounts of paper – consider its use – do you take file copies of your Purchase Orders? How much of your process could you run electronically?
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[…] accessibility. Supplychain-mechanic.com recommends that the first step to improve efficiency is to incorporate automation where possible. Implementing software that cuts down on manual data entry or approving mundane and routine […]