The procurement area provides a significant contribution to the economy and competitiveness of businesses. It’s considered one of the most important drives for business success. This classification arises from some factors: investment in raw materials, stock replenishment and compliance with internal demands (regarding, for instance, infrastructure and resource availability – such as computers and printers, among others).

To stay competitive, the procurement department must rely on the search for efficiency, which must be constant in any organization – be it small, medium or large-sized – considering that decisions are directly linked to the increase or reduction of company’s costs.

Hence the importance of having an agile and organized process, which keeps up with the speed required by Industry 4.0 and, at the same time, is aligned with the company’s strategic goals.

Why procurement must be automated?

To start ahead of competitors, it’s crucial to automate the procurement flow steps, such as purchase orders, price quotation and proposal analysis, thus freeing the procurement team from manual, time-consuming, decentralized and costly processes; the team members can then dedicate themselves to strategies, negotiations and goals aligned with the organization’s goals.

And the benefits of automating procurement processes go beyond the possibility of increasing the company’s profit margin. In addition to operational load decrease and buyer productivity increase, the relationship with suppliers and customers is also improved. See below the key benefits of procurement automation and the impacts for you and your team:

Benefits of procurement automation:

1. Efficiency

Procurement processes that aren’t digitized yet depend on spreadsheets, e-mails and printed documents, which impacts the supply team’s productivity and efficiency directly – and even the organizational climate, due to excessive work. In face of the transformations brought by Industry 4.0, procurement management doesn’t need to be manual and demand a huge operational effort from the team any longer.

2. Easier information access

With the automation of procurement processes, all purchase-related actions are recorded and can be integrated to other systems and departments. Data consolidation is another benefit, as records are no longer located in different files and e-mails, which run the risk of being lost or erased.

The choice of digitizing the procurement flow will avoid the loss of important information, and will make data always available to buyers, managers and auditors. Having this facility is very important for more agile and assertive decision-making processes.

3. Accurate information

Most of the time, the procurement department handles a large volume of requests. And when this is done manually, it’s usual the occurrence of failures in the transmission of order information, with the absence (for instance) of the required specifications.

In a digitized environment and with adequate tools for procurement management, you can create business rules that allow the information to be filled in correctly, and before any purchase – thus avoiding losses to the company.

4. Order consolidation

The procurement department usually receives orders through different channels, and from different people in the company, without a defined flow. In addition to impairing the buyer’s daily activities, these decentralized processes pose the potential risks of wrong purchases, missed deadlines, incomplete quotations and difficulties in resource management.

With the use of automated tools, all such problems are minimized, considering that all orders are consolidated in a single channel. Besides preventing purchase failures, they enable an efficient management of buyers’ resources and workflow.

5. Transparency

The financial health of a company depends on different factors, and the judicious use of resources is related to this indicator directly. With the automation of activities in the procurement sector, managers can track, in real time, each step of the flow, and check if everything is being done according to the organization’s needs and standards.

It’s a way to strengthen the company’s compliance and encourage employees to work in accordance with good supplier management practices, for instance. In this way, it’s easier to ensure compliance with all legal processes – which adds more credibility to the company, regarding both suppliers and customers.

 Watch the “Purchase automation and the impacts on your company” live session

Mr. Dinamérico Rangel, senior procurement manager at Nestlé Brasil, and Mr. Murilo Zappellini, head of procurement for South America at ALPLA, had been guests at the “Purchase automation and impacts on your company” live session, which took place on July 22.

Click here to watch the event!

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