You can probably agree that boredom does not exist within the purchasing department. With responsibilities ranging from complex negotiations to supplier management, the industry has a strategic role within a business and a stressful routine.
When well planned and executed, the purchasing process becomes an important ally for the success of the organization, contributing to greater productivity and also reducing costs.
However, due to its importance, certain precautions are essential in order to avoid the main problems related to this area. Check out, below, the main ones, with their respective solutions.
1) Purchase orders with unclear requirements
Purchase orders usually come from the industry that will be the end user of the ordered material, and not always do these areas send the necessary (or correct) information for price research, negotiation and procurement.
However, the purchasing department needs the order to contain precise information: part number, manufacturer, quantity, minimum and maximum delivery time, and the cost center where the value of the acquisition will be directed – to name a few items.
This clarity in the issuance of the order, which will make all the difference so that the best possible work occurs in the selection and delivery of requests, can be guaranteed with the use of specific software for issuing the order – which, also, will allow additional benefits such as:
- overview of all the company’s purchase orders;
- time optimization;
- real-time monitoring of processes.
The choice of the ideal tool should be part of a broad process, where digital security is also considered – no company wants to see its data leaked, leading to financial and image losses.
Regarding the use of technological tools, check our Top 10 software for the purchasing department.
2) Difficulty in Negotiation
The purchasing process requires good negotiation strategies, and it is up to the professional of this department to know how to negotiate values, deadlines and other payment conditions in order to reach an agreement that offers the best possible conditions for your company.
Negotiation skills can be learned – or improved – with experience and with an attention always focused on market trends, following the movement of the economy and the reality of each supplier.
Due to the importance of the subject, we have created several articles on the subject – among them:
Advanced Negotiation: Prepare yourself for great results
Using emotions for a better negotiation
Resolving conflicts in negotiation
3) Untrained staff
To work well, any team, from any industry, needs regular training and capacity building – and with the purchasing department it’s no different. It is about improving employees’ skills and knowledge, as well as keeping them updated about new systems and ways of operating in a certain segment of the company, or even keeping them aligned with the goals and objectives of the organization.
A training program, which can be conducted through virtual channels, is an excellent way to ensure better team performance.
It is also essential for the team to be up to date with the novalties and news in the sector, by getting to know new methodologies such as Strategic Sourcing, which greatly improves the acquisition process, and is focused on generating results and reducing costs for the company.
4) Lack of transparency in the purchasing process
Among several aspects, the purchasing process involves the judgment of the best proposals for the supply of materials and services; the selection and contracting of suppliers; and the work with bids, whenever appropriate.
The best option to avoid problems such as fraud in the purchasing process is the implementation of an efficient compliance program in the company – we talk specifically about this subject in another of our articles, check it out: Benefits of Compliance in the Purchasing Department.
Another important factor is to make use of Business Intelligence indicators and software, as we show in the article on this subject.
5) Inadequate evaluation of suppliers
Among the several variables within the purchasing process, it is essential to consider the cost-benefit ratio in terms of suppliers. Remember that the quality of your suppliers’ products or services affects your company’s product or services – in other words, it impacts the progress and evolution of the business. This is also why the process of selecting these partners requires a great deal of attention and dedication.
In this sense, when choosing suppliers for your company, search for references, seek the opinion of other companies that are already customers of the supplier in question, and check whether it is aligned with the goals and values of the venture in which you are inserted.
After acquiring the products, give feedback to the selected partners, observe if they will take this into consideration and if they will try to adapt to your notes (if any); also evaluate if the partner is flexible in terms of negotiation, if there is room for this; analyze, also, the general progress of this partner; and implement improvement policies for this whole part of the purchasing process.
Also, remember that to avoid or minimize the negative effects caused by adversities such as those mentioned above, especially regarding the relationship with suppliers, you can also count on the help of a company specialized in indirect material procurement, which offers numerous benefits to your purchasing process!
Soluparts is a global company – with offices in Brazil, Germany, Portugal, Hong Kong and the United States – that is able to connect your company to the most relevant manufacturers in the world. We specialize in purchasing all types of industrial materials and have access to thousands of products and suppliers worldwide. Learn more about our value proposition!
To better understand how Soluparts can facilitate your company’s purchasing process, please contact our team!
