Purchasing and supply management: how to identify process failures?

Purchasing and supply management: how to identify process failures?

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A company's purchasing and supply management is one of the most strategic areas of the business. After all, good negotiations and successful acquisitions can be synonymous with increased profits and a greater competitive advantage over competitors.

Therefore, it is essential to identify flaws to make processes increasingly efficient and obtain more satisfactory results. Continue reading and find out how this can be done!

Process mapping favors purchasing and supply management

Process mapping involves studying work methods from start to finish, looking for weaknesses that affect results. This makes it easier to identify the causes of failures and managers can create truly effective actions that solve the problem, instead of developing actions that only minimize the symptoms.

For mapping to really help, the ideal is to analyze the activities that are carried out and highlight their main points, such as:

  • Suppliers: people or companies that provide the material or information needed to carry out the task;
  • Inputs: are the resources (materials and information) used in executing the process;
  • Flow of activities;
  • Outputs: product of the completion of the activity (materials or information worked on);
  • Customers: who receives the process outputs (internal — people or areas — or external — business partners and end customers.

From there, a design of this flow of activities is created, the so-called flowchart. Through it, people can better understand how the work is carried out and exactly where the failures are located.

To ensure that mapping is truly useful in problem-solving, it is necessary to implement the changes, check whether the results are satisfactory and, if so, formalize the new method — ensuring that employees are aware of the changes and the importance of putting them into practice.

Performance indicators

Performance indicators can be defined as a management tool that helps analyze the results of processes. Through them, the manager can better understand whether the resources and efforts directed to the activities were necessary to achieve the goals initially set.

If performance is below expectations, it is a sign that some failure occurred during the process, the resources allocated are not sufficient or the work method is inefficient. This makes it possible to understand which processes need more attention and which new strategies can be adopted to achieve the expected objectives.

Supplier selection

Choosing good business partners is also essential to ensure better results. In other words, if a supplier cannot meet a minimum quality standard, this will affect your company's performance.

Therefore, it is necessary to carefully plan the process team, seeking references, analyzing the market well, the opinions of other customers, among other aspects. In other words, the factor price should not have the greatest weight when making purchasing decisions.

If the company already has consolidated partners, it is worth investing in dsupplier development. The goal here is to suggest improvement policies and ensure that they are aligned with your values ​​and goals. Applying for a quality certification is a good example of how to strengthen the supply chain.

It is also important to be aware of the need to evaluate a series of issues and that the maxim ““cheap can be expensive” is completely true. Choosing based on price can lead to several problems with delivery times, shipping orders and the quality of products and services.

Integration with other areas

Purchasing and supply management can — and should — be closely linked to other areas of the business:

  • Inventory management: depends on correct acquisitions to ensure a good composition, in line with demand. At the same time, the purchasing department needs inventory information so that it can acquire the right products at the most appropriate time;
  • Commercial: this is also directly linked to the inventory area. In this case, the ideal is to ensure the exchange of information related to demand forecasting, in order to ensure that customer orders are met appropriately.

Through these two references, it is possible to see how communication must remain open and fluid between sectors, so that the necessary information is available and good work can be carried out.

In this sense, the failures may be precisely due to problems in data sharing, given that, without the necessary information, the purchasing area will hardly be able to make the best decisions for the company.

Purchasing management software

Investing in a management system, in most cases, requires standardization of processes, which helps in identifying and correcting failures. In addition, automation of tasks means that the error rate and need for rework decrease considerably.

When tasks are performed manually, there is an even greater delay in completing processes, information is decentralized (making it difficult to locate), data is less secure and reliable, in addition to a series of other problems that are easily solved with the use of technology.

Another point worth highlighting is that, in addition to these improvements, the use of software makes it possible to generate reports and analyze data much more effectively. efficiency and reliability. This allows the manager to analyze results, identify flaws and create more assertive action plans.

When purchasing and supply are well managed, the chances of all other processes and areas achieving promising results increase, as this is where the routine of many others in the company begins. By correcting errors and adopting improvements, not only does the area benefit, but the company as a whole feels the positive effects.

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