Purchasing management: learn how to achieve greater efficiency in the sector

Image by pch.vector on Freepik
Image by pch.vector on Freepik
Image by pch.vector on Freepik

If purchasing management was previously seen as dispensable by organizations, today it is understood as a strategic tool that promotes, among other things, the reduction of company costs.

This occurs through the management of quotes, requests, quality inspection, receipt of goods and service SLAs, ensuring that the process is as efficient as possible.

Want to know how to manage your company's purchases, avoid rework and ensure productivity and savings in the sector? Then keep reading and check out our tips:

How to increase efficiency in purchasing management?

Purchasing can account for up to 50% of an organization's total cost, according to one lecture given at the Brazil–United States American Chamber of Commerce. Therefore, savings in this sector are fundamental to the financial effectiveness of a company.

It is important that the purchasing area works together with others, optimizing existing resources, meeting internal demands and increasing financial profits.

However, there are some important elements that purchasing professionals should consider.

The main objective is to acquire quality products and services that meet the applicant's specifications, are well priced and are delivered within the agreed deadline.

Establish goals and objectives

Before starting the purchasing process, the objectives and goals to be achieved must be clearly established.

To do this, gather data on department demands, the expenditure statement for a given period, and the expected savings. This will help you reach a more realistic goal.

Have strict control over products

To avoid unnecessary expenses, the purchasing department must monitor the products in stock well, also analyzing the materials that are essential for the business's performance.

It is also recommended to adopt purchasing process automation software, which makes processes more efficient.

This gives you a clearer understanding of your stock, sales made and product replenishment times, to avoid spending on purchasing new products without really needing them.

Manage suppliers and have a good relationship with them

For the purchasing sector to be efficient, it must carry out control and have a good relationship with suppliers.

The company needs to maintain a base of approved and correctly registered suppliers, as they can offer competitive advantages and better negotiations.

Search for quotes

Providing a good quote is not always easy and usually requires a lot of negotiation and research for the best prices and conditions. However, this is a fundamental procedure for the company to be able to reduce costs.

It is worth remembering that, in the quotation process, price should not be the only criterion. Trying to save money on the purchase without taking into account the quality of the product or delivery may end up costing the company more.

Lack of material caused by delays in delivery, for example, can generate huge losses and stoppages in the production line.

Keep purchasing and inventory areas well aligned

Stale inventory represents storage costs and the risk of loss of goods, whether due to failures resulting from idle time or expiration of the shelf life. On the other hand, the lack of materials also reduces income or even causes greater losses for the company.

The inventory and purchasing areas need to work together to ensure the maximum supply of products with the lowest possible stock.

It is worth analyzing purchase and sales histories, as well as forecasting demand and finding safety stock. This way, the company can provide good service and avoid increasing its storage budget.

Analyze the company's sales

Having good control over sales made and keeping data up to date is essential to increase the efficiency of purchasing management. Therefore, it is possible to identify the products with the highest turnover, the materials offered and know which goods are sold in a given period of time.

Based on this data, the buyer can analyze other issues, such as the average amount paid per product and per supplier, total monthly purchases and the best supplier for each product.

Furthermore, this information allows you to forecast sales, which should be based on gross profit, projecting the quantity of products required.

By applying these tips to your daily life, you can make decisions based on clear data and make corporate purchases intelligently, considering the available monthly budget and the best options.

It is worth mentioning that the purchasing department is still responsible for informing the finance department about the acceptance, rejection and cancellation of orders for products or goods.

Finally, it is recommended to track orders that are in transit.

How to reduce costs?

In addition to improving the efficiency of purchasing management and, therefore, eliminating costs arising from operational issues, it is also possible to save on company expenses with some good practices, such as:

  • Buy in bulk: products that are in greater demand can be purchased in large quantities so that better prices can be negotiated;
  • Having more than one supplier: Although it is interesting to choose a specific supplier, it is always best to have more than one option to avoid unforeseen events;
  • Assess the market: analyzing the market and looking for new goods that can replace those the company already works with is a good way to reduce costs;
  • Analyze the stock: As already highlighted, correct measurement of demand and inventory management is essential. This makes it possible to obtain better prices and maintain safety stock, ensuring customer service while saving on storage.

As you can see so far, it is necessary to analyze the available budget and the company's total capacity to effectively manage corporate purchases.

Only in this way is it possible to achieve greater efficiency in this area, reducing costs and generating savings for the company.

Again, it is important to emphasize that all of these actions are facilitated by using purchasing process automation software.

In addition to strict product control, as already specified, it can also bring other advantages, such as:

  • Efficiency in payment request processes;
  • Agility and transparency in processes;
  • Reduction in purchasing-related costs; and
  • Partnership with suppliers.

This way, the company has the possibility of better managing inventory and purchases and becoming more competitive.

If you still have questions about purchasing management, leave your comment on the post and learn how to get the best results!

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