The 3 Cornerstones of Effective Purchasing

As the role of purchasing continues to expand and grow, it’s easy to get caught up in all of the latest trends. While there is definitely value in knowing what’s new, it’s now more important than ever to have a really strong grasp on the fundamentals of effective purchasing. The reason that fundamentals are so important is because many organizations are looking to enhance their purchasing through efforts like automation with purchasing software. Since automating different tasks can provide a major boost to what’s currently being done, it makes sense for companies to explore the different options that are available. However, the key thing to remember is if there are currently processes in place that aren’t optimal, automation isn’t going to magically solve them. So before a company can reap the benefits of things like automation, they need to ensure that purchasing is being done in the best way possible. That’s where the three cornerstones of effective purchasing come into play: Accurately Forecasting Demand It’s simply not possible to accurately forecast demand without access to information. Since accurate information is vital, it needs to be collected and shared at all levels of the supply chain. In addition to quantitative data, purchasing professionals should also have qualitative data like survey answers. By having this mix of data, it becomes possible to create the best possible model for forecasting demand. Managing Inventory In the past, most companies operated by minimizing the amount of time that inventory was held. While the reasoning behind this strategy still holds up, many companies are facing new realities. For example, if a company is struggling to find the skilled labor needed for manufacturing, holding a larger amount of inventory may be the most prudent decision. Regardless of the specific path that a company opts to follow, what’s most important for purchasing is that inventory is properly managed by staying on top of trends like price and lead time increases. Assessing Suppliers As mentioned in the previous section, a shortage of skilled manufacturing labor is an issue that many companies are having to face. Because of the implications this can have, being able to accurately assess suppliers is essential for optimal purchasing. Not only can effective supplier assessment provide organizations with a competitive advantage, but having the ability to consolidate to a smaller number of suppliers that can be counted on to deliver can result in significant cost reductions. Once a company uses the three cornerstones of effective purchasing to optimize their process, purchasing software can enable those responsible for purchasing to be even more efficient. With everything from requisitioning to purchase order generation, Bellwether Purchasing Software has all the features that purchasing managers need. Be sure to visit the main page of our website to learn more!