Millennials are a demographic that get a lot of coverage in the press. Millennials being unable to find jobs and dealing with large amounts of student debt are two of the most popular topics for big publications to cover. While those topics make for good stories, they don’t paint a full picture of where millennials are at.
Although it’s true that a percentage of millennials are struggling to find their place in the professional world, a large number of millennials are already in the workforce. Not only are they working, but they’re already starting to move up the corporate ladder. That’s why research shows that in less than five years, millennials will account for more than 50% of the workforce.
Although we’ve all settled into 2015, there’s still quite a ways to go before we reach 2016. Since there is a lot that can happen between now and the end of the year, many procurement professionals are looking at different trends which are expected to shape the landscape of procurement this year. If you’re curious about which factors may have the biggest impact on your profession, we’ve pulled together a list of trends that you should know about:
A Focus On Organizational Alignment
More companies are realizing that organizational alignment is an important part of staying ahead of the curve. Because many companies are looking for ways to create greater synergy among departments, it’s important for procurement to get on board with this change. That can mean having more direct communication with departments like IT or marketing. While it can take some time to adjust to this change, procurement departments that embrace this idea will actually stand to gain a lot.
Shifts in Inventory Strategies
Shrinking product life cycles and supply chain simplification are just a few examples of things that are driving the need for procurement to take a more holistic approach to managing inventory. As a result of this changing tide, it will be important for procurement departments to keep their eye on ways to accomplish goals like serving multiple channels with a single pool of inventory.
Managing Performance in Real-Time
Purchasing software is having a big impact on the way that procurement processes are carried out. One example of the impact of purchasing software is that more things are being done in real-time. Another impact is that lots of data is being collected. While most companies have no shortage of data available to analyze, translating that data into actionable information can be a challenge. Procurement departments that are able to figure out how to properly harness different types of data will have a significant competitive advantage.
The Influence of Emerging and International Markets
Apple recently announced that iPhone sales in China beat the United States for the first time. Not only are established international markets like China influencing what’s happening throughout procurement departments, but emerging markets like Latin America are also having a noticeable impact. Since these changing markets are impacting everything from logistics to pricing, it’s important for procurement departments to be on the lookout for new opportunities.
Building Stronger Relationships with Suppliers
Many businesses are really emphasizing the importance of building long-term relationships with suppliers. While that doesn’t mean procurement departments should avoid negotiating, it does mean that purchasing managers should look for ways to engage in win-win negotiations. By taking the initiative to really strengthen these relationships, procurement departments will be in the best position to weather any changing circumstances that may come up down the line.
Running a successful procurement department isn’t something that generally happens overnight. In order to get this department to an optimal position, it’s important for there to be clear goals in place. In addition to setting clear goals for what the department should focus on achieving, it’s also important for everyone who works in procurement to be aware of common mistakes. By knowing what’s most likely to go wrong, every member of the team can keep an eye out for procurement mistakes and correct them if they ever come up.
Since we are in a position that allows us to speak with purchasing managers and other procurement professionals on a regular basis, we want to share the most common mistakes that have been brought up to us:
This mistake is especially common in new businesses. And even if a business is established, it can still happen if the procurement department has just gotten up and running. The most common reason that rushed buying happens is because a company or its procurement department feels like they need to get everything ordered as soon as possible. While securing what’s needed in a timely manner is important, that doesn’t mean the procurement process should be thrown into overdrive. By focusing on a striking a balance between thoroughness and promptness, procurement departments can do an optimal job.
Not Being Flexible with Plans
It’s definitely good for procurement departments to have plans in place. Not only can this keep things moving along, but it’s also a great way to avoid common obstacles. While there are clear benefits to planning, that doesn’t mean members of a procurement department should be tied to a plan forever. Since conditions can change, it’s important to review plans on a regular basis. By making reviews part of a team’s culture, the department won’t have to worry about getting stuck in any negative patterns.
Failing to Negotiate
Although we’ve already talked about negotiating on the blog, it’s a topic that’s worth bringing up again. Even though most procurement departments are conditioned to look for deals, far too many completely overlook the possibility of negotiating. Simply put, as long as it’s done in a reasonable manner, there’s no reason that purchasing managers shouldn’t negotiate.
Making Major Decisions in Isolation
One of the roles of a procurement department is to keep things moving along smoothly for the entire company. While it doesn’t make sense to seek input for every purchase, there are times when the department should loop others into the conversation prior to making a final decision. By opening up the lines of communication, a procurement department can avoid the wasted time and resources that go along with making an incorrect decision that then needs to be corrected.
We’ve recently written about the fact that many purchasing managers don’t negotiate at all when they speak with suppliers. We have also gone over some of the strategies that purchasing managers can use to successfully negotiate with suppliers. While this has allowed us to cover many of the best practice for procurement negotiations, there’s still another topic that we want to touch on.
Although many procurement departments don’t negotiate, there are those that make negotiations a standard component of how they run. However, just because a procurement department has a standard process for negotiating doesn’t mean that they’re doing things in an optimal way. Forbes recently covered a common mistake that’s made by procurement departments in the logistics space and other industries.
Not Knowing When to Give a Little
The negotiation mistake that the Forbes article addressed was procurement departments getting too aggressive with their terms and conditions. Specifically, this is an issue that has started to become quite widespread over the last few years. The problem with this trend is instead of using the industry standards that have been in place for a long time, companies are making the decision to come up with their own rules and contract terms. By doing this, they end up putting an unreasonable amount of risk on their service providers and carriers.
So, what happens when procurement departments put themselves in this position? Although they may be operating under the belief that they’re in control, the reality is that taking an overly aggressively stance can negatively impact the leverage that a purchasing manager has during the course of negotiations. Once a supplier realizes that they’re dealing with a department that has unreasonable demands, they’re going to be far less motivated to make the deal work than if they only had to meet in the middle on more reasonable terms.
How to Remedy This Problem
Since this trend has become a noticeable issue, many companies are looking for ways to remedy it. The good news is there are several steps that can be taken to get negotiations on the right track. The first is to hire and train the right candidates. By ensuring that purchasing managers understand the optimal approach to negotiating and have the skills to carry out this process, aggressive tendencies can be eliminated.
The other step that companies should take is ensuring they cultivate a culture that’s focused on a long-term vision. While it is true that really squeezing the terms of a deal can seem like a win, any gain is only temporary. If a company wants to build a mutually beneficial relationship that will help it thrive over the long-term, this is a mission that needs to be shared with everyone in the company.
Let Bellwether Purchasing Software help your company improve supplier neogtiations with our flexible and comprehensive purchasing software. Contact us today to see why Bellwether Purchase Software is the software to choose.
While there’s no denying the fact that technology is now everywhere, that doesn’t mean it always lives up to its promises. Most businesses have gone through the process of getting excited about a specific piece of technology, only to have it fall short of the claims it makes. Because this can cause a business to invest time and resources into a solution that ultimately ends up not working out, plenty of businesses have a healthy dose of skepticism about adopting any new types of technology.
Although this outlook on things is completely understandable, it’s important for businesses to maintain the right perspective about technology. Despite some bumps along the way, that simple reality is that modern business is driven by advances in technology. Since technology is the best way for businesses to save time and money, businesses that constantly adopt the right solutions are able to gain a significant advantage over their competitors.
If you want to ensure that your business stays at the forefront of its industry instead of being at risk of falling behind, it’s important to be open to utilizing technology solutions with a track record of saving time and money. One solution that falls squarely into this category is to have your purchasing department automate. Even though it wasn’t that long ago when businesses had no choice but to manually process purchasing orders, that’s no longer the case.
And given the fact that manual processing has significant costs and resource requirements associated with it, this is something that businesses should automate as soon as possible. If your business understands the savings benefits associated with this form of processing but is concerned that implementing this type of system is going to be a major undertaking, you’ll be happy to know that Bellwether Purchasing Software offers a simple but powerful solution.
The Ideal Automation Solution for Small Business and Mid Market Purchasing Managers
The reason that Bellwether Purchasing Software has such a good track record is because it was specifically designed with small business and mid market purchasing managers in mind. Since it was built to make it possible to easily automate purchasing processes and eliminate paper, it has all the necessary features without any unneeded bloat.
Because our software was built with user friendliness in mind, it shouldn’t come as a surprise that it is incredibly easy to get up and running. Thanks to its availability as a secure SaaS solution, purchasing managers can fully use Bellwether Purchasing Software without needing to pull IT away from their other responsibilities.
Requisitioning, approval processes, PO generation, receiving, inventory, invoice matching and reporting are all features of our purchasing software. So if you’re ready to enjoy all the benefits of upgrading purchase order processing from a manual process to an automated one, contact us today.
One of the things we’ve noticed over the course of working with a wide range of purchasing managers and suppliers is that the majority of purchasing managers don’t negotiate. This observation is based on our own experiences, as well as conversations with numerous suppliers. While suppliers aren’t complaining about the fact that more purchasing managers aren’t trying to negotiate, almost all of them have made it clear that they would be open to negotiating a deal.
Since this trend marks quite a bit of missed opportunities for most purchasing managers, we want to cover some tactics that any purchasing manager can use to easily negotiate more of their deals:
Take Time to Prepare
Research has found that 62% of people who engage in negotiations spend less than 60 minutes getting prepared. While that may not seem like a very big deal, the reality of negotiating is it’s all about how you go into this situation. Without proper preparation, the experience is going to be much more stressful than necessary. By taking the time to do all necessary research and really get yourself ready for the conversation, you’ll find that you have the confidence needed to be highly persuasive.
Utilize Open Questions
Because negotiations can take many different forms, there are numerous strategies that someone can utilize during the course of striking a deal. Open questions are one of the most underutilized forms of negotiating. The reason this type of question works so well during a negotiation is because it puts you in control by making it very difficult for the other party to evade what you’re asking.
Know What You’re Trying to Accomplish
Although this may sound obvious, plenty of people enter into situations involving a negotiation without first defining their specific objective. Since negotiations are all about give and take, it’s generally best to set an ideal objective, as well as a realistic objective. And depending on your willingness to work with a supplier, it may also make sense to have a walk away limit.
Don’t Be Overly Competitive
While negotiating can provide you with a rush of excitement, that doesn’t mean you want to get too caught up in the competitive aspect of this tactic. When people enter a negotiation with the outlook that they’re going to win every single deal point, they end up sabotaging what could have otherwise been a very positive experience for both parties.
As you can see from the above tactics, negotiating is a skill just like any other. As a result, it can take some time to feel really confident as a negotiator. But as long as you commit to negotiating and make an effort to continuously improve, you’ll be very happy with the results that you begin to get from this practice.
One of the many features that Bellwether Purchasing Software offers is the ability to approve requisitions and purchase orders from anywhere. As long as you have access to email or a web browser, you can complete this task. A big part of why this flexibility is good news for purchasing managers and others involved in the purchasing process is modern workflows continue to become more mobile.
A simple way to understand why mobile is having such a big impact on how people work is to look at existing consumer behavior. Since most people consistently use their phone from when they get up until they go to sleep, it’s easy to see how this behavior carries over into the workplace. The fact that the average person has their phone within reach for 14 hours a day is why Apple and other technology companies are betting so big on wearable devices like watches.
Understanding Just How Big Mobile Has Become
Although you can see mobile devices anywhere that you go, it’s still easy to forget just how much of a societal shift that these phones have caused. The best way to put the full impact of mobile into perspective is to dig into the numbers.
Currently, 378,000 iPhones are sold a day, while only 371,000 babies are born on a daily basis. The incredible popularity of the iPhone and other smartphones is why more people on earth own a mobile phone than do a toothbrush. It’s also why projections point towards the presence of 10 billion mobile connected devices by 2017.
Shopping is one of the behaviors that consumers regularly rely on their mobile device to do. Not only do 80% of consumers use their smartphone to shop, but 56% believe their mobile devices make shopping more enjoyable. And what may come as the biggest surprise is a full 25% of consumers do all of their online shopping via a mobile device.
Since these stats put into perspective just how big mobile has become, it’s easy to see why failing to embrace this trend would be a mistake for a business. But by making the transition to a more mobile workflow, businesses can ensure that their best practices don’t fall out of step with what’s happening around them.
Mobile Provides An Advantage in Both B2B and B2C
Regardless of the specific industry you’re in, your personal productivity will benefit from being empowered through mobile. Not only will mobile provide you with flexibility and the ability to stay on top of your work, but it will also benefit anyone who works with you. So if you want to feel more in control of your daily processes and less stressed out by your responsibilities as a purchasing manager, Bellwether Purchasing Software features like mobile accessibility will greatly benefit you. Contact us today to learn more.
One of the big advantages of Bellwether Purchasing Software is that all vendor, price, procedural and other updates are automatic. That means these changes are seamlessly implemented without any need for technical support. The problem with many other types of purchasing software is automatic updates aren’t possible. Instead, all updates have to be pushed out in a manual and time-consuming manner.
With other forms of software that don’t support automatic updates, developers have a reason to avoid improving their software on a regular basis. But as anyone who works as a purchasing manager knows, this field continues to expand and evolve. As a result, many types of software quickly become outdated and end up making life harder for purchasing managers instead of helping them save time.
Since Bellwether Purchasing Software isn’t constrained by those types of limitations, we spend a lot of time speaking with purchasing managers about their workflow. By making these conversations a priority, we’re able to come up with new ideas that we can implement to make Bellwether Purchasing Manager Software even more useful. And because talking to purchasing managers allows us to stay on top of what’s happening in this line of work, we thought it would be helpful to spotlight a few of the best procurement practices for the current calendar year:
The Current State of Procurement
If you’ve been in this field for awhile, you probably remember a time when your primary mandate was to keep costs low. And your secondary mandate was likely along the lines of ensuring that supply is available at all times.
While we can all agree that thinking along those lines is outdated, the reason it’s worth bringing up is to show how far this field has come. In its current state, there are over a dozen responsibilities that professionals like purchasing managers must consistently deliver.
Identifying opportunities for savings, prioritizing improvement initiatives, delivering applicable quick win savings, improving spend visibility, ensuring proper integration and improving performance management are just a few examples of what’s required of modern purchasing managers.
How Procurement Best Practices Have Evolved
Since this field has seen such significant expansion, it’s not surprising that current best practices have evolved as well. While you could fill an entire book with the procurement best practices for 2015, the key takeaway is that this department needs to function in a way that’s active instead of reactive.
For example, procurement professionals now need to have a detailed understanding of their suppliers’ business practices. Although that’s a task that can take some time to accomplish, it’s the perfect example of the type of practice that needs to be in place so that a procurement department can run at optimal efficiency.
If you want to ensure you’re following best practices because you want to maximize your productivity, be sure to take a minute to contact us at Bellwether Purchasing Software to look at all the different ways we can help you achieve that goal.
Whether you’re a purchasing manager or an employee from another department, if you’re looking at Bellwether Purchasing Software, you may have already spent enough time reading about this product to know that it’s going to improve your efficiency and productivity. However, before you can start reaping all the benefits that our Purchase Manager Software has to offer, you may need to make a case about how your company can benefit from a procurement approval system.
Since Bellwether Purchasing Software is committed to reducing stress and increasing productivity, we thought it would be helpful to put together a post that explains exactly how a company can benefit from a procurement approval system. Once you finish reading this post, feel free to use as much of it as you need to build a compelling case for how your company will benefit from utilizing Bellwether Purchase Manager Software.
Putting the Role of Procurement Into Perspective
In order to properly demonstrate the benefits of a procurement approval system, it’s important to put this practice in the right context. While procurement has evolved over time, its core is still tied to keeping purchasing costs low and ensuring that inventory remains properly stocked.
While those tasks may seem fairly straightforward, if you take a step back and look at them, it becomes clear that they impact many areas of a business. From ensuring that margins are strong to enabling a business to properly service its customers, a lot of what a business does relies on procurement.
The Benefits of a Procurement Approval System
Now that we’ve clarified why procurement is so important to a business, it’s time to explain exactly how a procurement approval system will benefit a company. Because this type of system guides the entire procurement process, it covers requisition, approval, purchase and receipt of goods.
The first reason this type of system is beneficial is because it ensures business is only done with approved suppliers. Second, it requires a valid purchase in order to obtain goods or services. Third, this type of system encourages supplier competition, which in turn can lead to more favorable pricing.
Fourth, information like confidential procurement practices are properly safeguarded. And finally, a procurement approval system not only minimizes conflicts of interest, but also provides a system for dealing with any that arise. Because a procurement approval system has so much to offer a company, the only question left to answer is how to best implement one.
The Best Way to Implement a Procurement Approval System
Utilizing Bellwether Purchasing Software is the best way to implement this type of system. Not only does our purchasing software suite make it possible to easily automate purchasing processes and eliminate paper, but it works without requiring any IT support. And because Bellwether Purchasing Software has numerous other features that make it possible to save time, it’s simply the best way to start using a procurement approval system. Contact us today to learn more.
At Bellwether Purchasing Software, we’re committed to improving purchasing managers’ professional quality of life. Whether that means easily automating purchasing processes or providing clear information that can easily be shared with others, we consider ourselves advocates for this field.
Since purchasing isn’t a practice that exists in a bubble, we’ve found that employees from other departments often have questions about different topics that fall within the scope of procurement. One of those topics is what’s meant by the terms strategic sourcing and tactical sourcing. Because we know from our conversations with purchasing managers that this question comes up on a regular basis, we wanted to create a resource that purchasing managers could point people to or even print out as a resource.
What is Strategic Sourcing?
Holistic, long-term and systematic are the three terms that best describe strategic sourcing. The approach to sourcing focuses on both the current and future needs of a company. One of the main focuses of strategic sourcing is having both the lowest TCO and lowest supply line risk. A big part of how strategic sourcing operates is by creating a closed loop link. Since this loop exists between the supplier and customer, it becomes possible to improve elements like delivery on an ongoing basis.
In order for strategic sourcing to be carried out in the most efficient way possible, it needs to properly address relationship management, supplier evaluation and spend analysis.
What is Tactical Sourcing?
Whereas strategic sourcing takes a longer-term outlook, tactical sourcing focuses on activity that’s transactional and short-term. Although there are some aspects of tactical sourcing that can be reactive in nature, it does take a proactive approach to ensuring that purchases are made at optimal prices, as well as that supply is available when it is needed.
This type of sourcing is most commonly found within manufacturing companies that are small to medium in size. Another area where tactical sourcing significantly differs from strategic is there’s no emphasis placed on understanding a company’s overall requirements. The same goes for really digging into what a vendor is capable of doing in terms of helping a company. Instead, most of the quick quote and order processes used in tactical sourcing are focused on providing production operations with the support it requires.
While strategic sourcing may seem like the obvious choice for a company, there are plenty of companies who have found that tactical sourcing best fits their needs. That’s why Bellwether Purchasing Software is designed to fit into a company’s workflow instead of requiring them to change all of their practices. By offering this type of flexibility, our Purchase Manager Software makes it easy to get everyone on-board and subsequently enjoy all the rewards of a properly optimized procurement process.
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