Short Term Vs. Long Term Goals
Purchasing focuses on the short term goals, like fulfilling the five rights in a transaction.
- Right Quality
- Right Quantity
- Right Cost
- Right Time
- Right Place
The procurement cycle focuses on more strategic and long term goals, such as aligning itself with corporate strategy or goals or gaining a competitive advantage. Because this process looks more into the needs of the organization, it is proactive, while purchasing is reactive. Procurement is about the bigger picture, while purchasing is about the needs of the business right now.
Relationship with Vendors
Both processes do work towards a beneficial relationship with vendors. Purchasing focuses more on creating beneficial relationships through purchases. The buying of items and proper payment is sure to make vendors happy. However, procurement focuses on how vendors and buyers can help one another.
Procurement involves making a list of approved vendors. The priority is making those vendors happy so that you can achieve a long-term relationship. This relationship not only benefits your business but the vendor’s as well. This will continuously make them happy with your business, and they’ll want to give you certain benefits, such as lower prices, or better contractual terms.
Robust e-procurement software will have a purchasing function that will help you improve the procurement process and purchasing process in one easy to use interface. When you look at either of these processes, there are many stakeholders involved, such as internal parties and employees, to external parties such as vendors and contract negotiators. Both processes demand documentation.
A single purchasing cycle can last for weeks, but a procurement cycle can last for months. That time can double if they are performed manually. Revising documents, evaluating bids, and reviewing invoices will cause a huge delay in the procurement cycle.
However, efficient procurement management software lets organizations store all purchasing and procurement files in one database. Procurement software solutions automate tasks to offer convenience and efficiency that a manual system cannot match.
Does My Business Need Procurement Software?
If you are currently usual paper-based, manual purchasing and procurement processes, it’s time for a change. Digital solutions will help you manage your business processes more efficiently. They also offer real-time data so that you can make important organization decisions based on concrete information.
Which is best: Purchasing or Procurement Software?
You need to pick an approach based on your business’ unique needs. Every organization is different. Small businesses may choose purchasing with the intention of keeping the process simple. Enterprises may prefer a robust procurement process to make it a part of their entire corporate strategy.
With Bellwether, you don’t have to choose between purchasing and procurement. With our e-procurement solutions, you’ll have access to robust purchasing functions that allow you to manage your purchase orders more efficiently and effectively. That’s not all. Our software helps automate the entire procurement process so that your business can save time and money.
It’s clear; manual tools like paper forms and spreadsheets do more harm than good. They cost your employees time, which costs you money. The delay can also hurt the relationships that your business relies on to remain successful in the competitive marketplace.
Cloud-based procurement software improves productivity by standardizing the regulated processes of purchasing and procurement. Our software helps organizations shorten purchasing procurement cycles, improve collaboration, and ensure compliance.
Procurement Software and ROI
Many customers come to us worried that procurement software may cost them more than their manual processes. However, e-procurement software pays for itself, offering you an ROI in no time. With improved productivity and efficiency that it offers, you are actually saving money.
Think about your approval process and how long it takes for a purchasing requisition to be approved. You can set your software to approve specific criteria so that purchasing is easier and less time-consuming. If you’re worried about budget, your employees can easily see what’s in the budget and what isn’t with tools right on the screen. This will help get rid of any unnecessary requisition approvals that may reach upper management.
Your procurement software pays for itself and then some. You’ll be amazed at the savings once you implement an automated procurement process that helps optimize workflows and improve communication across departments. It can often be difficult for your accounting department to keep up with your purchasing department, leading to mistakes in budgets and other areas of finances. You can avoid financing errors that cost time and money with e-procurement solutions.
The Relationship Between Procurement and MRO Inventory Management
Procurement and inventory management go hand in hand. In order for your procurement process to be successful, you need to be able to manage your Maintenance, Repair, and Operations (MRO) inventory effectively and efficiently.
MRO purchasing includes those purchases necessary to keep the business running. In some cases, these purchases might include cleaning. However, in other types of organizations, such as a manufacturing plant, MRO purchasing will be made up of a significant number of different purchases. MRO items can include any of the following:
- Equipment Parts
- Maintenance and Upkeep Supplies
- Cleaning Supplies
With so many parts, products, and services in motion, any overstock can slow down production and cause unnecessary spending. However, a prudent purchasing manager should be able to determine which parts are used frequently and predict when they will need to place an order.
Procurement’s Role In MRO Inventory
Procurement software can help manage the regular purchasing of stock as well as MRO purchasing. It can be integrated with Maintenance Management System (CMMS) so that all the materials and maintenance contracts can be managed and the demand understood.
When it comes to the bottom line, there are certain situations that can lead to your business spending more on MRO than necessary. For example, if a part should be available in the inventory, but isn’t there because it has been used and not documented, you may need to purchase another part immediately. Now the request for the part has become an emergency and the purchase will be expedited. Both of these things cost you money.
Preventing Unnecessary Spending
If MRO purchasing requisitions and inventory are not tracked properly, spending can quickly get out of hand. You should be able to estimate what items your business will need and when. Bellwether helps you easily manage procurement for maintenance and MRO inventory. Our software helps control costs by enforcing approval processes and using negotiated pricing.
With Bellwether, you’ll also reduce the overall procurement time with access to supplier catalogs, streamlined PO issue, and expediting. Monitor your purchase orders from creation to completion with every delivery and payment.
Digital Procurement Solutions Any Time, Anywhere
Bellwether’s e-procurement software is not just available on computers. You can view real-time data on your mobile phone or tablet, no matter where you are. Our software allows you to check the status of purchase orders and requisitions even when you’re on the go. Your procurement process never needs to be delayed.