Optimize your workflow with procurement automation
Whether it's process optimization or minimizing spend, procurement leaders have traditionally under-prioritized indirect materials in favor of direct materials. This is primarily due to the overall impact on the budget as well as the complexity in the buying process and supply chain of indirect materials.
While taking the time to truly optimize a business's indirect materials procurement workflow can have a big payoff, it can require an organizational shift in thinking. Leaders must be open to new solutions and technological tools that can streamline workflows and manage the entire process – giving them the insights they can action.
An automated procurement system is necessary for businesses to overcome the hurdles presented by a manual process and fully realize the opportunities for cost savings and improved operational efficiency.
With intelligent automation, the right procurement software can deliver a distinct advantage by integrating the following into your department:
- process optimization
- strategic sourcing and spend
- supply chain management tools
This enables you to streamline and automate your workflows while discovering hidden cost-savings opportunities in your indirect materials spend.
What is automated procurement?
Traditionally, a manual procurement process is time-consuming, labor-intensive and does not lend itself well to minimizing expenses, increasing efficiency and evaluating vendor performance. This is especially difficult when spend is spread across a diverse supplier network and indirect procurement is not managed at an item level.
Not only does this impact operational efficiency, but without a centralized procurement department or platform, businesses can also wind up purchasing duplicate products across disconnected departments.
Automated procurement systems are software tools designed to optimize the entire process. When you work with DSSI, we start by benchmarking your current spend information to see opportunities for cost-savings. Then, you can use our Dynamic Procurement tool to receive your benchmarked results and see exactly how much you could be saving when you work with us.
When it comes time to purchase, we manage an extensive catalog of items from trusted suppliers; then negotiate pricing on behalf of our large client base to ensure that you receive high-quality products at a consistently competitive price. As a single vendor managing numerous sub-suppliers, DSSI also consolidates all of your purchases from each provider into a single invoice, automating your workflow and increasing accounts payable efficiency.
Regardless of the industry, the indirect procurement function plays a vital role in every business. Automating processes not only makes this more efficient and cost-effective, reducing repetitive tasks, but it also frees up time for your team to focus on more critical tasks that require a human’s complex problem-solving skills.
The challenges of manual procurement
In a competitive landscape that is rapidly turning to digital solutions, maintaining an advantage over competitors requires businesses to leverage every tool at their disposal. Despite this, many companies continue to rely on the manual process of paper-based workflows.
However, before a business can utilize automated procurement to build value and strengthen its bottom line, it's important to understand the three primary challenges associated with traditional processes.
- Lack of spend visibility: Indirect spend visibility is often opaque due to fragmented vendor networks and disconnected departments. Teams need to be able to monitor the entire process of indirect procurement to optimize it and identify opportunities to save money.
- Inefficiency and errors: Manual procurement is a tedious process with little consistency in the buying process. This leads to inefficient time usage, increased overhead costs and complicated invoices – all of which result in errors and wasted time.
- Sourcing and supplier relationship issues: Typically, procurement organization is reserved for direct materials vendors, meaning they're prioritized for things like customer service and strategic sourcing. Companies are missing out on cost-saving opportunities by not focusing on building strong relationships with their indirect suppliers.
Why your business should automate its procurement workflow
While every business is different, they all want to boost operational efficiency while minimizing costs. Procurement automation software provides you with the powerful and immediate benefit of indirect procurement optimization throughout the entire procure-to-pay process.
It helps reduce human error and leverages category management combined with advanced analytics to identify strategic sourcing options in compliance with your organization's rules, policies and financial parameters.
The best processes for procurement automation
To take full advantage of your procurement platform, there are a few processes that are ideal for automation.
- Benchmarking spend info: Quickly understanding what is being purchased across your enterprise and at what price points is a historically difficult task due to poor data. By employing new AI-based spend analytics tools, you can automate the process of analyzing thousands of materials based on item characteristics, brand names and spend categories.
- Sourcing: Traditionally, this process involves extensive research, evaluation and negotiation with potential suppliers across various platforms. It’s characterized by significant back-and-forth communication, which can lead to information loss and delays, impacting the efficiency of sourcing operations.
A procurement automation platform creates a centralized communication hub for interacting with suppliers, comparing bids and managing sourcing-related documents. They leverage product-driven insights, such as price comparisons and delivery timelines, to facilitate the selection of the most suitable supplier. This automation not only streamlines the sourcing process but also enhances decision-making, ensuring that you can efficiently and effectively meet your sites’ needs.
- Maintaining records: For historical and compliance reasons, it's critical to keep accurate records, particularly contracts. This traditionally paper-based method is prone to errors and files can easily go missing. An automated procurement tool solves these issues and boosts operational efficiency with a centralized database for financial reporting.
- Managing invoices: A diverse supplier base can help businesses find the best costs, but manually managing multiple invoices and purchase orders can be a daunting task. Procurement software can automate this process and consolidate suppliers into a single invoice for each payment term, reducing the manual workload of setting up and paying suppliers.
The benefits of procurement automation
Procurement automation can deliver a competitive edge to any company, regardless of the industry. With an automation software solution, businesses can streamline and optimize all aspects of indirect procurement, significantly improving the efficiency of their process while minimizing costs.
Here are just a few ways procurement automation can benefit your business:
High-quality products: Customers are often used to buying certain products from specific manufacturers. However, when these items are no longer available, it can be difficult to find equivalent alternatives.
Whether your favorite product was discontinued or disappeared due to supply chain disruptions, DSSI has extensive knowledge of buyers and supply bases and a vast inventory of quality products to help you find the perfect replacement.
Improving visibility for spend management: Visibility into spend history is essential to properly manage procurement processes, including things like purchase order history, supplier quotes, contracts and more. Procurement automation solutions provide a consolidated view of historical expenses to help you drive informed decisions.
Promoting a better supplier relationship: Building a strong relationship based on transparent communication with your supplier base is critical to supplier relationship management and prospering as a business.
Procurement automation platforms make it easy to track purchase orders in real-time, facilitating accurate communications between buyers and suppliers. It also enables procurement professionals to evaluate individual suppliers based on performance, ensuring optimal costs for your business.
Centralizing data for contract management: When dealing with multiple suppliers, it can be difficult to manage all of the contracts, even when the terms and conditions remain the same.
Procurement automation software centralizes all of your procurement and contract data. These solutions make it fast and convenient to find the data you need, onboard new suppliers and ensure compliance with critical guidelines across your contracts.
Boosting operational efficiency and productivity: Automating procurement processes means reducing the time and money spent on repetitive and redundant manual tasks. When employees are freed from these functions, they have more time to focus on higher-value tasks and strategic initiatives.
On top of increasing operational efficiency, procurement automation software also makes it easy to access necessary information from a centralized data repository. This data can then be used to drive decisions that focus on improving overall productivity.
Automate your workflow with DSSI’s Epic® e-procurement tool
Intelligent automation begins by quickly understanding how competitive your pricing is in the marketplace. DSSI’s Dynamic Procurement platform allows you to easily load your data into a self-service portal and receive quick and actionable insights into where your organization could be saving money.
Once savings opportunities are identified, DSSI category managers conduct competitive bidding events on your behalf using our mass bidding tools and create a custom e-catalog for your sites within Epic®, DSSI’s web-based e-procurement tool. Once complete, your requisitioners can access Epic® directly or through an ERP interface to help you optimize your entire workflow process from beginning to end. DSSI buyers assist with daily transactional service, supporting the RFQ,spot buy and delivery follow up processes.
Lastly, DSSI consolidates all purchases into a consolidated invoice to ensure reduced workload on the accounting side and visibility into every purchase at the item level.
Users receive expert category management for strategic sourcing and supplier relationship management, support with daily purchasing activities, standard payment terms across hundreds of suppliers and cutting-edge analytics ,powered by artificial intelligence, for increased spend visibility.
From strategic implementation to seamless transaction processing and supplier payment, DSSI can help you automate your process, saving your business time and money while significantly increasing operational efficiency.
Want to learn more about how you can take your procurement automation to the next level? Download our eBook here.
