Purchasing, just a need or the backbone of an organization?!

Purchasing, for most companies, is part of their everyday business, but sometimes the process can run in an inefficient way. What is purchasing actually and how can it be done efficiently?

In the literal sense, purchasing is the process a company uses to obtain goods or services in order to accomplish its objectives. In purchasing it is also monitored whether what had been bought meets the standards. Next to this, it is also checked whether the suppliers are still delivering according to the terms and conditions agreed in the original contract or new sources need to be found. This process together with all the administrative work involved is called Procurement.

Purchasing departments help keep organizations healthy. 

Purchasing departments help keep organizations healthy, because if they are unable to procure goods or services that are needed to meet operational needs while providing the highest possible value, then a company cannot deliver the best quality to their customer. Inefficient purchasing can cause increased costs, interrupted production, inconsistency, and overall delays. This makes it clear that purchasing needs to be done in an efficient way, but how can that be done? 

The procurement cycle is shown in the picture above. The process starts with determining material requirements from the planning side. From here onwards communications with different vendors can start. Monitoring is very important in this process. One of the main questions is: are the ordered materials on-time? After successfully receiving the orders, the payment processing can begin.

This whole process can be done in an efficient and automatic way within SAP. Special procurement, such as dropship, stock transfer using stock transport order or subcontracting is also available within the ERP system. SAP contributes to streamlining the full procurement process, offers adequate, simple and quick framework while all steps of the process is documented in detail, but not excessively over documented. The system ensures that all performed activities are fully value-adding, it enforces quality requirements and enhances collaboration between different parties. 

InfinITy consulting is specialized in different areas within SAP. Combining our process knowledge with our data science expertise, we can guide you in how to log, monitor and improve your processes in order to ensure that they are running smoothly and in the most efficient way. Do not hesitate to contact us if you would like to have more information about what InfinITy Consulting can do for you!

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