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The buyer's important role in a digital purchasing system

The purchasing role is a role that has changed a lot in the last ten years. One of the clearest changes is that buyers in many companies today have time to work with analyses, strategic decisions and the development of supplier agreements and business relationships via robust purchasing systems.

It is by taking the step from manual procedures to automation, digitization and streamlining of the purchasing processes that the purchasers have been given this opportunity.

With the right purchasing system as a tool - and with company management that understands the important role of buyers - buyers can contribute to increased sales, better profitability, reduced capital tied up and happier customers.

IMI Promosoft's customers are medium-sized companies whose core business is warehouse and distribution. The inventories are often large and our customers are found in many industries such as food, packaging, textiles, home electronics, furniture, healthcare and industrial goods. The buyers and inventory planners at these companies no longer work with Excel as a tool.

You don't have to spend time manually going through purchase orders and pondering what should be bought for the warehouse, and when it should be done. Their tool is instead our system SOLO, which helped them to streamline product planning, optimize stocks, save working time and increase sales.

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Free up valuable time in the purchasing department with an efficient purchasing system

"The buyer is the fastest route to increased profitability," read one article. We agree, and probably also many company managements who realized that buyers with the right purchasing system and tools are key people with great importance for both growth and profitability.

The effect often comes quickly when a company invests in digitization and automation of the purchasing process and inventory management. Inventory value drops, capital tied up decreases and service levels improve.

Automation and digitization of your purchasing system also means several positive effects for a purchasing department. The work becomes more uniform and is not governed by personal decisions about what you think should be bought in, but is instead based on statistics and forecasts.

When a buyer does not have to struggle with, for example, Excel as a working document, more time can also be spent on developing customer and supplier relationships, and optimizing stock levels.

The answers to tough management questions are often found in buyers' toolboxes

In companies that have not streamlined the purchasing processes with good purchasing systems, it is not uncommon for there to be a number of questions that constantly recur in the strategic discussions at management level;

  • Why are our inventory levels increasing, it ties up a lot of capital?

  • Why is the turnover rate falling?

  • Why do we sometimes have product shortages that cause us to lose sales and get dissatisfied customers?

  • Why are our forecasts so bad?

The answers are often found in the toolboxes that the buyers at these companies have to work with.

When the tools are traditional and time-consuming routines with Excel documents that control the ordering process and purchasing decisions are based on old order points, neither the purchasing process nor inventory control becomes efficient.

If it is also a company that is experiencing strong growth, the degree of difficulty increases as the number of articles keeps increasing. With manual procedures, it is often impossible for a buyer to know how much is to be purchased.

If the management also decides that the level of service should increase, the buyers get another challenge. For fear of ending up in situations with shortages, purchases easily become too large and without being able to detect it in time, stock levels increase to undesirable levels.

Indications that it is time to review the purchasing routines

When a company management is faced with the question of whether it is time to provide the buyers with better tools, the answer can be found in these indications;

  • Stock levels are increasing while the turnover rate is low.

  • Lost sales, and perhaps customers, due to stockouts when demand for certain items is high.

  • The level of service varies too much.

  • Purchases depend on the individual. No one has real control. There is no uniform purchasing policy.

  • The buyers have to spend most of their time on manual work. No time to work strategically. Emergency events and "putting out fires" dominate the work.

  • Buyers have problems managing varied demand.

  • The forecast accuracy is too low.

A review of current routines is often required

But what does it then mean to "do the purchasing work right"? One conclusion is that companies that want to develop their purchasing processes need to set new goals for purchasing activities. Often, a review of current routines and the support the buyers have in their daily work is required.

When a more profitable purchasing strategy takes shape, it usually means that a company has to take a big step; from cumbersome manual and person-dependent routines to streamlined processes through automation and digitization.

Automation with a system like SOLO often becomes a prerequisite when the goal is to ensure a purchasing strategy that provides effective purchasing control and an opportunity for buyers to work more strategically.

Promosoft can participate in the work with a review to clarify areas for improvement in purchasing and inventory control, and also the positive effects of automation! Contact us and we will tell you more about how we can help you with a better purchasing system.

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