Okay, we all know that there are levels of efficiency and that if you have inefficiencies going on now, things won’t be fixed overnight. Efficiency requires process streamlining, documentation, optimization, naturally automation—and also just getting a real grasp on your current status.
Being honest about what you need to improve and how you stack up against your competition is a good start. Honesty involves understanding what all of your business units require, having ways to identify suppliers that can meet your top requirements, a look at how you negotiate contacts for ultimate value, and a way to evaluate what you’re doing on an ongoing basis.
Three ways to achieve greater efficiency
Jump on the digitization bandwagon
The pandemic pushed many companies kicking and screaming into digitization much faster than would have happened without it. Digitizing processes enables faster insight – giving you a chance to do more of something or eliminate it quickly when it’s not working.
There’s no excuse not to move to digital. Doing so means eliminating manual transactional processes, providing easier access to procurement services. For example, reduce the cost of purchase orders by enabling vendor self-service capabilities for invoice entry, providing guided buying and PunchOut and mobile requisition and approvals. In addition, easily monitor open orders. The use of e-procurement software slashes cycle time sometimes as much as 2/3.
Harness the cloud
Cloud-based sourcing and supplier management tools can enhance collaboration, streamline processes, and provide accessibility anytime, aggregating information quickly and increasing efficiency. More agile spending and supplier management can improve your organization’s cash flow, minimize risk, and ensure business continuity—all critical capabilities, particularly in a downturn.
Using a cloud-based platform, your procurement practice can provide internal stakeholders and partners with timely, forward-looking analysis that empowers them to make better decisions, explore more scenarios, and support a continuous, agile planning model.
Cut your budget or cut your waste
Cutting expenses is a part of smart business. But cutting can realistically isn’t enough and can even be a self-defeating exercise. Properly managing expenses involves such things as:
- Sufficiently monitoring vendors–a necessity to boost efficiency and profits while reducing inventory costs
- Make routine purchases with vendors where there are pricing agreements which usually translates into lower prices and fewer errors.
- Decentralize the requisition process
- Empower the procurement department
- Identify where spending is undermanaged or improperly managed in your organization.
Sometimes, what’s needed is a change in mindset. Stop reacting and lead. Take a more proactive approach. For example, if you were putting your organization together today—what would that look like? What would you streamline? What would you emphasize? Where would you automate first? How can you take advantage of the cloud? Take small steps if you need to.
Move data in a continuous and logical flow between your departments, including finance and planning. Collaborate where you can, empower, and implement steps to increase accuracy and flexibility—all of these are aspects of efficiency. And be nimble in making changes to maintain that greater efficiency once you’ve harnessed it.