How the Purchasing Department Benefits from ERP
Updated: Mar 19
Supervising levels of inventory, remaining aware of purchasing requests, and attempting to negotiate with vendors can make even the best purchasing head feel as though they exist in a continuous state of disarray. Custom manufacturing involves a lot of moving parts (literally)—and the purchasing department is responsible for ensuring all these parts are in the right place at the right time.
It’s sometimes easy to forget that amid all of the benefits your ERP can provide, an ERP can aid in streamlining the purchasing cycle, by making sure the right level of stock is readily available, and assist when handling the complexities of low-mix, high-variable manufacturing. An ERP will facilitate supplier management by making the procurement process straightforward, enabling you the ability to focus on more sectors and a more productive business.
Think of the effort and hours that go into purchasing: cataloging orders, inspecting inventory, generating tracking numbers, coordinating with suppliers, creating a purchase history, and so on. Since an ERP is incessantly overseeing your inventory levels in the backdrop of everything you do, you will be aware of what should be ordered to complete a job and what inventory you have at the ready. You will also be able to create a PO with one click—saving you time and streamlining the purchasing process. An ERP can also aid in keeping an eye on your purchase orders by itemizing them so that they can incorporate certain fields that cite certain items, and they can allow for various delivery dates to be stipulated. You will be better able to keep track of which parts are required for which jobs, and have a more organized purchase ordering system. With an ERP you can empower your purchasing department’s negotiating ability by aggregating POs, allowing you more capability to speak with vendors, and ultimately cutting down on costs.
Supervising your connections with suppliers is one of the more substantial duties a purchasing department needs to do. Using an ERP can assist in creating better relationships and enhance and streamline communications with suppliers. An ERP system will help you produce a useful supplier database—necessary for all manufacturers that request many parts from many suppliers. From addresses and names to materials and parts offered and tax identification data, your ERP accumulates and arranges all the supplier details you’ll require. You will always be confident that you have the right information about your suppliers, making it a breeze to submit orders. Utilizing an ERP to control your supplier back-and-forth will simplify the process: By using a purchasing portal that is completely integrated with your ongoing jobs and remaining inventory, you can make synchronized pricing queries for multiple items to multiple suppliers, and get rates from suppliers without needing to re-enter information. Using an ERP for inventory control also gives you a basis for more open communications, allowing you to offer suppliers better lead times, earlier warnings for quantity adjustments, and more reliable predictive modeling. It does not just make resource planning better, it also aids in building respect with suppliers.
Good supplier relationships need a degree of transparency. A thoroughly integrated ERP system will balance your buying processes, inventory controls, and sales requests with the capacities and competencies of your suppliers. This makes for clearer dealings and supports a better understanding of both parties’ business necessities, assisting you when creating stronger and more open connections with your suppliers.
With an ERP you will automate and streamline a lot of the purchasing processes and tasks, making you a more effective organization. Improving and automating processes saves time, increases productivity and improves relationships. For example, automating inventory management with an ERP lends a hand when keeping stock at the right levels and alerts your purchasing department when stock reaches a threshold, notifying you that new items need to be reordered—or can even automatically re-order the stock for you. ERP Inventory Management lets you trace by serial number and connect different statuses to materials so that certain materials can be accounted and allocated prior to the start of production. Improved productivity signifies better resource utilization, cost-savings, and potential business growth. The right ERP system can put you on the right track to success and give you the tools you need to help you streamline duties, leverage data instantaneously, and raise productivity.
To sum it all up: By having an overseeing eye and the ability to influence processes with the swipe of a finger, your purchasing managers will consistently be in the know—being aware of what parts need to be ordered to complete a job and which parts are readily available. Better inventory tracking and the capability to allot parts to jobs makes the purchasing process more streamlined and orderly. You will avoid production interference by removing unpredictable material shortages and restock based on genuine on-the-job demand or for inventory. And, lastly, at the swipe of a finger you can use mobile devices to do away with duplicate data entries, relocate material and oversee inventory. With this level of purchasing control in your hands, why wouldn’t you make use of an ERP?