Useful supply chain management practices don’t just happen. And if you want to get the most out of your business’ supply chain management strategy, you need to know what makes an effective one. Procurement software can help you optimize your supply chain management, but only if you use it properly.
This blog post will provide you with 10 tips on how to optimize your supply chain management with procurement software and make sure you get the most out of the investment you’ve made in this technology.
1. Determining whether your company is ready for eProcurement
As much as you want to be a digital-first company, there’s no rush—you shouldn’t jump into eProcurement software unless you’re ready, as suggested by tradogram.com. To determine whether your organization is truly ready for supply chain automation, ask yourself these four questions:
- Are you constantly searching for new vendors and contracts?
- Do your current contracts need to be renegotiated or extended more often than every couple of years?
- Are you spending a lot of time processing paperwork, responding to RFPs, and compiling monthly reports?
- Do you have ongoing conflicts with your suppliers over pricing or service level agreements?
If your answer to all of these questions is yes, it’s high time that you get procurement software for your supply chain management strategy.
2. Selecting a software solution
Selecting a procurement software solution is critical to your supply chain management. If you don’t do it right, you could hinder your ability to make smart decisions based on up-to-date data about your operations.
Before committing to a provider, ask what kind of technical support they provide and how frequently product updates are issued. Make sure also that all user groups in your organization will be able to use it effectively. Typically, procurement teams are designated as users in these situations.
3. Training your team members
Aside from keeping your procurement software up-to-date and on par with technological advancements, it’s also important to prepare your team members for any new addition to your company operations.
The better your team knows how to navigate supply chain management software, the more streamlined your business will run. Also, make sure all employees (including new hires) receive adequate training so you can improve efficiency, save time, and make smarter decisions in real-time.
4. Getting started
Say you’ve already chosen procurement software for your supply chain management. The next step is to get started by taking an inventory of your company’s current supply chain. To do so, refer to these guide questions:
- How many vendors do you use?
- What percentage of your business goes through your supply chain?
- Where are they located geographically?
- Are there any problems that need to be addressed?
It doesn’t matter if you don’t have all the answers just yet. What matters is that you start thinking about your supply chain in a strategic way and identify problem areas for further analysis.
5. Assessing and reporting performance
You may have a tendency to use supply chain management software solely for ordering and supplier performance purposes. However, procurement software like Coupa’s solution has many other functionalities that can help you assess your supply chain and how you’re using your inventory within it.
For example, you can use reports to assess how effectively your sales reps are using their budgeted allotments or if they’re falling behind in sales compared to previous months. You can also see if certain suppliers are taking longer than others to ship products, which could lead you to find new suppliers who will be more reliable.
It’s easy to forget about these different uses when you’re just trying to optimize orders. But, these tools provide valuable insight into how well your company is performing from top-to-bottom.
6. Maintaining ongoing success
It’s not always easy to maintain ongoing success for your supply chain management, but you can use procurement software to help you out. For one, supply chain management software can get you a handle on your data by using reporting tools that fit into existing accounting and business systems. You can also set clear goals for efficiency improvements by creating an open line of communication between your operations and procurement teams.
Other benefits of using procurement software for your supply chain include:
- Continuously monitoring delivery times from vendors to improve collaboration while maintaining a competitive pricing structure
- Utilizing smart bidding capabilities so that vendor selection isn’t driven solely by price
- Using forecasting tools with built-in visualization technology
- Developing a rigorous system to allow automated and nonautomated decisions
7. Focusing your ROI efforts on measurable outcomes
Although procurement software can help streamline your processes and eliminate redundant tasks, it’s important to focus your ROI efforts on measurable outcomes. If you measure how many hours your team spends on spreadsheets each week, you’ll be able to calculate exactly how much money is saved by using procurement software instead. Plus, measuring outcomes will make it easier to report back to stakeholders and top executives that procurement software is worth the investment.
8. Measuring success by customer satisfaction
For supply chain management, you can measure success by customer satisfaction by installing a feedback mechanism that captures comments and satisfaction ratings from customers. You can even incentivize your customers to take part in these surveys and increase their participation by offering discount codes or other rewards.
Reviews aren’t just helpful—they’re essential if you want to ensure quality service. Hence, if you want to evaluate customer satisfaction, you should include a review system in your procurement software.
9. Conducting regular supplier evaluations
Do you want to evaluate your suppliers on a regular basis through procurement software? The first step is to research who you currently source from and why. Then, look at past orders, customer reviews, and sales growth trends over time. Once you have a solid understanding of what you’re getting from your current suppliers, it’s time to start sourcing new suppliers that are more efficient or can offer greater value for your money.
10. Continuously improving your supply chain management
To improve your supply chain management, you need to take into account all of its factors. If you don’t consider everything that affects your supply chain, you can miss out on many opportunities to save money or make more profit. For example, if your company currently uses three suppliers for one item but could use only two or one, using procurement software is a good way to find out.
Summary & Takeaways
Procurement software can help you reach your goals faster and streamline your operations to run more smoothly. The key to using this technology successfully, however, lies in knowing how best to implement it. Whether you’re managing a retail operation, manufacturing goods, or running an office, follow the best practices above and optimize your supply chain management with the best software for maximum efficiency.