May 17th 2022 11:00:00 AM
Purchase Agent for Sage 100 Helps Your Manufacturing Business Achieve the Ultimate Procurement Goal
June 15th 2021 11:00:00 AM
Challenging to Look at Spending as a Whole
Many executives tend to look at areas where the company has to spend money as separate categories, as opposed to being part of a complete system. When money is spent in areas such as machinery, facility services, utilities, maintenance, repair, and operations (MRO), the amount adds up to a significant portion of the company budget.
A procurement team has a role to play in helping manufacturers manage costs. This means the company reaps the following benefits:
- Improved products and customer service
- More efficient use of available factory floor space
- Well-organized production
Rather than simply moving through the inventory “section” of the manufacturing company and deciding the best approach to controlling costs is to cut inventory investment to the bone and keep carrying costs down, there is another approach that can be effective. This is the ultimate procurement goal.
Manage your Procurement Instead of Focusing Only on Cost-cutting
We are not trying to tell you that cost-cutting should not be part of managing your procurement. It would be irresponsible not to hold costs within reasonable budgetary parameters. However, if the only focus is on cutting costs to the exclusion of developing good working relationships with suppliers who provide quality raw materials or are prepared to be flexible with “rush” orders when needed, then you may have developed a type of tunnel vision that is keeping you from managing your procurement.
What Happens When Procurement is Being Managed Appropriately?
When procurement is managed appropriately, your manufacturing business can take advantage of a number of benefits, including the following:
- Purchasing is centralized.
One department makes decisions about purchases for the company. This option allows for greater control and less waste due to duplication and over-ordering.
- Preferred suppliers can be identified.
Another advantage of better procurement management is that it allows your business to identify preferred suppliers for products and materials based on set criteria such as price, quality, and delivery options. The company can then make informed choices for future purchases.
- Suppliers’ processes can be evaluated for quality.
It is not enough to ensure that your own operations are quality-driven. Evaluate your suppliers to products and their processes to ensure their commitment to quality matches your own.
- Purchase supplies and materials locally whenever possible.
If your business can find local suppliers who can provide the materials and products you need—without compromising on quality—and at competitive prices, it makes sense to work with local suppliers. Your team can form close relationships with businesses close by and shipping costs will be reduced.
- Build long-term relationships with suppliers.
Once you can establish a pattern of regular orders with suppliers, it is possible to start negotiating better pricing. An open, honest relationship between your team and suppliers can also lead to better customer service during times when you are dealing with rush jobs and need to purchase extra materials on the fly, etc.
- Inventory carrying costs can be more easily tracked.
Your business should have accurate data on the cost to store inventory. This amount translates in dollars removed from the company cash flow until they can be converted to goods that can be invoiced to customers. Communicate your company’s forecasted needs for materials to suppliers to facilitate just-in-time delivery to minimize the need to overstock your inventory and keep costs down.
Purchase Agent for Sage 100 Manages the Procurement Process
Purchase Agent gives you the capability to manage your procurement process. It will help you to avoid shortages by ensuring materials arrive just in time. This software helps you to save time by performing the following functions:
- Performs Detailed Analyses
Before you start placing orders for materials, you need to have a baseline of where you currently sit in terms of your current supply and your requirements. Purchase Agent analyzes:
- Your orders
- Minimum stock requirements
- Current supply
- Quantities on a purchase order
The software creates a “To Do” list of materials that need to be purchased.
- Get Insights to Make Better Decisions
All information about your procurement needs is available in one convenient location. Your buyer can review the list, edit it as needed, and then take action on it.
- Make the Best Use of Cash Flow
Order only what is needed to fulfill orders or qualify for suppliers’ discounts. Consolidate items and orders to maximize purchasing power. Eliminate “rush” order fees by keeping supplies stocked at optimum levels.
- Streamline your Procurement Process
Purchase Agent makes procuring materials a more efficient undertaking. Generate a new purchase order with a single click.
- Fully Integrates with Sage 100 Work Order
Purchase Agent for Sage 100 integrates seamlessly with Sage 100 Work Order to assess items being manufactured from work orders as well as work order component requirements.
Look to Scanco for Innovative Software Options
Scanco is proud to play a leading role in the development of mobile warehouse and manufacturing automation solutions. We have been serving customers’ needs since 1989. During that time, we have focused our attention on providing innovative solutions that fit our customers’ unique needs.