The Biggest Procurement Problem & It’s Solution
Procurement is a crucial stage in production and must be done to perfection. However, many issues can plague this process due to internal and external factors. Sometimes, you may end up dealing with a poor vendor or may have to pay high prices for your materials. Many organizations face internal issues like poor communication, documentation, and incompetent processes.
How They Affect Your Costs
All of these issues can increase your costs. Additionally, internal problems can, in the worst cases, lead to procurement fraud too. Poorly planned processes can increase your operating costs by almost 5 times. Additionally, you may lose out on man-hours due to the inefficient functioning. Companies in the US and Canada lose about 32 million man-hours collectively every year due to this reason.
Solving the Problem
To solve this problem, you can use procurement management technologies. Using software, you can easily manage your procurement and also automate repetitive tasks. The streamlined workflow makes the process smoother, and software can also improve data accessibility. This would mean that you’ll save your man-hours by avoiding trivial tasks and the added transparency will help prevent duplicate payments and fraud.
To understand more about procurement problems and how you can solve them, refer to the below infographic by PurchaseControl.