Purchasing Automation: Enhancing Efficiency in Procurement

Posted on Aug 17, 2023 at 12:08 PM

Purchasing automation is an essential part of streamlining procurement processes because automating your purchasing process can save time, reduce human errors and increase efficiency. 

But what is purchase automation? How do you automate a purchase? 

In this article, we'll answer these questions; tag along if you want more insights about purchasing automation and how best to start the automating process.

What is purchasing automation?

While the term purchasing automation is self-explanatory, the technology behind it is complicated. Purchasing automation may happen using automation software or a management tool to make a manual task happen automatically. 

But how does that happen?

If we want to understand how purchasing automation happens, we must first understand what types of tasks can be automated; here are a few: 

• Sourcing suppliers

• Processing the purchases

• Contract construction

• Calculating cost and payments

• Requesting requisitions

• Placing purchase orders

The next step is deciphering how companies create the automation process; here's how: 

Let's assume a business in the manufacturing industry wants to start a new line of production; this imaginary company intends to create the supply chain for that product. However, the manager finds many repetitive steps slow down the process, making the manufacturing process more straightforward and less efficient. 

Let's say this company wants to find a way to speed up buying raw materials. It is reasonable to look for a routine of repetitive chores and automate them using tools like SaaS or Kissflow. 

For example, if a company wants to buy raw materials for its products, it can use Kissflow to create a requisition form that employees will fill out when they need something from purchasing.

Afterwards, whenever a new purchase order is about to happen, the manager can send this form as an email attachment or embed it into an app like Slack. The condition usually asks for the materials needed and their cost per unit, which employees can easily find through the inventory.

This way, businesses can create workflows for each task and use purchasing techniques to find strategic ways to make operations digital and central without requiring intensive repetitive work for each workflow.

What are the benefits of purchasing automation?

If we wanted to sum up the benefits of purchasing automation in three main points: Savings, efficiency and data.

Let's discuss savings first: Purchasing automation helps businesses save money by taking away repetitive and manual work that takes up time and money. 

Now when it comes to efficiency: it's not hard to imagine how purchasing automation would increase efficiency, technologies all over the business world serve one unified purpose, making things more efficient, and the same applies to buying automation.

Last but not least: Companies can use purchasing automation to make more intelligent (and automatic) business decisions in the future because they would collect data about their past experiences and then use this info to improve a lot of decision-making.

How does purchasing automation help streamline procurement processes?

Procurement automation enables businesses to simplify the purchase cycle, improve the results and make it more user-friendly. All while reducing liabilities and enhancing productivity. 

But what does that have to do with procurement processes streamlining?

The more efficient a company is at vendor selection and buying and selling goods, the more profitable it will be. And that’s what procurement automation is. It streamlines the purchase process by automating tasks like tracking, negotiation and pricing, allowing the company to focus on other more critical parts of the production.

Leveraging technologies makes all this very easy, from sourcing a supplier to invoicing and payment, and it reduces the risk of human error that can cause problems with processing. 

How can enterprises leverage technology to streamline procurement processes? 

 There are several ways that enterprises can leverage technologies to streamline procurement processes. Here are some examples:

• Enterprise resource planning (ERP) systems are a great way to manage purchase needs. ERPs are great for sourcing, bidding, invoicing and payment processing. This is because they provide a central platform that allows you to access and control all the information and data about every purchase in one place.

• Cloud-based solutions can help companies streamline their procurement processes by providing teams access to all the data they need to tackle all procurement operations. 

• Education: The most crucial part of implementing new and improved techniques is teaching your team how to use them; for example, purchasing techniques training courses in London are an excellent way for CEOs to be sure that their employees are on top of their game when it comes to purchasing automation. 
  
  

Purchasing automation allows companies to go from manual repetitive operations to automated, time-saving ones. Using AI tools, new technologies, or any kind of software, your own business can automate the purchase process and create the best supply chain management today.