In an era where speed, accuracy, and flexibility are paramount for successful supply chain management, the reliance on manual processes can significantly impede efficiencies. The negative impact can manifest in various ways, ranging from increased operational costs and errors to jeopardizing the timely delivery of goods and services. Below, we break down the impact of manual processes and their potential consequences:
1. Purchase Order Never Gets Sent
Use Case: Your team has to process thousands of orders each month/quarter and because they have to manually email each PO to every supplier, they forget to send some orders. You cannot receive what you do not order
Business Impact: Order never arrives and this could cause a production shutdown or an increase in shipping costs because you have to expedite an order. Customer orders could now be delayed leading to customer retention and/or satisfaction issues.
2. Incorrect Data Entry into ERP
Use Case: A price change occurs between you and your supplier, yet the ERP is never updated or the wrong price is entered.
Business Impact: Forecasting will be incorrect. The invoice your supplier submits once the order is completed will be different from the information in your system of record which is your ERP. Accounts Payable will have to deal with this error, causing friction between their team and procurement. In addition, payments to your supplier will be delayed until the error is corrected, damaging relationships.
3. Out-of-Date or Missing PO Status Update
Use Case: production, inventory management, sales, planning or other departments call into the procurement department to find out the latest status of a PO. The buyer searches through their email to find one and cannot, so they then prioritize calling and emailing the supplier to find out the status. They receive a status update saying the order is on time and provide it to Production, yet two days later the supplier encounters a delay, never informs you, and the order does not show up and no one is informed.
Business Impact: Production shutdowns, customer orders are delayed and costs are higher than projected.
4. Purchase Order Never Acknowledged by the Supplier
Use Case: PO was sent but never acknowledged because the Supplier PO request was unseen, lost or ignored by your supplier.
Business Impact: If the order does not arrive, this could cause a production shutdown or increase in shipping costs because you have to expedite an order. Customer orders could now be delayed, leading to customer retention and/or satisfaction issues.
It is evident that automation and digitalization are imperative for organizations striving to remain agile, reduce costs, and enhance overall supply chain resilience. Automated systems like Leverage ensure that purchase orders are sent consistently, prices are accurately updated, status updates are readily available, and supplier acknowledgments are tracked. This can lead to cost savings, improved supplier relationships, and better customer service, ultimately enhancing overall supply chain performance.
Want to learn how Leverage can help your team automate your operations and achieve visibility? Schedule a demo today.