Bottlenecks are a thorn in your side. Why do you think your purchasing processes aren’t effective? Making errors are part of the human learning process. It’s a natural process that makes a human being stronger over time. However, in business, this is not such an effective quality to have. To bridge the gap between you, more efficient and effective processes, and natural human error, you need to implement better working methods to streamline.
According to a study done in the 1980s and 1990s on human error in business, a lot fewer mistakes were made in the businesses that put working processes in place and enforced these working processes as a routine than those that did not.
You have to realize that you ardently and vigorously need to put standardized processes in place to avoid high failure rates and poor performance.
Statistics on human error
A 2008 white paper titled ‘Counting the Cost of Employee Misunderstanding’ from global analyst firm IDC, examined employee misunderstanding and its financial impact on 400 businesses in the UK and the US with more than 5000 employees. It established that 23% of employees do not understand at least one critical aspect of their job. On average, businesses with 100,000 employees are each losing £31 million per year, equating to approximately £315 per employee, whilst the estimated overall cost to US and UK businesses is £18.7 billion.
A Human Reliability Assessment done by Kontogiannis, T. and Embrey, D. states that, on average, about 80% of industrial accidents are caused wholly or partly by human actions. In Kletz’s book, An engineer’s view of human error, he includes examples of accidents caused by the various types of human error. They collected the following data of failures due to human error in different organisations:
- 20-53% of failures of the U.S. Air Force missile system,
- over 90% of air traffic control system errors,
- 82% of production errors in one un-named company,
- 50-70% of all electronic equipment failures,
- 25.8% of maintenance malfunctions.
Further to this, 20% of defects are missed by inspectors who are specifically looking for them and the U.S. Strategic Air Command claim that 16% of all critical events are made worse by human intervention.
No matter which way you look at it, getting good running processes in place should be your highest priority to making your business a successful one.
Streamline Your Purchasing Process
Good purchasing processes are undervalued when it comes to running an effective business. It usually gets assigned to a junior staff member OR every employee just purchases what they need at the moment from any supplier that doesn’t necessarily give the best deals or lacks good customer service.
You need to make your organisation more efficient and effective by employing faster or simpler working methods. You can’t afford to waste your capital/revenue on errors that can be overcome.
Purchasing needed products or services should be an easy task. There is a need, there is capital, and there is advanced technology to contact suppliers easily. Plus, if you give exact specs there shouldn’t be any hassles. Instead, you are faced with mountains of worry every time the word ‘spend’ is mentioned. If you are like me, you would prefer to spend your time making sure your projects run smoothly and not have to worry about where your funds are going missing.
Spend Control is the term given to all the processes that an organization uses to manage its expenditure, including all forms of procurement and expenses.
How do you know if your organization needs Spend Control?
Some key performance indicators to help you determine if you need Spend Control:
- Are more than 20% of your suppliers redundant or inactive?
- Is actual/budgeted variance on indirect expenditure greater than 10%?
- Do more than 5% of suppliers’ invoices require troubleshooting or clarification?
- Are more than 5% of purchases made without proper management approval?
- Do you struggle to analyze spend by vendor, cost centre, commodity, etc.?
Being pressed for time when working on a project is a daily struggle. There are tight deadlines set by customers, there are problems that arise that need immediate attention and important meetings to attend.
With such a rigorous planning schedule there is hardly any time or even energy left to keep track of all the expenses and all the people that have to make purchases.
Automating Your PO System
Introducing our PO app to your project will help your company achieve sustainable growth through efficient spend management. Procurementexpress.com puts the ‘easy’ back into your spending process. It controls the spending while you focus on other aspects of your business.
How does the app achieve this? Well, these are a few ways:
- You never have to wonder what has been spent on what and by whom.
- Reports are updated in real time and can be downloaded at any time.
- Vendor management – so your team can’t use suppliers you don’t like.
- You can view the budget remaining per project before purchases are approved.
Another very important quality the PO software brings to your processes is approval routing. Getting approvals for anything in a company can be very frustrating. In order to get a signature on a purchase order form you literally have to stalk the related executive, whereafter it still has to go through more than one department before the purchase can finally be made.
There are a lot of purchases that have to be made, and mistakes are not uncommon. Statistically, 1 out of 10 purchases contains some kind of mistake. Therefore, it is important to know what is happening in and around the project at all times.
How does the app help you with your daily dilemma’s?
- With the automated app, approvals are quick and all the information needed to approve the PO is right there in one convenient place.
- All purchases are run through a set approval routing process, whereby managers who make the decisions can approve all purchases with the click of a button.
- Because it’s mobile it allows you to review all purchases before they happen where ever you are
- Approval rules can also be set per budget and project
“Almost all quality improvement comes via simplification of design, manufacturing, layout, processes, and procedures.” – Tom Peters, American writer on business management practices, best known for In Search of Excellence.
Customer service is the support you offer your customers — both before and after they buy your product — that helps them have an easy and enjoyable experience with you. It’s more than just providing answers; it’s an important part of the promise your brand makes to its customers. And it’s critical to the success of your business.
It’s often said that it’s cheaper to keep existing customers than to find new ones. This is a very true statement – bad customer service is a key driver of customers turning away from your business. The quality of customer service provided can make or break your reputation.
Procurementexpress.com Customer Service Ninjas are awesome, available 24 hours a day, and offer bespoke development services.
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Making the change is easy and your business can enjoy major benefits, i.e. reduced cost, increased processing speed, reduced errors and improved relationships with suppliers and customers.
What are your views on automating your purchasing processes? Get rid of the paper-trail hassle with inclusive online reporting that eliminates fraud.