Previously in our ‘Moving from Purchasing Thinking to Procurement Thinking’ series, we explored the concept of procurement thinking<\/a> and discussed priorities, challenges, and trends impacting procurement professionals.<\/p>\n Now, we’re asking the big question: Is your business ready to take its purchasing to the next level? How do you know it’s time?<\/p>\n More and more business owners are aware of procurement’s strategic importance, yet many struggle to identify disorganisation and inefficiency in their purchasing processes. These inefficiencies result in a waste of time, resources, and money – longer term, these costs add up to significant financial and reputational losses.<\/p>\n Below, we have compiled a list of common issues businesses experience when their purchasing and procurement operations, processes, and systems are affected by inefficiencies and resource waste. These common problems signify deeper bottlenecks, which might be caused by a single computer, system, person, or an entire department.<\/p>\n Every hour lost to a bottleneck translates to an hour your business falls behind. The good news? With the right approach, you can level up your purchasing, clear blockages, and reclaim lost time, money, and resources. Let’s get started.<\/p>\n In today’s business environment, things move fast. An efficient and streamlined procurement process is crucial for success. However, many businesses still rely on traditional, manual-based approaches to sourcing, procuring, and selling goods and services, which can lead to a range of common purchasing system and workflow problems. These could signify a business’s readiness to evolve its approach to purchasing.<\/p>\n Here are some of the most common indicators that you are ready to adopt procurement thinking:<\/p>\n Does any of the above sound familiar? It’s time to implement a procurement thinking approach. A well-designed procurement process gives you more control over purchasing, allowing your business to plan and forecast its spending accurately.<\/p>\n <\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.20.2″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.20.2″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.20.2″ _module_preset=”default” global_colors_info=”{}”][et_pb_image src=”https:\/\/precisebusiness.com\/NL\/wp-content\/uploads\/sites\/3\/2023\/03\/FINAL-Take-purchasing-to-the-next-level-.svg” title_text=”FINAL – Take-purchasing-to-the next-level” align=”center” _builder_version=”4.27.0″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_image][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.19.1″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.19.1″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.19.1″ _module_preset=”default” global_colors_info=”{}”][et_pb_text admin_label=”Text” _builder_version=”4.27.0″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}”]<\/p>\n Manual purchasing processes can be incredibly costly for businesses, impacting their bottom line and leading to delays and other inefficiencies.<\/p>\n We recently conducted an in-depth analysis of a medium-sized manufacturing and fabrication business to understand how their manual procurement process impacted their operations. Our findings show that their manual process significantly contributed to delays and higher production costs. In particular, we evaluated their Purchase Ordering process and identified several manufacturing bottlenecks driving up expenses.<\/p>\n Let’s look at the details.<\/p>\n First, the business had nine different steps in its manual Purchase Ordering process, and each step had significant inefficiencies. The purchase requisition creation and approval process for approximately 300 purchase orders a month was disorganised and time-consuming, with multiple layers in the approval chain that pushed out delivery times.<\/p>\n Additionally, approvers could not approve a purchase request when they were not in the office, and the requestor was unable to see where the request stood in real-time. Once the purchase requisition was approved, the purchase order had to be manually created and sent to the supplier, adding further time delays.<\/p>\n Furthermore, the current process prevented someone from receiving their own order, which burdened the receiving dock. In addition, purchase orders were not consolidated, giving the business little leverage to qualify for quantity discounts from suppliers.<\/p>\n Next, we wanted to calculate the actual cost of these inefficiencies. We analysed the total cost of Purchase Ordering for this business, including the people involved in the process, the salary of those people, their time spent on each purchase order, and the average number of purchase orders per month. We found an inefficient Purchase Ordering process costs this business around $172,000 a year – or a staggering $860,000 across five years. These figures could be similar in your business.<\/p>\n The Purchase Ordering process is just one element of procurement. When combined with the cost of performing other business functions within the current procurement framework, inefficiencies and manual handling had a major impact on the business’s bottom line.<\/p>\n Precise recommended digitalising, streamlining, and automating the business’s manual procurement processes through Enterprise Resource Planning software with integrated requisition management tools to address these inefficiencies. This approach resulted in meaningful efficiency gains and resource wastage reductions, enabling the business to take its purchasing to the next level.<\/p>\n [\/et_pb_text][et_pb_text admin_label=”Text” _builder_version=”4.27.0″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}”]<\/p>\n Book a Discovery Call<\/a>\u00a0with our ERP expert in the Benelux region to learn more about how an ERP system can transform your business.<\/p>\n Subscribe to our LinkedIn Newsletter<\/a>\u00a0and get alerts when we post about topics that matter to you.<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" A business’s ability to embrace a strategic and systematic approach to sourcing goods and services results in many advantages. But how do you know if your business is ready to take purchasing to the next level and embrace a procurement mindset? And, how does procurement technology fit into the picture?<\/p>\n","protected":false},"author":407,"featured_media":32999,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"on","_et_pb_old_content":" Thirty-five days. Just over one month. That's all the time you have to submit the first aged care provider Quarterly Financial Report (QFR) after\u00a0the end of the July-September quarter.\u00a0<\/span><\/p>\r\n It might seem like a long lead time, but extracting and compiling data across many different business areas is time-consuming - especially if you don't have a single source of truth to tap into or a system that connects all business processes and enables automatic extraction of relevant data.<\/p>\r\n Instead, what lies ahead is hours and hours of manual data collection. You will need to check and double-check for human error. You will need to gather in-depth information from HR, Payroll, Operations, Governance, Facilities and Asset Management, IT, Food and Nutrition Services, and Finance. You will need to sift through reams of spreadsheets to extract the information you need. The thought of it is mind-boggling.<\/p>\r\n Your current processes only add to the complexity. They don't allow you to capture all the information required to meet stringent accountability, reporting, and record-keeping obligations, let alone the quality of care compliances tied to funding.<\/p>\r\n You've got 35 days, but you've done the math, and your quarterly reporting requirement could take four weeks to compile. To make matters worse, you are already operating with limited staff resources, and the extra admin work introduced following the Aged Care Reform<\/a> has left you struggling with the new pressures.<\/p>\r\n The future is overwhelming. Once this reporting period is finished, there's little time before the entire process is repeated. There is, however, a silver lining.<\/p>\r\n The data-gathering process will reveal a goldmine of information you can use to shape a business case for investing in improvement measures. An easier approach is needed - there's no denying it - and you've decided an ERP software system could be the answer. The right ERP<\/a> will equip your organisation with the tools needed to produce compliance reporting, pull together reporting data, and increase productivity and efficiency. All this equates to significant time and money savings.<\/p>\r\n A single source of truth is not a pipedream. It can be a reality. Here's why the new Aged Care QFR doesn't have to be a taxing time.<\/p>\r\n <\/p>\r\n The QFR has five distinct sections:<\/a><\/p>\r\n Residential aged care providers must submit four of the five sections, including the viability and prudential compliance questions, quarterly financial statements, residential care labour cost and hours reporting, and quarterly food and nutrition report.<\/p>\r\n Home care service providers must complete three of the five sections, including viability and prudential compliance questions, quarterly financial statements, and home care labour cost and hours reporting.<\/p>\r\n How difficult and time-consuming the reporting process is will depend on several factors, one being how you store your information. If you data is not stored in a unified systems, or can be easily extracted and consolidated into a central data store, you will have to invest more resources into your QFR process.<\/p>\r\n For example, you may have to draw from several source pools, including your CRM, payroll and accounting software, project management tools, and human capital management. If you can't easily navigate these tools yourself, you'll need to speak with various area managers and wait for them to response with the correct data.<\/p>\r\n From there, you'll need to collate the data, read through the information, identify relevant insights, and manipulate the data into spreadsheets. then, you'll need to double-check that you've entered everything error-free and that your formula's are working as they should be. Finally, you can submit the information to the department's online portal.<\/p>\r\n All government-funded aged care service providers must meet the Aged Care Quality Standards.<\/a> The QFR is one aspect of ensuring your organisation meets these stringent regulations. Even if human error is to blame, failing to provide accurate information can have far-reaching consequences, including:<\/p>\r\n Many of our prospective customers have shared business inefficiencies, challenges, and pain points with us, all of which have impacted their ability to generate accurate QFR's. So as you undertake your reporting tasks keep an eye out for the following. These are tell-tale signs your organisation is in need of a systems refresh.<\/p>\r\n The above pain points are all too familiar and investing in a system transformation is the only way to change things. If you feel compelled to present a strong business case highlighting the time and cost savings an ERP could deliver, here are three tips to sharpen your business case and secure buy-in for change:<\/p>\r\n Need help formulating your business case for a new ERP system? We can help.<\/p>\r\n Precise Business Solutions have extensive aged care industry-specific experience and purpose-built software to meet your unique requirements. We can help you find which parts of your organisation that are starting to hinder your efforts to grow. In a one-to-two hours hands-on workshop, we can help you uncover the root cause of your critical business challenges and lay the groundwork for project success. The best bit? It's absolutely FREE of charge.<\/p>\r\nCommon Indicators Your Business Is ‘Procurement Thinking’ Ready<\/strong><\/h2>\n
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How Costly Can Manual Purchasing Processes Be?\u00a0<\/b><\/h2>\n
Procurement Technology to Solve Inefficiencies<\/strong><\/h2>\n
Inspired to Act?<\/strong><\/h2>\n
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<\/a><\/p>\r\nWhat Information is Needed for Quarterly Financial Reporting?\u00a0\u00a0<\/strong><\/h2>\r\n
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How Difficult is it to Produce and Submit the Required Reports Manually?\u00a0<\/strong><\/h2>\r\n
What are the Risks of Reporting Manually?\u00a0<\/strong><\/h2>\r\n
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Take Note if you Experience These Manual Reporting Pain Points\u00a0<\/strong><\/h2>\r\n
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Three Tips to Improve Your Business Case for a Transformation\u00a0<\/strong><\/h2>\r\n
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Start Building Your Business Case to Drive Change Today\u00a0<\/strong>\u00a0<\/strong><\/h2>\r\n