Automation Potential in: Purchase Requisitions

low Potential to Automate:

Processes that are not repetitive

Medium Potential to automate:

Approval of purchases, Populate and send out purchase order

High potential to automate

Collate information, Ensure procedure is followed, Sending out and collating RFQs, Conduct three-way matching

today's Challenges

A purchase requisition is an internal document sent from employees to a central procurement department, who help to find/vet suppliers and oversee the ordering process. The purchase requisition acts as a control tool to ensure full scrutiny of requests before payment is made. It starts a paper trail which holds everyone accountable. Despite this, Purchase Requisitions are often seen unnecessary red tape and where this process may be slow to process internally, a number of problems can arise:

Uncontrolled Purchasing

A slow purchasing system may be seen as a barrier to business-as-usual and circumvented. Such uncontrolled spending can ultimately be expensive for businesses. When items purchased cannot be justified using capital outlay or material inventory, the resulting loss of revenue and control is a significant challenge for organisations of all sizes to tackle. Furthermore, procurement fraud is much more common than you might think. Poor communication between departments and lack of documentation can easily make any business susceptible to fraud.

Urgent Purchases

Many products/services are procured at the last minute but this can actually result in longer lead times in the procurement cycle as other purchases are put on hold. Urgent purchases often mean that robust due diligence on new suppliers cannot take place. It’s increasingly important to ensure that suppliers adhere to corporate standards and norms for ethical behaviour and sustainability, without proper vetting and verification of required standards/policies, the wrong suppliers may get work which can cause issues further down the line.

Strategy Lost

Where the purchasing process is seen as a “hoop to jump through” the true impact that key suppliers can have on your business may be lost. As the procurement process continues to become more strategic and collaborative, organisations are starting to realise the benefits of having a solid procurement strategy in place. However, understanding the strategic implications of every step and figuring out a way to implement it across all functional units of business is a distinct challenge.

There are strong opportunities throughout the purchasing lifecycle to automate aspects of the process and in doing so remove bottlenecks, ensure compliance and keep all stakeholders informed.

Automation impact Evaluation

Onboarding of vendors

RPA (Robotic Process Automation) is a technology which records the desktop actions of a person and then replicates them. It can log into emails, extract vendor documents, download and open them and then copy the information across into an ERP. Where vendor data comes in as PDF or a scanned document, OCR (Optical Character Recognition) can then read and digitise this data for faster processing. Once uploaded into an ERP, bots can then verify information that may be available online, for example a companies DUNS number and then email stakeholders where this information is missing or incorrect, for your team to then go and follow up.

Request For Quotation

From the buyer’s point of view, a RFQ is either done through email or perhaps through a supplier portal. Quotations are then often sent through in a variety of formats, often with a unique identification code applied by the vendor for the procurement team to evaluate. Automation can automatically gather quotes relating to the same RFQ, instantly take out the details and upload into an ERP and even compile a report as to which vendor represents the fastest turnaround or best price. You could also apply a weighting system to different skills/abilities your vendors have and so enable the bot to recognise the best vendors for this particular RFQ.

Monitoring of Vendor performance

Its possible to take data like delivery dates and defects to compile reports on the performance of vendors, but factors like customer service or helping out with an urgent enquiry are more difficult to turn into data and so would still require the manual feedback and management.

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