Digital Solutions Are Transforming How We Manage Procurement
By: Dan Kloes
Manager, eCommerce Solutions, W.W. Grainger, Inc.
With budgets under more scrutiny, tools aging and inventory constantly over or under-stocked, facilities teams are facing more pressure than ever. Investments in digital tools and processes can reduce this pressure by cutting waste and streamlining complex procurement processes in any facility. If your facility features multiple teams and buildings or more than one process for shopping, ordering and managing inventory, digital solutions may be the right tool to transform your procurement.
eProcurement is one digital approach that facilities teams can use to simplify procurement. Through a single punchout to shop and order, technology to automate approvals and budget, and a mobile-first approach, eProcurement solutions can reduce handoffs and overstock while freeing up time to get procurement done.
Large and Small Procurement Teams Face Mounting Challenges
Often with multiple buildings, tight budgets under more scrutiny and legacy processes that mix many different teams and tools, larger facilities face unique challenges. If these facilities do not maintain productivity and compliance without undue procurement complexity, they can easily overspend and underprepare. Even with a single process, multiple responsible parties can mean dozens of steps from shopping to approval for even small, frequently ordered items. With maintenance, repair and operations (MRO) accounting for 15% of a company's annual spend, and 90% of that spend happening on items ordered five times or less a year, managing the process manually can be extremely demanding and wasteful (1).
Even in smaller facilities, the problem can be a burden on budgets and efficiency. Conflicting processes and confusing tools can take root, leaving facilities teams struggling to stay compliant. Productivity drops and redundancies become common, with some orders demanding 30 steps, six handoffs and three people on average to fill (2). The results are predictable – the average PO costs $124 and 90 minutes to process, with 40% of employee time spent just shopping (3).
Simple, Streamlined eCommerce Can Help
When facilities have multiple teams, vendors, processes and even procurement tools, ordering becomes messy and confusing. The symptoms are all too recognizable -- items are overstocked, approvals take days and too many people are involved in the process. The results are wasted product, missed timelines and a purchasing process that nobody can follow.
A single eCommerce solution can help. When facilities combine procurement, punchout and mobile solutions, they can remove vendor complexity while ensuring products are easy to order and manage. Automated tools to maintain adequate inventory, approve POs and keep spend under budget increase compliance and reduce costs. Even in the field, facilities teams can leverage the eCommerce mobile app to reach the same Grainger inventory and order on demand with location-based purchase lists.
Use Digital Solutions to Transform Your Operations
Introducing eProcurement, web, and mobile solutions to your facility can transform how you shop, order, and manage. In each step of the procurement process, digital tools can help cut down waste and complexity while reinforcing your facility-wide plan.
eProcurement offers a branded punchout catalog tied to Grainger's ordering and vendor management systems. With integrations to existing ERP tools, eProcurement can easily become part of your facility's workflow. eProcurement can also supply eQuote and KeepStock Inventory Management integrations to further automate the shopping, ordering, and managing process.
Research from the Aberdeen Group shows the impact of an eProcurement investment. Those that leverage eProcurement saw an average 51% drop in requisition-to-order costs (4). A similar study showed a 36% reduction in processing costs with the shift to electronic invoice processing (5). Adopting digital and mobile-first technologies can lead to significant reductions in spend.
Saving Time and Money Starts with Digital
Shifting your facility to eCommerce and eProcurement not only creates a single process for shopping, ordering and managing, but also saves significant time and money.
When the entire ordering process is managed in one system, teams can gain line of sight into even small purchases. An eProcurement implementation can reduce purchase order processing costs by up to 50%, ensuring spend is efficient across facilities (3). Because all orders are approved in line with predetermined thresholds and processed through one system, auditing for compliance and staying under budget becomes easy.
Dan Kloes is an eCommerce Solutions Manager for Grainger, assisting public sector agencies and institutions for the last 6 years by implementing eCommerce solutions and streamlining their purchasing processes. Prior to the eCommerce role, Dan assisted Grainger customers with KeepStock managed inventory solutions, and helped with the redesign of Grainger's distribution network.
(4) The E-Procurement Benchmark Report, Aberdeen Group
(5) Invoicing and Workflow, Integrating Process Automation to Enhance Operational Performance, Aberdeen Group