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5 Strategies for Better E-Procurement

1/31/24

E-procurement can save so much time and effort.

Today’s platforms can move your procurement activity firmly into the connected digital domain, from sourcing and requisitioning to invoicing and payment. And with artificial intelligence (AI), machine learning and other advanced tools, there’s the promise of more efficient workflows than ever before.

But who really benefits from e-pro? At many companies, e-procurement optimization efforts may initially be focused on the direct spend that drives profits. This means that maintenance, repair and operations (MRO) purchasing, along with other indirect spend, can unintentionally be left behind. However, this category comprises of many more small dollar orders requiring multiple employees to select and approve these transactions adding time and cost to your business.

Grainger conducted a survey to better understand how organizations are using e-pro for MRO. The online survey was completed by 500 Grainger customers between Oct. 19 and Nov. 2, 2023. Respondents were from a mix of business sizes within MRO industries and all self-identified as being familiar with e-procurement platforms. Questions sought to learn more about how they saw the advantages, challenges and opportunities associated with their procurement systems.

Responses showed that while e-pro adoption is widespread, there’s still plenty of room to grow when it comes to handling indirect procurement for MRO purchasing.

Here are the key data points:

  • Most of the MRO professionals surveyed – 87% – are using e-pro today.
  • Only 43% say they’re very familiar with e-pro platforms.
  • And their most common e-pro use cases are still relatively basic: placing orders (79%) and tracking spend (74%).

So what can you do to improve your e-pro operations for MRO? Here are five strategies to get things going.

Automate, Automate, Automate

When it’s done right, automation feels almost like magic. It greatly reduces the amount of hand-entry involved in procurement, which can be a big efficiency driver. It’s also a big opportunity. Only about half of the survey respondents 51%) reported that their companies are using e-pro for process automation for MRO procurement today.

Rob Furrow is an eCommerce Solutions Manager at Grainger. He helps organizations better understand and implement their e-pro options for MRO.

“Many people don’t know that they can be using their company’s enterprise resource planning systems to automate procurement,” Rob said. Automation can simplify orders, acknowledgements, invoices and payments.

“They’re hand-entering invoices and product in their systems all day long when the whole process could be automated,” Rob said. Eliminating hand entry is always a win, and it can be especially valuable at organizations where experienced, highly paid employees are doing the hand entry.

Simplify Shopping

Meanwhile, shopping and ordering can also be improved. With a punchout catalog, users can launch a supplier’s website that’s connected to their e-pro platform, giving them access to real-time pricing and availability information, along with a familiar interface with intuitive search capabilities and additional features like favorites lists and access to quotes. Together, punchout and automation can streamline your procurement process. 

“You can punch out to a supplier to shop for items to create a requisition and automate your purchase order approval process,” Rob said. “Send us the order, and we’ll send you back an electronic invoice. You don’t have to hand-enter anything.”

To take this simplicity to the next level, many e-pro platforms offer marketplace functions. In an e-pro marketplace, people can shop for products and get pricing and product availability information from multiple suppliers in the same interface, without bouncing around between separate catalogs and sites.

The survey found that these electronic marketplaces were among the most appealing innovations for e-pro users: more than half (53%) said they thought marketplaces would be beneficial for their organizations in the future.

Meet Them Where They’re At

If you want to get the most out of an e-procurement system, you can’t lose sight of how people are interacting with it in their daily work. Are they accessing it through a desktop computer, or are they using a mobile device out in the field?

In the MRO world, the answer is probably that they’re doing both. And the e-pro system needs to meet them wherever they’re at.

“A lot of our customers aren’t people who just sit behind a desk,” Rob said. “They’re on the go, and they need to have mobile options that are fast and easy. But then there are also people who do different work. They need to manage orders and gain visibility into spending. Either way, the information needs to be pulled back into the same system.”

While different e-pro systems have different channel capabilities, don’t forget to look at how well suppliers can connect with the system through different features and functionality. Seek to connect with supplier that have omnichannel capabilities that connect different purchasing methods to your e-procurement software. 

Lean on Your Partners

When e-pro users were asked what problems they encounter while using their platforms, the most common answer was that supplier won’t share all the data they have. This was cited as a pain point by 29% of respondents.

But suppliers and other strategic partners don’t need to be a hindrance when it comes to your e-pro implementation. In fact, leaning on your partners when it’s appropriate can help lighten the administrative burden for your organization.

Alicia Brown is an eCommerce Solutions Manager at Grainger. She helps companies connect and optimize their e-pro systems.

“I’ve worked customers who are implementing a new system or who are looking to add Grainger to their existing systems,” Alicia said. “We’ve built so many of these connections. We've already got solutions ready to go for many of the systems that organizations are using, and we understand holistically how these systems interact."

It goes beyond help with initial setup.

“We’ve also circled back with customers to help refine their implementations after they’re live,” said Alicia. “They’ll come back to us and say, ‘Now I’d like to see ship notices or acknowledgements from you.'"

And for companies that haven’t yet made the jump to an e-pro platform, suppliers may be able to offer order management, detailed purchasing data and other sophisticated features that can help bridge the gap.

Consider Consolidation

It might sounds like a contradiction, but it’s worth remembering: e-pro makes procurement simpler and more efficient, but e-pro systems can be complicated to use and to maintain. Often, this creates a new set of challenges.

To keep the complexity from getting out of hand, it may be worth considering supplier consolidation.

Consolidation can address a common complaint about e-pro platforms – that there are just too many punchout catalogs to navigate, which was a pain point for 29% of the survey respondents.

Consolidation strategy can also address one of the most cited barriers to better data quality – that the data is fragmented among too many suppliers, which was cited by 37% of the survey respondents.

That may be why more than 40% of those surveyed said that their organizations are thinking about consolidating spend with fewer suppliers.

Think About the Future, But Focus on the Present

What about AI and machine learning? These are the ideas that capture the most attention today.

But the technologies are still emerging, and the use cases are still being honed. Don’t let these buzzwords distract you from the low-hanging fruit.

While it’s a good practice to have an eye on the future, many organizations could see immediate benefits from time-tested tools that are much simpler to implement, especially when it comes to MRO procurement. Automation, supplier integration and even punchout are some of the capabilities that can drive efficiency today.  

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The information contained in this article is intended for general information purposes only and is based on information available as of the initial date of publication. No representation is made that the information or references are complete or remain current. This article is not a substitute for review of current applicable government regulations, industry standards, or other standards specific to your business and/or activities and should not be construed as legal advice or opinion. Readers with specific questions should refer to the applicable standards or consult with an attorney.