While there have been technological advancements in electronic component purchasing over the past few decades, the purchasing process remains mostly manual.
From navigating searchable product inventories, to developing purchase orders and requests for quotes (RFQs), businesses can turn to automation to simplify and streamline their processes.
These processes create challenges particular to the electronics component industry, where purchasing managers must manage pricing, excess inventory, and purchasing processes for hundreds of thousands, if not many millions of different products.
Manual Processes are Costing you Time and Money
Additionally, electronic component purchasing entails its specific challenges. The enormous online databases detailing parts and specifications for each component can be challenging to navigate, and comparing products from one supplier to the next can be a labor-intensive project, even when conducted online. Further, it can be unclear which distributors are authorized by the manufacturer to sell specific components, and some parts may be vulnerable to counterfeiting, making it difficult and confusing to source authentic parts from legitimate suppliers.
Manual purchasing programs are costly in dollars and employee staff-hours.
A research study compiled showed that of the 170 billion business-to-business invoices collected annually, 92% are analog rather than digital. An analog invoice can take up to 10 days to process, and costs on average $4-$10 per invoice.
5% of all purchase orders are returned due to vendor error
The costs of manual purchasing in dollars, working hours, and inefficiencies can have a tremendous impact on a business' bottom line. Furthermore, manual purchasing processes are prone to error, which is itself very costly to the enterprise. An academic study by engineers from Northwestern University found that in a large retail chain, 5% of all purchase orders (about 4,000 per year) returned due to vendor error. Each error resulted in rework for the retailer, amounting to invested working hours of anywhere from 1.6 hours to 3.6 days to correct the problem, not to mention the costs related to the complications that these vendor errors created in the retailer’s inventory management system.
This example, while related to retail emphasizes the point that to reduce errors and streamline the electronic component purchasing process, organizations must consider automating the process.
Automating purchasing processes can help a company to phase out time-consuming manual methods, such as data entry, and have a direct positive effect on the bottom line.
An automated purchasing platform can reduce the invoice process timeline, making the entire process more streamlined and efficient. Manual data entry is reduced or, in some cases, eliminated, and the rework associated with errors can largely be avoided.
An automated process also creates operational efficiency, can help to reduce fraud and provide a clear, verifiable audit trail, and assist managers with budget control and monitoring. More time can be devoted to improving relationships with vendors; and an automated process provides process visibility throughout, enhancing budgetary controls, reconciliations, accrual and audit monitoring, and the accuracy of financial statements.
A purchasing officer faced with the specific challenges associated with electronic component purchasing will benefit the most from the adoption of an automation solution developed exclusively for electronics component market.
Automation Solutions to Streamline the RFQ Process
Orbweaver Advance is the only automation solution that was developed specifically for electronics component purchasing. RFQs and POs are automated, and managed within a pre-set business flow that works with the existing MRP/ERP system.
With Orbweaver Advance RFQ, the quote queue system activity is automated, with touchless email attachment importing, automated pricing and historical data, and automatic approval and business flows. With an accepted quote, Orbweaver Advance PO will provide sourcing and issuing of POs, and automated reconciliation of POs. Any exceptions route to a web portal dashboard, where they are addressed and resolved seamlessly by the buyer and seller.
The Advance system also allows for control of RFQ and PO revisions, while eliminating duplicated manual data entry, transmitting data in real time. Additionally, the system makes provisions for automatic reorders on specific items when stock runs low, with POs flowing directly to the system of record.
Orbweaver Advance was developed by electronics industry insiders, to address the needs of components purchasing, and integrates into existing networks and data formats.
To learn more about Advance and Orbweaver’s comprehensive electronic component services, request a free consultation today.