How to Simplify Purchase Order Management

Throughout the electronics manufacturing industry, purchase order management frequently leads to inefficient and manual processes. Organizations often don’t devote resources to updating these outdated procedures as it is often a lower-visibility task.

Purchase Order Management
However, changing outdated purchase order processes into a streamlined, effective purchase order management system can be beneficial and simple. An efficient purchase order (PO) system can provide cost savings, process visibility and control, and a significant reduction in costly errors while freeing employees from manual tasks, allowing them to focus on higher-level strategic objectives.

Define Your Need

The first step to simplifying purchase order management is to review existing processes, making detailed observations in several key areas, including:

  • Process outline – What are the steps and who are the key people that drive the PO process?

  • Process cycle times – How long does it take to completely process a PO?

  • Approval cycle – How are approvals forwarded for signature and what are the associated timelines?

  • Data entry – Which systems require PO information? Accounting, inventory, logistics? How is this information transferred?

Not only will a detailed outline of the existing process provide you with valuable information on potential areas of improvement, it will also provide information that can be used for benchmarking the success of efforts at revising the PO system.

Define Business Rules

Review the steps of the existing purchase order management process and approval system to discover areas that you can improve purchase order management workflows by streamlining processes to increase efficiency and productivity.

Standardization

Purchase order processing involves many repetitive tasks, making it ideal for standardization and automation. Standardizing POs involves creating a single, unified document that provides the required information for every department that uses the PO.

While all POs include date, item, price, number of items, and supplier information, accounting may need an internal budget reference number for each order; warehousing may require an internal item number for inventory; and logistics may need separate shipping information. Ensuring that a PO form includes all of the information required for each department helps to eliminate the need for ongoing, manual data entry.

Additionally, standardizing forms means that a company can begin to use the same terms across different departments. Using the same language is an effective tool for breaking down departmental silos and improving communication company-wide. 

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Automation 

Once tasks are defined and standardized, they can be reviewed for automation. An automated PO system can create, source and issue purchase orders with minimal human intervention. Forms can be automatically filled with information including item number, description, price, preferred supplier and forwarded for review and approval. Touchless reconciliation automates the receipt and closing of an order, while automated exception routing alerts the appropriate personnel of any issues with orders so that they can be resolved immediately.

An automated purchase order management system, like Orbweaver Advance, enables your company to streamline the PO workflow.

Orbweaver Advance reduces the need for manual input by accelerating PO generation, approval, and processing for maximum efficiency. The systems centralized documents improves communication within and between departments, while reducing the risk of duplicate orders or errors in manual processing or data entry.
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Reducing the approvals cycle and overall processing time gives an enterprise greater control over the purchasing system. Not only are internal processes improved, relationships with suppliers and vendors are improved as well, with fewer errors and faster response times.

Contact Orbweaver today to learn how automating purchase order management can improve processes and save you money.