Thursday, 11 December 2014

3 Reasons Why Your Purchase Order System Should Be Integrated With Inventory Management

There are standalone apps available for managing purchase orders, inventory, and salesif you wanted to, you could even manage these tasks using paper spreadsheetsbut in business a siloed solution is rarely the best solution. We have collected the top three reasons why your purchase order system should be integrated with inventory and sales.

1.     Inventory should be collecting essential data needed to make purchasing decisions. In addition to unit cost, a purchasing manager needs to be aware of extended cost, lead time, and shipment rejection of each item to make intelligent decisions when evaluating the business supply chain. If you are unfamiliar with the terms, this means that to make purchasing decisions, a purchasing manger needs to be aware of how much of each item is used in manufacturing or shipped to customers, how long it takes for orders to arrive, and how many orders are rejected due to quality control issues. If you are not already collecting data from inventory, OfficeBooks collects purchase and inventory records through normal use.

2.     Delays in fulfilment cost customers. Depending on how suppliers handle shipments, if a purchasing manager reacts to an inventory shortage an hour late, it can put off order fulfilment by an entire business day or longer. These delays can lead to penalty fees and decrease customer retention. Because OfficeBooks integrates purchasing, inventory, and sales, you will be sent an alert the instant a sale results in an inventory shortage, which means you can place orders sooner.

3.     Automation saves time. The only response faster than an instant alert is automation. With OfficeBooks, purchasing managers can set minimum inventory amounts which trigger purchase orders. This level of automation relies on knowing that an order has been accepted in sales, that the order surpasses available inventory, and then requires access to supplier contactsit would not be possible without a system that integrates sales, inventory, and purchase orders, let alone paper spreadsheets.

Have you ever dropped a supplier because of delays? Share your thoughts in the comments below.

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