Purchase Order Management
Extensive purchase order management for a retailer to manage the purchasing process within the business.
Purchase Order Management System
Island Pacific’s purchasing process provides extensive purchase order management procedures for a retailer to manage the purchasing process within the business. Features include manual or automatic purchase ordering, purchase order approval processes, extensive purchase order reporting, supplier performance statistics as well as supporting multiple purchase order types, multiple currencies pre-split and drop ship orders and much more. As well, you are able to estimate landed cost factors such as freight, duty and other charges that add to the vendor cost. Conversely you are able to estimate and track various types of vendor allowances. Both of these estimated charges and allowances can be compared to the actual charges or credits in accounts payable.
Features include manual or automatic purchase ordering
- Purchase order approval processes
- Extensive purchase order reporting, supplier performance statistics as well as supporting multiple purchase order types, multiple currencies pre-split and drop ship orders and much more.
- Landed cost factors such as freight, duty and other charges that add to the vendor cost. Conversely, you are able to estimate and track various types of vendor allowances. Both of these estimated charges and allowances can be compared to the actual charges or credits in accounts payable
- Purchase order templates
- Initial Purchase Orders can be created in Planning
- Full Open Order Reporting
- Full audit trail of all activity on a purchase order
- Ability to manage Bulk purchase orders to warehouse or DC
- Drop ship orders direct to individual store or channel
- B2B orders for fulfilment to Franchise & wholesale customers
- B2C Special Collect orders for fulfilment direct to customers
- Omni fulfilment orders including Click & Collect, Reserve & Collect BoPiS
Full purchase order tracking from the Planning process all the way through to the receiving and fulfilment process. Regardless of channel or method you will have a solution which provides full purchase order tracking and vendor performance analysis.
Effective purchase order management is often the key to success in today’s dynamic and competitive retail environment. But the purchasing activity of many retailers remains inefficient and fraught with issues. This makes it difficult or impossible for them to reduce costs and to satisfy the demands of consumers.
Efficient purchase order management has never been so important.
The Complexities of Retailing
Many organisations wait far too long to attend to their purchasing systems. Some persist in not raising purchase orders at all. This could stifle growth and if the businesses do expand, inefficient purchase order management will deliver a raft of issues.
Ranges and Variants
Comprehensive ranges and product variants mean that it becomes hard to definitively identify each item. Confusions are inevitable when humans are involved and so errors begin to creep into purchase orders. The result is the acquisition of the wrong stock and this will seriously impact profits.
The diversity of products and the sheer number of variants can make it very difficult to manually monitor sales and seasonal trends. It also becomes an onerous task to manually establish the stock levels which should trigger re-orders as these will vary from product to product and perhaps even from variant to variant. The inevitable consequence is that stock is ordered too late, in the wrong quantities or not at all.
Most retailers now sell across multiple platforms making it even more difficult to monitor sales activity and therefore to order the correct stock at the right time.
Many retailers hold stock in more than one location. Those responsible for purchasing can’t simply visit the shop floor to check stock and observe sales activity.
Supply chains vary in their complexity and efficiency. In addition, delivery times can be subject to seasonal fluctuations. The stock which has been ordered will be of no use to a retailer if it hasn’t arrived on time and so delivery times and potential delays must be identified and then factored in to purchasing activity. Where a business holds significant stock or purchases stock from many suppliers, it could be beyond the scope of any person or team to keep on top of these issues without the help of effective software.
Amendments and Partial Deliveries
It is inevitable that purchase orders will sometimes require amendment, that orders are occasionally only partially fulfilled and that some goods are defective and must be returned to suppliers. It becomes very difficult to monitor and account for this activity manually as a business continues to expand.
Purchase orders initiate a process which should culminate in the arrival of the ordered goods. It is vital that businesses have the means to monitor whether or not stock has been delivered and that the order has been fulfilled correctly. With manual systems, it is all too easy to overlook the fact that an order has failed to arrive or that only half of the goods have been delivered.
A global supply chain could mean that stock must be ordered, paid for and costed in multiple currencies. A manual purchasing system will mean that this situation results in even more work and an increase in human error. Complications with pricing are also inevitable.
As any organisation grows, more and more people may become involved in purchasing on behalf of the business. It is crucial that their activity is managed, that stock isn’t ordered twice in error and that purchasers do not overspend. With manual systems it can be hard to spot duplication and other errors.
Poor Purchase Order Management and Profitability
It is vital that the importance of efficient purchase order management is understood. Without it, the accurate identification of merchandise, correct pricing, the monitoring of delivery times and efficient stock allocation become impossible. The timely and accurate ordering of stock and materials are fundamental to fulfilling demand, minimising costs and maximising profits.
Poor purchasing practices will result in the following issues, all of which will impact profitability:
- Missed sales opportunities arising from lack of stock
- The inability to fulfil orders on time due to lack or stock or the late arrival of stock
- The holding of excess stock which will remain unsold
- The holding of stock in the wrong colours and sizes
- Holding the wrong quantities of each variant
- Lack of awareness that stock ordered has not been delivered
- Not knowing that an order has only been partially delivered
- Inability to respond quickly enough to trends
- Inability to determine where an order has gone wrong
- Duplicate orders and other human errors
- Lost or damaged paper documents which are vital for record keeping
The Benefits of Purchase Order Management Software
When you really think about how complex retailing is today and how many potential difficulties there are with purchasing, it becomes obvious that purchase order management software is an essential investment. One which will almost certainly pay for itself in double-quick time.
The latest systems feature manual and automatic purchase ordering, a purchase order approval process, extensive reporting and supplier performance statistics. Businesses can also benefit from multiple forms of purchase order, the ability to order in multiple currencies, the monitoring of drop ship orders and estimates of shipping costs including import duties. Information is accurate and available in real time.
An effective system enables any business to improve their profitability and gain a competitive edge by:
- Reducing costs through operating lean
- Reducing costs by minimising errors
- Maximising sales via timely purchasing decisions
- Maximising sales by holding the correct levels of stock for each product and variant
- Improving decision making through access to real time information
- Identifying and managing issues with supply chains
- Establishing competitive prices whilst maintaining adequate margins
- Streamlining purchasing and accounting
- Establishing and adhering to purchasing budgets
- Saving time and potential confusion by Syncing purchasing systems with suppliers’ systems
Is there a good reason not to digitise purchase order management? Simply, no. Many businesses delay making an investment in technology in the erroneous belief that they don’t need it, that they don’t need it yet or that they can’t afford it. Many of the advantages that can be enjoyed with the right system will only become apparent when a business begins to use it. The efficiency of any retail business will be significantly improved by taking advantage of the latest technology and that includes purchase order management.
To learn more about how Island Pacific can help your business harness purchase order management, or for a demo of our inventory management software.