Top 6 Procurement Challenges in Manufacturing
Posted by Clarion Safety Systems | 19th Mar 2020
Solving Common Procurement Challenges
Procurement is not a simple process and it can be a point of difficulty for many organizations, including equipment and product manufacturers. Whether your organization is small with a single or no dedicated procurement professional or large with a full team, there are some problems you may have trouble avoiding. We’ve gathered together six of the more common purchasing and vendor relations problems. Read on to learn more about these challenges – including ways to overcome them.
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Challenge 1: Collecting
Accurate Spending Data
As with any other business process, procurement is more effective when fueled by data. That information can help you and your team make informed decisions about your supply chain management. It can also enable you to communicate about purchasing needs with senior management and others who may not be directly involved in the process but still have influence over it.
However, making sure you have consistent and accurate data on procurement can be challenging. People don’t submit their expenses properly, different suppliers provide different data and many other obstacles arise.
Enforcing consistency and having a well-defined but easy-to-follow process can help with this. Cultivating your vendor relations, and clearly communicating your data needs, will also help.
Challenge 2: Information
Conversely, sometimes supply chain management can be plagued by information overload. In the modern business world, we have access to so much data, it can be too much at times. This can lead to errors and delays.
In other words, the key to effective procurement is making sure you have just the right amount of the right data at your fingertips. The best way to approach this problem is to ensure that you have the exact tools you need at your disposal. For many teams, collecting a lot of data but using a dashboard to organize it is the most effective solution.
When it comes to physical inventory, visual reminders and trackers, like asset tags, can help accurately gather data. Knowing how much inventory you have and where it is located proves helpful when needing to know what items to order and in what quantities. Asset tags monitor and track resources in real time using barcode and QR code technology. Creating custom asset tags for your equipment and products is an excellent way to provide daily intel related to your supplies.
A specific service that Clarion Safety provides our manufacturing clients is kitting services. With this service, we produce a kit of all the labels needed for a specific product in one complete package. This can simplify ordering and inventory management, as you’ll have one part number to inventory and order, instead of many individual safety labels.
Challenge 3: Dark
Dark purchases are procurement expenses incurred outside of the normal purchasing process. They may happen because someone with purchasing authority neglects to submit the expense properly. They can also happen when someone is intentionally trying to hide a purchase. In either case, maintaining visibility over expenses is essential to avoiding dark purchases.
Additionally, it can be helpful to ensure that the official procurement procedure is relatively easy. Try to make it as simple as possible to do things right the first time rather than needing to go back and fix issues later. Many people who aren’t in supply chain management don’t understand the importance of good procurement procedures.
Challenge 4: Extended
If your purchasing process with a particular supplier is long, it can be hard to ensure that supplies arrive on time. They need to be ordered significantly in advance of their need. While that is acceptable for regular purchases, it often isn’t practical. Many supplies are ordered with a sense of urgency and cannot wait for long lead and shipping times.
Try working with the supplier to determine if a shorter turnaround time is possible. Depending on what you are purchasing, you may be able to arrange to allow occasional emergency orders. However, if you are unable to reach a satisfactory arrangement, it may be best to look for another vendor.
To help expedite the procurement process, or when there is an immediate need for a product, keep in mind that Clarion Safety offers a fast track ordering service. Rush orders can typically be turned around in as little as 24 hours, offsetting wait times to meet your immediate needs.
Compliance and Risk Problems
Supply risk can be a difficult challenge to overcome in the procurement process. Changes in the economy could disrupt your supply chain, and there is the potential for fraud and unexpected changes to pricing, quantity or delivery times.
Furthermore, compliance is often a consideration with supplies for a project. If you need supplies that adhere to regulatory or quality requirements, you can’t afford to risk working with a vendor that can’t guarantee compliance. Fostering long-term and trust-based vendor relations can go a long way in helping with this, as can choosing to consolidate vendors in favor of most trusted suppliers. It’s difficult to completely remove risk from procurement. However, working with vendors you know or that are recommended by others can help.
Here at Clarion Safety, with our long-term visual safety communication leadership , we’re here to help with any compliance issues our customers are facing. We also proudly offer a number of certifications that stand behind our company and products including ISO 9001:2015 certification, being a 3M Preferred Converter and being a UL® Approved and a UL® Mark Certified Printer.
Sometimes you will experience unexpected delays in your supply chain. Perhaps an item is out of stock or the shipment gets lost en route. Many of these issues can’t be planned for or foreseen. However, you can prepare for the possibility that something will go wrong.
Again, one of the best solutions to this problem is to maintain good relationships with vendors. This will help you to learn about and address issues such as out of stock items more quickly. Furthermore, the more you communicate with your vendors, the less likely there are to be any problems that arise from misunderstandings. The right vendor can make all the difference in handling those unexpected delays.
At Clarion Safety, we’re dedicated to offering world class service for our products. In fact, as shown in our proof points, we’ve perfected a design and ordering process that's fast, easy and precise. We deliver when you want AND we get it right: 99.2% of our orders are delivered on-time, and they’re received with 99.0% satisfaction.
Clarion Safety: At
As our customers can attest, here at Clarion Safety, we take great pride in the support we provide to both our engineering-focused clients and to those charged with sourcing. We understand the challenges of procurement and work hard to ensure that buying from us is as easy as possible. In our conversations with purchasing agents, they often site similar core concerns related to label and custom print orders. Those include: managing many vendors for labels, managing hundreds of SKU’s/product level inventories, and cost sensitivity. If you share those concerns, keep in mind that Clarion Safety can help!
It all starts with something we do free of charge with no commitment – assessing your label program. Label assessments are unique to your company, so the exact benefits vary, but we’re often able to help you spend less money and improve operational efficiency through vendor consolidation, label consolidation and purchasing solutions like kitting. Get in touch with us to learn how we can help assist in easing procurement and supply chain challenges for the equipment and products you’re sourcing for.