Smart Procurement is the absolute new development in the world of procurement. Although it is still a new concept and there is no fixed definition of it, it stands as a system of procurement that involves Artificial Intelligence (AI) and more advanced technologies such as: Robotic Process Automation (RPA), IoT, and blockchain. It comes as a rescue to the procurer and saves them from all the tedious tasks involved in the process of procurement that eventually affects the supply chain efficiency.
The process of smart procurement is very beneficial in processing large chunks of data in more understandable and easily represented ways. This saves the business managers a lot of time and the tedious task of doing it all manually. Using this data, a number of important decisions related to the procurement of material can be done immediately. Even though it requires human oversight, it is important to note that it would not require the person looking to involve themselves manually, most of the processes will be completely automatic.
The role of smart procurement is undeniable in improving supply chain efficiency. The digitization of the whole process introduced by smart procurement trends has made a tremendous difference in the way procurement takes place today. Here are some of the ways how smart procurement brings in Logistics and Supply Chain Efficiency:
- Reducing the gap between demand and supply: The unpredictability of the market is why there has always been a gap in demand and supply. And this gap is the reason why the supply chain gets disrupted every time. Smart procurement technology works for the buyer as well as the supplier in giving them the data to know and predict the trends and always procure just enough after the analysis of the future demand. It smoothens the supply chain efficiency.
- Better Kept Records: Smart Procurement technology helps in maintaining a much better record of all the transactions made by the business. Any business requires so many transactions in its day-to-day functioning that it is hard to keep a record of all these and small enterprises cannot afford external help in doing that. These smart procurement softwares can help them achieve the maintenance of records without spending any extraordinary amount of money on external help.
- Increased Transparency: All transaction history is usually saved in receipts and in books that creates very less transparency with the stakeholders of any business. With the introduction of smart procurement, this information is recorded digitally and can be used by various other stakeholders and service providers to serve the purpose of the business much better.
- Faster Procurement: All the time that is usually spent on deciding how much is required to be procured is saved with the use of smart procurement softwares. The integrated technology can do all these calculations for you and keep the information ready for you to use as soon as an urgent procurement requirement comes up.
Conclusively, it is fair to say that even though smart procurement technologies are still developing but with the extent to which they have been developed they have made the logistics and supply chains much more efficient in the businesses that implemented them.
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Earlier, the conventional procurement process relied heavily on email, phone, and paper-based documents to communicate with requisitions and order management.
Here, we are going to demonstrate a graph where the procurement teams would like to see the greatest improvement in the process in the upcoming years.
Let us discuss 4 steps in the e-procurement system that could bring your procurement process to experience increased data accuracy and increased visibility.
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Often unknowingly, employees may spend above their budget, send an order to the wrong supplier or distribute the cost to the wrong cost center or general record.
Pushing ahead, it will be critical for procurement groups to make a procedure where clients are ‘guided’ through the whole purchasing process.
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