Sabre Limited has worked with a lot of manufacturing companies that manage their purchasing in a variety of ways. It’s always part of any ERP project to help them improve purchasing management practices, and in particular, improve their efficiency and accuracy. This is a major part of any ERP implementation in manufacturing businesses.
Often their existing processes are highly variable and sometimes manual.
Perhaps they go out to the stockroom and see what looks like it is running low. Or they keep a running total of inventory on paper or Excel sheets. Maybe the process is to purchase when things are below their minimums. Maybe they study drawings and purchase all requirements all at once. Maybe they just keep Microsoft Word templates of the things they use the most and send them out regularly. Some will utilize their accounting system. Many will live and die by Excel sheets.
Replacing these during the ERP implementation in manufacturing facilities is one of the ways companies can gain immense benefits.
Why do you want an ERP implementation in manufacturing to be so focused on Purchasing?
To understand the reason you want to focus on your purchasing department in any ERP implementation in manufacturing, it’s important to understand the problems with a more manual “pre-ERP” purchasing process. Many of these challenges are described in our companion blog, 6 Signs you need Business Central Inventory Control.
Issues that can arise with a manual purchasing process include:
- Manual work or duplication of effort occurs when typing a purchase order into Excel or Word and then emailing or faxing.
- There are no reports or alerts advising you when to buy or when something is going to be late. You end up becoming an email manager or tracking lots of paper.
- You are likely dealing with inaccurate inventory levels. This makes it very difficult to improve purchasing management. Manual systems are ripe with errors. And some accounting systems don’t (or weren’t implemented to handle) automatically bring in the inventory transactions from purchasing or jobs while many don’t provide access to the system to Purchasing or Inventory Control.
- Inventory shortages will inevitably occur affecting the timing of your deliveries and ultimately your customer service reputation.
- Short lead time items and long lead time items will get purchased at the same time tying up cash flow before it is necessary.
- You will not have visibility across all your jobs or projects. Yes, many specialty items must be purchased to the job but there are many others that are common to other jobs and you are not getting the benefit of volume purchasing by buying all from drawings or bills of material.
- You may have people (Engineering, Accounting, Sales, or Administration) doing the purchasing for you. When purchasing is not their primary role, improve purchasing management suffers. When staff lack proper tools and/or do not have a negotiation or a supply chain background, you are not always getting the best bang for your buck.
Your ERP implementation in manufacturing – especially with a product like Microsoft Dynamics 365 manufacturing Business Central is going to address these problems. Too many businesses try and focus on the more exciting features like a Warehouse Management System or WMS, driven by wireless barcode devices. These are exciting and “sexy” products, but in reality, some very simple changes to purchasing can make even bigger differences, at much lower prices.
Dynamics Business Central as a product used for an ERP implementation in manufacturing addresses all of these issues.
With a proper ERP system in place, such as Microsoft Dynamics Business Central, purchasing can then be delegated to one person with responsibility for that area who becomes fantastically more productive. They can purchase to the job or to inventory without double entry – just click and the P.O. is created and sent (with or without approval rules based on dollars and security).
The system will know which vendors are associated with that part, what the costs and volume levels for pricing are, what the lead times are etc… Using this data (along with things like minimum and maximum and alternative parts for stocking) lets you see when the inventory is required based on the schedule for manufacturing and customer delivery due dates. Your purchaser will be fully aware of when a P.O. is going to be late, have the tools for easy follow-up, and can evaluate the performance of your vendors when dealing with your business.
The ROI on ERP implementation in manufacturing for purchasing management is high. Improve profits and cash flow with this invaluable tool for your business.
Dynamics Business Central will Improve Your Purchasing Processes
An ERP system (like Dynamics Business Central) significantly improves purchasing processes by streamlining operations, ensuring cost efficiency, and improving your relationships with suppliers. It helps automate repetitive tasks, provides real-time inventory data, and promotes better decision-making through comprehensive analytics.
This approach not only reduces manual errors but also helps in optimizing stock levels, leading to a more efficient procurement strategy and stronger vendor management. Lets look into these benefits in more depth.
- Simplifies purchasing workflows, making the process of buying faster and requiring less effort.
- Creates more effective communication and collaboration with vendors.
- Reduces the need for manual data entry, minimizing errors and freeing up time for strategic tasks.
- Offers up-to-date information on stock levels, helping prevent overstocking or stockouts.
- Provides analytics and reporting tools for more informed purchasing decisions.
- Ensures inventory is kept at ideal levels, balancing supply and demand effectively.
- Improves the oversight of supplier performance and compliance, enhancing overall supply chain reliability.
An ERP implementation in manufacturing can significantly transform your purchasing strategy, leading to improved efficiency, better cost management, and more strategic supplier engagement.
Closing Thoughts
At Sabre Limited, we are experts in manufacturing. We stand among the best Microsoft Dynamics manufacturing partners across North America. What sets us apart from our competitors is that we use fixed fees instead of time and material billing and we always put the customer first.
Our areas of expertise include:
- Production Manufacturing
- Job Shop Manufacturing
- Engineer-To-Order / Custom Manufacturing
- Project Manufacturing
- Architectural Manufacturing
- Industrial Equipment Manufacturing
If you need help with purchase control, get in touch with us. If you’re interested in learning more about what Sabre Limited can offer, we’ve been dedicated to helping small to medium-sized manufacturers learn and adopt Dynamics Business Central. Reach out, and let’s explore how we can contribute to the success of your manufacturing journey. Contact us at info@sabrelimited.com or call (519) 585-7524. We look forward to hearing from you.
