Save Money, Time, and Effort with Touchless Procurement
By Hugo Britt | December 14, 2021
Have you ever seen a Rube Goldberg machine? These contraptions consist of a series of devices with each action triggering the next. For example, a marble may roll along a tube and drop off a table, setting off a catapult that launches a second marble that hits a switch, and so on in a long chain reaction. They’re fun to watch, and even more fun to build.
I tried making one of these machines with my kids using marbles and dominoes. The goal was to set it off and watch as each step seamlessly triggered the next. Unfortunately, I’m no engineer, so I ended up having to constantly intervene to put the marble back where it belonged and manually trigger the next stage. Needless to say, my kids weren’t very impressed.
In the age of e-procurement automation, modern procurement processes should work like a well-built Rube Goldberg machine. When a need for a product or service is identified, this should trigger a supplier search, followed by an RFX process. Next comes negotiation, contracting, delivery, quality assurance, payment, and continuous improvement. The entire process should be informed by spend analytics insights.
“Touchless procurement” therefore means a streamlined and automated process that does not require human intervention.
How many touchpoints does your procurement process involve?
How often do you find yourself having to manually intervene in your procurement process? Examples of inefficient touchpoints include:
- Spending hours on RFx documentation
- Needing to export data into a spreadsheet, clean it up, and import it back into the system
- Lengthy back-and-forth communication with stakeholders or suppliers
- Manually altering a contract template
- Manually translating spend analytics data into action
- Generating purchasing orders and other back-office processes
- Chasing up managers for approvals
With dozens or even hundreds of procurement processes running at once, sourcing professionals can easily spend all their time running around attempting to keep the machine functioning through manual interventions. This, predictably, leads to the function operating only on a tactical level and leaves no time for bigger-picture thinking or strategic projects.
Benefits of touchless procurement
By automating your processes, touchless procurement will reduce errors introduced through human input and the need for rework. It can lead to increased consistency and reliability, improved PO compliance, on-time payments, and boost speed, efficiency, and visibility. Taken together, these improvements result in more cost savings for the business.
Manage by exception
The goal in touchless procurement is to stop managing and intervening in every step of the process and start managing by exception. This requires a red flag system wherein anything that will hold up the machine is identified as early as possible and procurement is alerted. Procurement then takes on the role of trouble-shooters, ready to step in when necessary.
Integrate demand planning with e-procurement
Truly touchless procurement will become increasingly possible as demand planning improves through the power of IoT. For example, in a smart warehouse environment, a product being removed from a shelf triggers an automated purchase order with the integrated e-procurement system. This launches the procurement cycle, which (if the system works) will result in the product being refilled without any need for a human touchpoint.
This same concept can be applied around the office – for example, we already have smart printers that automatically order ink and paper or a maintenance visit.
Reduce touchpoints with Group Purchasing
Another way to eliminate two of the most time-consuming touchpoints in the procurement process is to partner with a group purchasing organization. At Una, we have pre-negotiated contracts with major suppliers for popular categories in place, saving you the time you would normally spend on RFx documentation and supplier negotiation.
Ready to learn more? Contact us for solutions to improve your procurement processes in a way that saves money, time, and effort.