Suppliers and service providers can expend a lot of time chasing outstanding POs from buyers, only to find that the buyer never signed the order. This may cause serious production or operations interruptions owed to late delivery, with other ripple effects for both the buyer and supplier.
Fortunately, modern e-procurement solutions include a facility for both buyers and suppliers to manage their POs online, and to accurately measure each others performance, Elmo Erasmus, Elmo Erasmus, Chief Technology Officer at WebPortunities, tells SmartProcurement.
This useful facility has many benefits:
• Guaranteed receipt and visibility of all open purchase orders until fully delivered and paid.
• The constant visibility of outstanding and overdue purchase orders encourages suppliers to improve their delivery performance (fewer late orders, shorter and more stable lead times), especially when they are informed that this yardstick is used as evaluation criteria when buyers award new business.
• Online supplier feedback, where prices are incorrect, eliminates account queries and speeds up payment of bills.
• Online feedback in cases where delivery dates cannot be met enables the buyer to seek alternatives and avoid potential production interruptions.
• Where deliveries have already been made but orders still show as outstanding, remedial action can be taken to avoid ‘transport and receiving bottlenecks’. This speeds up the receiving process and ensures that suppliers’ and buyers’ delivery and receiving performances, are accurate in terms of:
o On-time or late deliveries;
o average lead times; and
o stability of lead times.
• It is no longer necessary to send an expediting report or submit a list of outstanding orders – online transparency eliminates the need for faxes or emails to multiple buyers or suppliers and repeating the same messages over and over.