“A chain is only as strong as its weakest link.” This phase is both literal and metaphorical. In reality, if one link breaks in the chain; it’s no longer doing its job and fails the system. The same applies metaphorically to businesses, relationships, friendships, teams of all sorts, and the purchase order requisition process.
That’s why, in the context of business, it’s so important to analyze every system and procedure contributing to your organization’s operation. A high-level culture of efficiency only stems from optimizing each aspect of the organization individually.
In procurement, this means strengthening the entire chain of the procurement flow, from top to bottom. While the procurement process is a layered one with multiple aspects and elements – this article is going to specifically focus on how to optimize your purchase order requisition process.
The Purchase Order Requisition Process
Before we jump into optimizing and strengthening your purchase order requisition process, let’s briefly overview what the process entails. The purchase order requisition process is the process through which managers, departmental leaders, and departmental heads can submit a business document, known as a purchase requisition form, to procure the necessary goods and services required to operate business as normal.
In other words, the purchase order requisition is how the leaders of your organization communicate the purchasing needs of the organization to keep things running smoothly. Having a poor or unofficial purchasing process can lead to an array of detrimental flaws within your business. There are two core components of a purchase order requisition process that need to be emphasized.
The first of these concepts is strong documentation and the second is clear and open communication. Between these two elements procurement professionals and varying departmental leaders can rely on the systematic approval processes and procedures in place to consistently meet each other’s needs.
Without having clear and open communication channels, your organizational leaders and procurement professionals are more prone to miscommunications and misunderstandings leading to a variety of ordering issues.
Some of the issues that can arise from a poor purchase order requisition process include improper orders, double orders, a higher rate of unplanned one-time orders, and misplaced orders that never arrive. All these issues lead to overspending and other budgetary issues in addition to the over or under stocking inventory issues that they present.
Therefore, incorporating and optimizing your process can ultimately change the entire landscape of your procurement process flow, in turn leading to a variety of significant improvements within your organization.
The Benefits of Strengthening Your PO Requisition Process
As mentioned above, there are some clear flaws that having an undefined purchase order requisition process brings to your business and procurement department. However, that doesn’t necessarily speak to the benefits that strengthening your PO requisition process provides to your organization.
Ensuring that your organization has a formal and standardized PO requisition process will also make sure that procurement needs are being met on a regular and scheduled basis. This allows employees and professionals within your organization to stay stress free as the supplies and services they need to operate normally should be on a normal delivery cycle.
On top of that, improving the PO process further improves the procurement process within your organization as a whole, leading to a higher rate of efficiency within both your procurement and accounting departments.
Additionally, but not lastly, strengthening your purchase order requisition process will reduce costly errors within the purchasing department, help prevent the need for special one-time orders, and maintain inventory levels where they need to be.
A Final Word on the Matter
The purchase order requisition process is only one cog in the large clock of your organization. However, the best organizations dedicate time and energy to optimizing even the smallest cogs that help them operate.
The same theory is applicable to your procurement strategy. Take the time and effort to optimize it and see the benefits compound throughout the entire vertical or your company. A fantastic way to start is with purchase requisition software.
For more information on the purchase order requisition process, procurement best practices, or procurement systems – visit ProcurePort, the internet’s premier source for everything procurement.