Many purchasing and operations managers struggle with inadequate, inaccurate, or outdated data when making critical purchasing decisions. The lack of insight can lead to big concerns for your business.
Inaccurate insights into stock levels may lead to the over or under purchasing of products. Incomplete data on supplier service levels may lead to purchasing products too late to meet demand.
Without fact-based insights, purchasing decisions are largely reliant on statements from sales reps or gut-feelings alone. Using outdated approaches may overburden your employees and undermine your bottom line.
Additionally, without consistent purchasing criteria, many suppliers don’t have a clear picture of how their customers evaluate them. Lacking this information, they don’t know how they compare to competitors or how they can improve their performance.
To optimize purchasing decisions, many operating and purchasing managers are turning to BI for the strategic sourcing of products. Strategic sourcing is a systematic, fact-based analysis of what a company buys. It relies on standardized requirements to determine which suppliers to buy from, the cost of the products and at what volume to purchase. BI provides users with complete, up-to-date and accurate data on products, suppliers, and markets; all available with the click of a button.
Analyze supplier performance along a number of metrics
With BI like Phocas, you have the ability to assess the performance of your suppliers across a number of metrics such as the number of orders delivered-on-time in-full (DIFOT), the time to deliver, ordering lead time, deliverance of damaged goods, performance over any time period, performance in specific markets and variances in product pricing.
With real-time analysis, you are able to identify gaps in performance or failures to meet the expectations outlined in your original contract. Supplier analysis allows you to improve your relationships with your best suppliers by ensuring that performance levels are maintained throughout the partnership. In the event that a supplier is failing to uphold their side of the agreement, you are armed with the knowledge to re-negotiate or direct your business elsewhere.
Share data with suppliers
Once you have run a performance analysis, sharing the results of these metrics can advise your supplier of ways they can become more competitive and prevent their customers from going elsewhere. Once suppliers have an accurate view of their performance, they now have a benchmark to work toward. Giving your supplier the insights they need to be competitive while encouraging healthy competition is a win-win scenario for both you and your supplier.
Avoid over- or understock by purchasing the right amount
A quality BI tool enables you to see how much of a particular product you have in stock. By analyzing historical sales trends, you are able to avoid the pitfalls over- or understocking products. For instance, running a comparison of sales from this year to last year will provide a clear picture of increased demand for a product, while an overview of month-to-month performance will let you identify any seasonal trends.
This is especially important for products with longer lead times. Once you have analyzed your suppliers, you will be able to identify which vendors have longer lead times and require advanced orders. You may also find that some vendors are able to supply the product much sooner, but at a less favorable price. Knowing your vendors’ actual lead times can help ensure that you always have enough stock on hand to satisfy customer orders.
At the same time, overstocking may lead to stock sitting in your warehouse and gathering dust because it is no longer in demand. This stock is called dead stock that may have to be returned or sold at a deep discount to avoid a significant financial loss. Maintaining appropriate stock levels safeguards accessible capital and customer satisfaction.
Why choose Phocas?
Phocas is intuitive software that delivers analytics to new users with minimal technical experience. Purchasing and operations management need a warehouse that is well stocked based on sales volume. Phocas enables sales, purchasing, and the warehouse to share data to increase overall operational efficiency.
Because Phocas has years of experience working with manufacturers, wholesalers, and retailers, we know knowledge is power. We provide the ability to create standard dashboards and reports with real-time data. For example, weekly reports can identify the amount of stock purchased, at what cost, and which vendor was used. This report can illustrate which stock is selling at which locations, from which product groups, and so on. In addition, figures on inventory turns, slow-moving and dead stock ensures that all departments have a clear overview of the business with one version of the truth.
Phocas offers individual users access to self-service data that can be queried using a dashboard which enables them to follow their train of thought to get the answers needed to make immediate decisions. With the ability to integrate data from almost any source, including ERPs, CRMs and more, you have a winning combination of up-to-date, accurate data and the ability to use that data to strategically source products and optimize purchasing processes.
To learn more about how to use BI to turn your data into actionable insights, download our free eBook: Turn your distributorship data data into results