Accurate sourcing and procurement forecasting are vital for the productivity and financial stability of an organization. Forecasting isn’t just about having the right resources at the right time, but about optimizing all aspects of demand planning, procurement, and supply chain that have been eroded over time.
Stave ProcurementPath enables clarity in forecasting so you can identify past trends and future needs, make prioritization and tradeoff decisions, and have the correct staff and resources in place to take advantage of these insights. It allows a company to ensure procurement can drive business innovation days, weeks, and even years down the road.
Here are five ways Digital Procurement can help improve forecasting and planning to support the long-term success of your company.
Decrease the Cost of Commonly Purchased & Commodity Items
First and foremost, digital procurement allows you to see purchasing trends to make the right purchases at the right times based on how the organization uses its resources. Demand-driven automated purchasing can streamline additional or add-on purchases automatically based on business rules to optimize costs of commonly used items. This means add-on costs are more predictable and don’t come up at the last minute.
Real-world examples include the consumable parts and materials for operational assets such as your fleet vehicles. When the parts such as belts or fan blades are unavailable, asset downtime often costs far more than parts themselves – a digital procurement system can help optimize the demand for these parts to reduce the overall operational costs of the business.
Demand Forecasting to Manage Procurement Workload
Continuous forecast management help increase procurement accuracy – it also enables the procurement organization to manage the anticipated workload of the team, balancing the needs of the business with the resources available. As sourcing requirements are identified, the proper manpower to execute each sourcing event or purchase can be put into place in advance.
This helps not only in planning the day-to-day workflow, but also allows the operations organization with post-purchase activities such as dock scheduling, unloading, and incoming materials processing and storage. Everyone is ready to take care of orders from start to finish because planning was communicated and optimized around the organization’s existing resources.
Build Budgets against Existing Costs and Future Opportunities
When it comes time to set budgets, creating and managing department and project budgets in a central system against historical order quantities and costs can provide the business with unique insights into cost optimization opportunities. Having a comprehensive database of previous order information allows you get real-time metrics and generate reports to show where things currently stand relative to what will be needed in the future.
As part of an ongoing forecasting capability, users can generate month-over-month and year-over-year projections down to the dollar. This also helps in developing what-if scenarios that show the impact of current spend rates vs. potential spend rates. If the company is planning to expand and you have to set a new budget for the expansion, your digital procurement system can be a big help.
Enforce Compliance Upfront
Forecasting allows ensures that future forecasts are planned with the time and insight to ensure that procurement, and not business units, are enforcing compliance and not executing “workarounds” due to poor planning or shadow purchasing.
Procurement forecasting and planning enables transparency in the procurement process and allows for time to communicate the compliance requirements to all parties involved. Stakeholders can participate in ensuring compliance with feeling time-pressured or trying to compromise the procurement process due to unreasonable demands and expectations.
Collaborative Forecast Approach with internal Organizations
Digital procurement creates a collaborative environment for all organizations involved with procurement activities. As the company addresses future period sourcing, contracting, and customer service, the central procurement repository provides necessary information every step of the way.
This collaborative structure supports good communication across your organization. It reduces hassle, allows everyone to work with the same information, and promotes the kind of teamwork a company needs for long-term success.
See how Digital Forecasting can help Procurement Deliver Value in Your Organization
Find out why the forecast is always good with Stave ProcurementPath. See a video about how it works, go try it out in the ServiceNow Store, or connect with Stave to learn more.