Smart shopping

Purchasing is one of the main areas of gain for companies in the Food Business. Ensuring the quality of products at competitive prices becomes essential for these companies in order to achieve the expected margin of profit in the practice of their services.

Taking this into consideration, most organizations have teams which are responsible for searching for lower prices, new suppliers and new products. However, it is not enough to have just this particular group doing the job. It is also critical having well-defined processes so that the gain brought will not get lost in the way as a result of poor management.

For instance, It is not rare that a company may go through financial loss because the entry of products is not processed according to the original Purchase Order. In other words, all the negotiation efforts and the search for better prices and conditions are pointless just because there is no control of goods inflow.

In one of the companies we worked with, there were discrepancies between products inflow and the original output from the Purchasing department. Because these conflicting numbers were significant, a Supply Authorization Control was implemented in our systems to assist the staff that received products and processed the invoices in different units. They were now able to verify any inconsistency in the prices originally negotiated. By the end of the first month, it was possible to appraise the invoices and compare the prices of products with those previously agreed on. The Top 10 suppliers were requested to grant rebates in their upcoming billings to compensate for the previous disparities. The gains perceived were substantial.

From the second month on, an agreement between the staff responsible for receiving the products and Purchasing was made: the entries presenting discrepant prices were automatically blocked by the system. Furthermore, whenever the invoices appeared to have inconsistencies, the Purchasing department was immediately contacted so that measures could be taken before the suppliers. From then on, both processes got well adjusted avoiding significant losses for the company.

To sum up, it is extremely important to have the purchasing and product receiving routines well aligned. A management system can assist companies in this course of action by defining and controlling processes, in order to ensure significant gains when establishing the final cost of their products.

Source | Collaboration
 

Leandro de Assis, Teknisa Consultant