Facility management software: 7 tips for avoiding expensive procurement errors
What we call "procurement" refers to the practice of acquiring products and services. Technologies like monitoring, compliance, and sourcing contracts are also part of this. Your company can't function properly if you don't have a streamlined method of acquiring necessary supplies.
Here are seven techniques to ensure that your company doesn't make any costly blunders when making purchases.
1) Misleading Background Data
Consistency and correctness are especially important when placing an order for materials because the same item may be categorised or described differently by each party involved. When placing orders through your software, you and your suppliers, contractors, and facilities management must take care to prevent making any mistakes.
Confusion Over Units
To avoid confusion, it is essential to establish and adhere to a single unit of measurement for all goods and services. Problems with ordering may arise if your supplier counts a unit as 10 items but your program counts it as 2.
There is a Disconnect in Prices
The most common methods of recording prices are the most recent price used or the weighted average price. When there are discrepancies between suppliers or when materials haven't been used in a while, problems can arise. Your system's cost may vary depending on who supplies it.
Elimination or Extinction
Problems may arise if the desired things are no longer in stock, if they do not fit as expected, or if they have a different aesthetic. Your facility manager will need to do some investigating to locate appropriate equipment.
Solution
If your information is complete, up-to-date, and has records for all relevant parts as well as numerous measurement systems, you'll be better able to adapt to changing circumstances and reduce the number of errors in your orders. Accuracy in your bill of materials will help you prevent mistakes, give you confidence in your system, and see your project through to a successful conclusion.
2) Not enough supplier negotiation
Some pricing are set in stone and cannot be changed, while others may be up to discussion and negotiation with your suppliers.
Solution
Communicate openly with your vendors, negotiate rates, and look for win-win solutions.
Thirdly, Not Seeing the Big Picture
You might have a long-term partnership with your suppliers, not simply for the duration of one order. The cost of upkeep for a single purchase could be far more than the savings from purchasing in bulk or upgrading to better quality products.
Solution
In order for negotiations to be successful, all parties involved should stand to gain, the lines of communication between them should be kept open, and the terms and conditions should be mutually beneficial.
4) Inefficient use of available technology
Increased reliance on facility management software solutions for tracking procurement progress is a growing trend. One's incapacity to master the tools at one's disposal, and one's outright rejection of such innovations, are two of the main causes of inefficient technological utilization.
Idleness in the Face of Adequate Tools
Even if you can afford to buy the most cutting-edge software for your facility, it doesn't guarantee that all your problems will disappear because the new program might not work with your current approach. Installation will take some time, and employees who prefer the tried-and-true may refuse to use the new program.
Solution
Service providers are in the greatest position to help you determine which software is right for your organization by listening to your needs and making recommendations. In order to input data correctly, training is mandatory. It will be necessary to process your primary records, weed out any stale details, and standardize the formatting.
Negatively Responding to Technology
New software systems, like any other type of change that is introduced to a workforce, will always generate anxiety. Employees, especially if they are obliged to undergo training, may be resistant to or outright reject changes to their established work routines.
Solution
If you are already using some sort of procurement software, evaluate its strengths and weaknesses. Check to see if you are making full use of its features; your service provider should be able to offer advice on how to optimize your workflow if you aren't.
Educating your workers on the upcoming implementation of a new procurement software system is essential. You should emphasize the positive aspects of the new system, such as how it would lessen their future workload and save money for the business. To succeed, you must create a situation in which everyone benefits.
If you're on the fence about making a software investment, it's smart to weigh your options, learn about what's out there, and weigh the costs and advantages to your organization.
F5) Going with inferior products to save money.
Whenever cost is a deciding factor, the best option is never the cheapest.
Solution
Find out how your vendors and manufacturers operate. The cheapest options may end up costing more money in the long run because they may need replacing sooner. In addition to perhaps increasing the worth of your building, investing in more expensive goods may increase its longevity, decrease potential dangers, and protect its value.
Sixthly, Reducing Standards without First Getting Approval
It's possible that crucial requirements won't be met because of mistakes, added costs, or the need to provide substitutes.
Solution
Recognize that these problems are possible, and set up review schedules.
Subpar Documentation
It is crucial that your software solution for tracking inventories contains accurate documentation. Lacking this information, you have no way of knowing what products are available.
Solution
All paperwork has to be 100% true, current, and functional.
Conclusion
All of the aforementioned elements are crucial for effective procurement practices that will keep your facility running smoothly.