Why purchase order management really sucks without product data

Creating, assigning, tracking, and analyzing purchase orders are together some of the most operationally important tasks for organizations. These are also some of the most operationally intensive tasks for organizations. We want our purchase order management systems to make this process simple, streamlined and as automated as possible. Many things can take away from a great user experience with a purchase order management system. One of those is a missing link to product data. 

Creating purchase orders is a more enjoyable experience when product data is linked. Beyond being advantageous, this link is critical to safeguard against huge losses. Some reasons why this link between product and PO is so essential:

1. Minimizing manual entry 

Purchase orders templates need a section for product data including SKU information, attributes’ descriptions and other details that are essential to pass to the vendor at the time of assigning the purchase order. Since the volume of POs issued can run into hundreds and thousands a day for large enterprises, this entry of product data cannot be a manual process. Connecting new product design information and product attribute data to purchase orders allows for faster and seamless creation of high volumes of purchase orders. 

2. Minimizing errors in production 

The biggest expense on the P&L statement is COGS (cost of goods sold) or payments to vendors for producing goods. No organization wants to shell out huge amounts of money and get the wrong product. This is unfortunately a common problem, one that can be easily avoid. Manual errors in the product data entry or insufficient data can cause the vendor to produce and deliver the incorrect set of products, or to not make items exactly to specifications.  Automating connections to not just written product information but also visually informative files like product pictures, and technical packs can prevent errors and protect against catastrophic losses during manufacturing. 

3. Better order management for SKU variants 

Over 95% of new SKUs introduced are variants of successful SKUs versus entirely new products designed from scratch. This means triggering a purchase order need not be dependent on going through the product development process and associated cycle time. Having a database of referenceable and searchable product attributes can allow users to directly create purchase orders for new SKUs by playing around with the combination of product attributes to associate with the new SKU. For efficient order management on SKU variants, the database of product attributes must be both simple and well-engineered, and the link to the purchase order database must be flawless. If any kinks in the execution, the SKU variant order can trigger errors and losses. But if done right, it can save the company time and money and lead to much higher customer satisfaction. 

4. Smarter reporting 

My favorite part about connected data sets is the smarter reports and superior decision making it empowers users with. Some cool reports and insights that result from links between product and purchase order data:

a. Complex designs increase PO execution time 

By analyzing the product attributes that correlate to longer purchase order manufacturing times, product design can be simplified and attributes that are not very important to customers can be eliminated.

b. Total time from new design innovation through warehouse delivery 

Companies typically monitor purchase order issue to warehouse delivery time. But, to have a global view of supply chain efficiency across inbound and outbound activities, calculating total days from product conception, through development and purchase order provides a more thorough understanding of lead time efficiency. 

c. Orders for variants of higher volume SKUs

Higher quantity and higher frequency purchase orders indicate products that have successful sell throughs. Backtracking to the product attributes for such SKUs can inform actions to launch SKU variants with similar attributes, thereby reinforcing the positive cycle of more exponential growth in sales. 

For more at the intersection of supply chain, platforms, and technology visit www.suuchi.com and www.supplychainsunday.com