Make the most of ERP to improve enterprise procure

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Improve enterprise procurement management with ERP

through the implementation of ERP system, how to find problems in procurement management, concentrate on solving core problems that need to be solved urgently, and bring continuous improvement effect to procurement management through system operation

three disadvantages of traditional procurement

before talking about how to improve the level of enterprise procurement management through the implementation of ERP system, let's first look at the characteristics and shortcomings of procurement management in the traditional mode:

material procurement and material management are integrated. At present, most enterprises exercise the functional department of procurement management is the supply department (Department), and some enterprises combine the sales function with the procurement function, which is called the supply and marketing department. In this mode, the management process is:

the demand department puts forward purchase requirements -> specify purchase plan/order -> inquire price/process quotation -> send shipping notice -> inspect receipt -> notify financial payment

the above is a complete purchase business process. In practice, some processes such as inquiry/quotation are not carried out every time in many enterprises. The main disadvantages of this process are: material management, purchase management Supplier management is completed by a functional department, lacking the necessary supervision and control mechanism; At the same time, in this mode, the supply department (section) is responsible for maintaining the supply of raw materials for production. In order to ensure the normal supply of raw materials, it is bound to increase the purchase volume, especially when the price of raw materials rises, which is easy to bring unnecessary inventory backlog and increase a large number of accounts payable

the degree of business information sharing is weak. Because most of the procurement operations and negotiations with suppliers are completed through, there is no necessary written record. The procurement information and supplier information are basically controlled by each business person, and the information is not shared. The impact is: the traceability of the business is weak, once there is a problem, it is difficult to investigate; At the same time, the performance of purchase tasks depends on people to a considerable extent, and the change of personnel's position has a great impact on business

purchase control is usually post control. In fact, it is not only a purchase link. Many enterprises basically control most business links post control, which cannot be monitored in advance. Although we recognize that ex post control can also bring certain effects, ex ante control can reduce many unnecessary losses for enterprises, especially if an enterprise spans multiple regions, the significance of ex ante control will be more obvious

the above three problems mainly exist in the procurement management under the traditional mode. Through the implementation of ERP system, how can we find the problems in the procurement management link, concentrate on solving the core problems that need to be solved urgently, and bring the effect of continuous improvement to the procurement management through the system operation

take responsibility as the core

under the traditional management mode, its management idea is based on department management. Its level is department first, and then the corresponding work scope of the Department. For example, we can find the supply department (Department) in the enterprise organization chart, and then we can further understand the specific work that the supply department is responsible for. In ERP systems, especially large ERP systems abroad, each employee first corresponds to various responsibilities, which can be preset by the system or defined flexibly. The purchase process in the following table will include the following responsibilities in the ERP system:

it can be clearly seen in the above table that the system separates part of the work from the purchase module, such as making purchase requests, inspecting and warehousing, notifying financial payment, supplier management, etc. This design method of the system is to decompose the work to be completed into relevant responsibilities and corresponding to the modules. In the implementation of ERP, it is best to combine the responsibilities belonging to one module into a working group or business department. The benefits of this are:

it can be clearly seen in the above table that the system separates part of the work from the procurement module by setting a movable gripper seat on the rack or partially stripping it, Such as putting forward purchase requests, inspection and warehousing, notifying financial payment, supplier management, etc. This design method of the system is to decompose the work to be completed into relevant responsibilities and corresponding to the modules. In the implementation of ERP, it is best to combine the responsibilities belonging to one module into a working group or business department. The benefits of this are:

enterprises will centrally process the same kind of business, reflecting the idea of centralized management. For example, an enterprise found that the responsibility of the same purchase order was owned by multiple business departments through responsibility analysis during implementation. With the advice of the consultant, it was consolidated into one department, reducing a large number of purchases

capital. The implementation of centralized management also reduces a lot of coordination work, because cross departmental coordination of enterprises is a time-consuming and laborious work. Reducing these work will undoubtedly greatly improve the efficiency of work

separating the responsibility of inventory from the original functional departments is conducive to strengthening business supervision, because from the perspective of inventory management, it is hoped that the capital occupation of inventory will be the least, and the less the quantity of inventory, the easier the management will be, while the purchasing department hopes that the quantity of inventory will be "more". Aerogel is a solid material form to ensure production requirements, Such a pair of contradictions makes the inventory management department formulate relevant inventory replenishment plans in combination with production consumption as far as possible, including maximum minimum plans, material allocation plans, etc., while the purchasing department avoids stock shortages through regular inspection of inventory. After a period of operation, its inventory will inevitably be adjusted to a relatively reasonable level

logistics management and capital flow management are separated, that is, the function of notifying the financial department to pay is placed in the financial department, which reflects the management idea that the capital flow moves with the logistics, avoiding many human factors in the payment to suppliers. At the same time, it also plays a considerable restrictive role in blind procurement, because the right to pay is not in the logistics department

basic information is highly shared

although many enterprises regard reducing daily workload as one of the success criteria when implementing ERP, the workload of some positions will increase after using ERP system, especially those providing basic information. Specifically, in the procurement management, the work of purchasing staff and inquiry/quotation administrator of purchasing organization's new material production and use docking will increase, because in the past, these work were completed through, and the ERP system requires that all purchase documents be recorded in the system, which brings the following changes to the procurement Management:

the traceability of business is strong, and the ERP system can query the procurement business with any supplier at any time, You can also find out the status of the business, including the quantity of inventory received, the quantity of purchase returns, the quantity of invoices, etc

reduce human factors in business operations. Supplier management is a central link in procurement management. There are a lot of human factors in traditional supplier management. After using the ERP system, the system will analyze the status of suppliers according to the set indicators, including supplier supply quality analysis, quantity analysis, etc., and summarize the rules to formulate corresponding supplier management strategies, such as setting corresponding quotas and inquiry priorities. In this way, the impact of the transfer of business personnel on their work will be reduced as much as possible. New business personnel can easily query the list, contact information, and historical supply records of a certain type of suppliers through the system, and conduct procurement business according to the set supply strategy

complete control system

the specific application of the management concept of "pre control, in-process supervision and post analysis" in the ERP system is the most obvious difference between the ERP system and the traditional information system:

the process is orderly. In the ERP system, you can set which materials must go through the purchase application and which materials must first develop a general purchase plan to control the purchase workflow and refine the daily management of the purchasing department, Increase the scope of management

strict approval. Although in the traditional mode, we also emphasize that procurement management should be controlled according to a certain level, it is very difficult in practice, especially for cross regional companies. Through the precision screw pair transmission, the approval control process of purchase documents is established through the ERP system, which can control which materials can be purchased by employees with different responsibilities, and the upper limit of the purchase amount. If the amount exceeds a certain amount, it must be approved by the leader in charge, otherwise the ERP system will not continue to process the document, including receiving the corresponding goods, making payment, etc. If a company adopts centralized financial mode, the effect will be more obvious if it cooperates with the control of procurement process

good supervision in the process of purchasing business processing, if the supervisor (not only the leader of the purchasing department) finds a problem in business processing through query, he can terminate or suspend business processing until the problem is solved. If an order is found to be a duplicate order, it can be suspended, the reason can be found out, or the order can be cancelled

different from the traditional management mode, ERP system can also run the required reports at any time to reflect the implementation of procurement business in a certain period, including trend analysis, so as to provide timely information for the next stage of work improvement

the improvement of procurement management by the implementation of ERP system is not limited to the above three aspects. More importantly, it brings an experience for business personnel to realize how information technology changes and optimizes business processes


after the operation of ERP system, the ERP project has not ended. On the contrary, it has entered a new stage, that is, the beginning of continuous management improvement: for procurement management, after the operation of ERP system, the responsibilities of enterprise personnel are clear, which is convenient for assessment and management; It has laid a solid foundation for the implementation of e-commerce, SCM, CRM and other related systems; Affect the business processes related to the enterprise (such as purchasing, etc.). (end)

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