Thoughts from a Focused Buyer: Reducing Process Time from Req to PO
The following question and response are in the ISM – Purchasing & Supply Chain Professionals group on LinkedIn. If you would like to join either the group or the ongoing discussion, click here.
A Purchasing Manager asked…
“I am getting complaints from Operations that the time it takes to process a requisition and turn it into a PO is too long. The buyer in question is taking an average of 4 days. In many cases they are getting multiple quotes. Not the ideal, but we are working on finalizing supplier agreements, preferred pricing, etc, which will reduce the amount of quotes being sought.
Four days does seem high, and I'd like to see it reduced to 2-3 days. Is there a benchmark that other companies use?”
And the Focused Buyer answered…
“The amount of time consumed by the Requisition to PO process is highly dependent on a number of variables
- Complexity of the requirement
- ROI purchase value to the organization
- Current preferred supplier base maturity
- Project end use and schedule importance
- Whether or not it is a high frequency repeated item or service
- Capabilities and process connectivity
- Ease of use of the procurement software platform involved
The process could only take minutes or it could take - and might really need to take - a few weeks. Depending on a buyer's backlog, for repeated purchases and uncomplicated requirements, the right software should allow RFPs to be launched to capable suppliers in minutes as well as the same for then processing requisitions into POs (after offers have been received). Process software should also facilitate an interactive, instantaneous 'one place' contract performance platform for all PO activities between the parties.
We invite you to join the discussion here or in the ISM LinkedIn group - what benchmark do you use for PO processing?