What Is Procurement Software?

Purchasing management software is a management system for the comprehensive use of purchasing functions, which effectively controls and tracks the entire process of procurement logistics and capital flow, and achieves complete enterprise material supply information management.

Purchase management software

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Purchasing management software is a management system for the comprehensive use of purchasing functions, which effectively controls and tracks the entire process of procurement logistics and capital flow, and achieves complete enterprise material supply information management.

Chinese name

Purchase management software

Features

Supplier Management Product Management Procurement Plan Management

Purpose

Enhance procurement intelligence and enhance negotiation effectiveness

Purchasing management software is through purchase application-purchase order-incoming inspection-warehouse receipt-purchase return-purchase invoice processing-supplier management-price and supply information management-order management- As well as a comprehensive management system that uses functions such as quality inspection management, it effectively controls and tracks the entire process of procurement logistics and capital flow, and achieves complete enterprise material supply information management.

Procurement management software is a new type of procurement management software that enhances procurement intelligence and enhances negotiation effectiveness by automating strategic sourcing processes to avoid confidentiality-related issues caused by unnecessary human intervention. It can also automate transaction procurement activities, with a view to reaching a higher level in terms of efficiency, compliance and cost savings, and has a certain degree of representativeness. To this end, the following analysis of system functions using a procurement management software as an example:

1. Supplier Management

Supplier information management: including basic supplier information, organization information, contact information, legal information, financial information, communication records, opportunity information, cost information, product and service information, contract and order information, and supplier inquiry form information.

Supplier qualification review: Provide a framework for supplier qualification review. Each new supplier must go through a qualification process to ensure it meets the requirements set by the company.

Supplier classification management: Track the status and performance of each supplier's qualification review at any time, and classify it into: major qualifications that have not yet been audited, qualified, ineligible, blacklisted, and highly satisfied.

2. Product management : including product price control, price comparison, inventory and other management.

3. Purchasing plan management : Each department can make different purchasing plans according to their different expense categories. Manage procurement completion rates and track deviations based on procurement plans, and provide early warning throughout the procurement planning and execution process.

4. Tender Management

Tender preparation: The system provides an effective framework to help you develop effective plans and strategies for the tender phase. For example: supplier information request, quotation request, proposal request, continuous quotation, supply arrangement.

Management of bidding process: The system can help companies track and manage the entire process of bidding in real time: the list of candidates who have passed the screening-preparation of bids-announcement of invitation to bids-bidders should bid-evaluation-final selection Announce results.

Electronic bidding management: The system provides a web-base platform that supports the end-to-end electronic bidding process. Both bidders and bidders can obtain real-time bidding information, communication information, and shared documents submitted by both parties.

5. Order Management

Purchase order, sales order and payment management: The system supports the management of the entire purchase process from purchase request to payment. Purchase orders, sales orders, and payments can be managed separately by each department, or they can be managed by the entire enterprise.

Real-time service level agreement: Able to set the reward and punishment rules of the service level agreement and automatically track its actual results in real time. It also supports setting milestones, revenue / expenditure, quality of deliverables, service availability, service capability, defect rate, service turnaround time and other tracking elements. During the execution process, the system automatically tracks and measures the results, calculates the corresponding rewards / penalties, and notifies relevant personnel in real time.

6. Outsourcing management

Goal Management: Setting goals in stages usually plays a vital role in the success or failure of outsourcing. Often, some leaders fail to clearly understand the complexity of the company's internal work, and thus cannot accurately identify the capability gaps and limitations of outsourcing companies. This problem often leads to unrealistic or ambiguous goals set by the company, making no outsourcer willing to contract, which leads to the failure of the company to achieve the stated management goals during the implementation stage. The system can help you understand the company's situation in a comprehensive and clear manner, effectively avoid vague and unrealistic goals, and thus establish clear and effective outsourcing goals.

Discovery and strategy management: Discovery is the process of sorting and auditing the content that needs to be outsourced. The system supports recording multiple discoveries at the same time, and can associate findings with goals and project activities as part of goals to ensure that they are executed according to the goal plan.

Change management: Change management is the process of transferring the content that needs to be outsourced from the internal environment to the outsourced environment. It provides a framework for outsourced change management and helps you quickly and effectively formulate and implement change plans.

7. Other

Cross-departmental and cross-corporate responsibility management: In the outsourcing business, different people at the buyer and supplier have different responsibilities. The system provides you with a framework for cross-departmental and cross-corporate responsibility management, helping you to clarify the rights and responsibilities of all parties and ensure that all responsibilities are effectively fulfilled.

Cross-enterprise resource management: Support the outsourcing supplier's resource allocation and use in the project.

Cross-enterprise project and program management: nine areas that support PMI-defined project management practices.

1.Enable enterprises to take the initiative in purchasing

2. Reduce corporate procurement costs

3. Improve the transparency of procurement

4. Improve the efficiency of corporate procurement

5. Optimize the procurement process

6. Strengthen business relations between supply and demand

7.Improve the value creativity of enterprises

1. In line with the size of the business

Different enterprises use the same procurement and supply software to generate different benefits. The larger the business scale, the more workload can be reduced, and the greater the benefits. For enterprises with a large procurement business, powerful software is better than simple software, and the benefit is greater than the purchase expenditure.

2. Evaluate the effectiveness of the software

Evaluating the performance of software is one of the most important factors in choosing software. For example: whether the software can complete the work required by the procurement department, is it compatible with other existing supporting systems (such as accounting, invoices, and receipts), is the software easy to integrate with other information databases in the procurement information system, and Easy to use and understand, whether it can increase its functions as the purchasing department's business changes, whether the software provides control functions and exceptional reports for managers to use.

3. Cost of software

Most software prices are composed of software product prices, implementation guidance prices, customized prices, secondary development prices, and annual service fees.

4. Software ease of use and system stability

The software used must be easy to use. At the same time, the software must ensure the stability of the system, stable purchasing management software skills operate normally when entering the correct data, can also automatically detect errors when entering the wrong data, and provide a platform for manual error detection to ensure the normal operation of the software.

5. Software product scalability

It is required that the software products not only meet the needs of the enterprise at that time, but also meet the needs of the future, that is, the procurement software must have a certain scalability, and it can be integrated and expanded with other systems in the future to meet the overall needs of the enterprise informatization.

6. Software Vendor

Vendors are also the determining factor in software selection. First of all, it depends on the development capabilities of software companies. Software products can be produced through a complex production process. Just like looking at manufacturing companies, we have to look at the sound field capabilities of software companies, that is, software development capabilities. Look at software companies. Is there a complete development team. Whether the supplier can establish customer feedback channels; whether the technical personnel sent by the supplier have sufficient purchasing expertise; whether the supplier has sufficient design in the industry; whether the supplier is able to cope with future upgrades and updates.

The successful procurement management of modern enterprises is increasingly dependent on the successful implementation of ERP. ERP has become an important tool for modern procurement management.

Integrated thinking of procurement management and ERP integration

The ERP system is oriented to the entire business process of the enterprise. Its core idea is to treat the business process of the enterprise as a tightly connected supply chain. It extends the management of the enterprise from the inside to the outside of the enterprise, and manages all aspects of the enterprise's supply chain. integrated.

1.In terms of integration within the enterprise

Within the enterprise, the ERP system organically integrates the relevant departments of the entire enterprise through information sharing. As the source of internal information flow, logistics, and capital flow of the enterprise, the realization of the integration of the ERP-based procurement management system is of great significance for the integration of the entire enterprise ERP system. The ERP system attaches great importance to re-engineering and designing the original working methods and workflows that the entrants are accustomed to. The wider the transformation, the more the potential of the new system can be fully utilized. The profits that the company receives should also be greater. In the procurement management, we are constantly pursuing efficient processes. Advanced software systems and business processes are combined to consider and continuously optimize and run in. This effective integration of ERP within the enterprise will improve the efficiency of procurement management and maximize the use of enterprise resources.

ERP is the management of resources supported by computer technology, and the planning and application are reflected in the form of data. Ensure the accuracy of data in procurement management and establish a sound data collection mechanism. Talking about data in management activities and taking factual data as the basis for decision-making can achieve effective integration of the ERP system within the enterprise.

2. Integration in the external supply chain of the company

The effective integration of ERP and the supply chain system is based on the overall market competition and social needs, and the company integrates and optimizes various resources within the enterprise, such as various departments and material suppliers in the supply chain. Greatly improved the operational efficiency of logistics, capital flow and information flow in enterprise procurement activities, eliminating many intermediate redundant links. Thereby reducing circulation costs. And improve corporate resilience.

This effective integration of ERP and supply chain systems connects companies and suppliers well, and integrates them through information networks. The purpose is to survive and develop in a fierce market competition environment, which greatly improves the efficiency of enterprise procurement management. Has brought significant benefits to the enterprise. The effective integration of ERP in enterprise procurement management eliminates many redundant intermediate links in procurement, reduces waste, avoids delays, and has good social effects.

To sum up, on the one hand, procurement management through the effective integration of ERP system within the enterprise, to achieve the organic integration of enterprise logistics, capital flow and information flow to improve the efficiency of procurement management. on the other hand. Through the effective integration of the ERP system in the external supply chain of the enterprise, the company has established a long-term and strong cooperative relationship with suppliers and optimized the procurement management of the enterprise. In short, through the integration of the ERP system inside and outside the enterprise, the application efficiency of enterprise procurement management has been improved, and the integration of procurement management and ERP integration has been reflected in a concentrated way.

Design and operation of the system

The procurement of enterprises is very important and very complicated. Quite a lot of enterprises from the central to the local procurement often affect the efficiency of the procurement due to some trivial matters in the procurement. The main control factors of procurement: the quantity and price of material supply And the supply time is just barely coping. There is almost no time and energy to study the procurement market and develop suppliers, let alone establish a stable, efficient and low-cost supply chain for the enterprise. The emergence of ERP has injected a strong vitality into the procurement work, providing a solution that combines management and technology. It should be said that in the promotion and application of ERP in many business departments, the procurement department is one of the fastest-performing departments. When implementing an ERP-based procurement management information system, an enterprise can proceed according to a certain business order:

1. Establish supplier resources

When running the procurement management system under ERP, the first step is to establish a supplier file, at the same time classify the preferred and second-selected suppliers, and establish a supplier's supply details (variety, price, supply period, transportation method, etc.). Final confirmation is valid. When the system executes the release of the purchase order, it needs to read in the corresponding supplier information and initialize the relevant accounting information of the supplier. After the initialization is completed, the procurement business can be processed. Supplier information is the basic information of the procurement subsystem.

2. Generate purchase requisition

The purchase request generated according to the ERP's material requirements plan, taking into account the material's order batch, purchase lead time, inventory volume, transportation method and unplanned material application, the system automatically merges materials, and can also manually intervene and modify. In addition, the procurement lead time for some raw materials is very long (some imported parts require a procurement cycle of more than half a year), so it may exceed the main production plan formulation cycle. The procurement plan for this type of procurement should undergo comprehensive discussion and evaluation by the sales, finance, and planning departments to determine the required quantity and time, and then formulate a medium-term or long-term procurement request for the material.

3. Determine preferred suppliers

The process is to implement the procurement supplier. According to the supplier resources in the system, the purchasing business personnel comprehensively examine the relevant supply prices, delivery quantities, delivery dates, quality requirements and technical requirements, perform supplier selection and evaluation, and implement the preferred supplier for each material. The newly developed supplier resources shall also undergo a supplier certification process, and they shall not be used as a licensed supplier until they have been reviewed and qualified accordingly.

4. Generate a money plan

After the purchase plan is generated, the system automatically generates the expense plan and maintains it according to the inquiry result. After confirming the plan for the use of money by the finance, the feedback will be given to the purchasing department.

5.Place orders

Combine materials according to order batch, purchase lead time, inventory volume, transportation method, expense plan, and unplanned material application to generate purchase orders. After confirmation, the order can be output and finally released to the supplier. Orders can also be posted online. For temporary additional purchasing tasks, you can directly release the purchase order through negotiation with the supplier.

6. Follow up purchase orders

Purchasing business personnel track the released purchase orders as planned. The system can set the tracking time period to form an order follow-up plan. In the follow-up process, it is necessary to understand the production progress and quality of the supplier, and provide timely support to the supplier.

7. Goods acceptance

The purchasing clerk checks and accepts the goods supplied by the supplier according to the order and records the receipt. According to the characteristics of system integration and the actual process of the enterprise, the goods manager can directly check and accept the goods according to the order, and manage and control the suppliers that do not deliver according to the plan (delay, advance).

8. Settlement and cost accounting

It shall be completed by the purchasing department in cooperation with the financial department, and according to the purchase settlement documents of the materials and the apportionment of the various costs of the purchase. Calculate the purchase cost of the material.

9. Settlement of purchase order

After the purchase order is delivered, received, stored, paid and evaluated, the purchase order must be settled in a timely manner. The system can provide automatic settlement function, and can choose delivery, receipt, storage, payment, assessment and other settlement methods. Generally, the system processes the payment as it is settled. Forced settlement is also possible.

10.System basic data maintenance

The basic data of the procurement subsystem includes buyer information, supplier information, procurement lead time, and business processes.