Digitizing purchase order (PO) management is a priority for many retailers adapting to the pandemic and preparing for a fundamentally reshaped business environment – more than 60 percent of retailers were already using an order management solution in 2020, and half of retailers plan to invest in order management in the future.
Why is purchase order management such a business-critical initiative now, and how can retailers leverage this in conjunction with other enterprise technologies to optimize their supply chains?
Ultimately, the push to digitize all aspects of operations and integrate more intuitive software into business processes is part of an effort to increase engagement, collaboration, efficiency, and data integrity across internal teams and industry business partners.
The supply chain disruption and shifts in consumer behavior brought on by the pandemic emphasized the need for enhanced digital purchase order management solutions, but make no mistake – enabling more agile, flexible, and collaborative methods for order management will provide resilience against the inevitable environmental, geopolitical, and competitive disruption that lies ahead.
Here are five ways your business can improve order management and create a more resilient supply chain to better adapt to disruption and change.
1. Encourage multi-enterprise collaboration prior to PO commitment
Collaborating with all business partners across the supply chain reduces the likelihood of miscommunication, excess inventory, disruptive order changes, and unexpected delays. Knocking down siloes and enabling data sharing between different business processes and partners helps to achieve a level of collaboration that is constant, simultaneous, and drives shared value for all parties.
A collaborative purchase order management system allows businesses to evolve from basic management of a static financial document to a business collaboration hub that provides supply chain visibility, financial forecasting insights, and vital information to support customs clearance and compliance.
Better collaboration can help retailers connect their business ecosystem on a single platform so supply chain partners can collaborate on POs before order commitment.
This enables buyers to proactively adjust orders, improve vendor governance, and avoid logistics complications. Buyers see tangible benefits from this kind of digital collaboration in the form of a 10 percent increase in on-time, in-full deliveries and a product assortment that’s aligned with customer expectations.
2. Find a system that can flexibly support omnichannel order fulfillment
Retail is about knowing what customers want. If the pandemic has shown us anything, it’s that customer behavior can change significantly in no time: since the start of the pandemic, curbside pickup rates have increased by 85 percent, and online grocery sales have jumped by more than 50 percent. These channels may not have been big contributors to revenue pre-COVID, but they’re staples now.
This shift in consumer behavior has proven that offering multiple selling channels is essential, and having the backend agility and data transparency to support these channels is a differentiator for businesses today. After the pandemic, this shift toward delivery and curbside pickup is unlikely to slow down —retail industry leader Christophe Roussel, Executive Vice President of Sourcing for Gap, predicts many of these changes in consumer behavior will become permanent.
At the end of the day, customers are attracted to convenience.
Major retailers know this: nearly 85 percent of retailers surveyed in a POS & Customer Engagement Survey by Retail Consulting Partners (RPC) said enhancing digital commerce is a top priority in 2021.
Investing in backend support to enable profitable new selling channels that meet consumers’ needs related to convenience will help retailers grow and secure their consumer base in the long run.
3. Ensure all partners have early visibility into purchase orders
Supply chain disruption and demand swings are inevitable. Making sure all internal and external stakeholders can view, input, and collaborate on orders in real-time to maintain an up-to-date, centralized order management system of record will help to ensure all goals are met.
Providing all stakeholders with improved visibility into order management systems and the entire supply chain results in greater agility to help fortify organizations against disruption. Supply chain leaders have the tools to proactively manage variations in demand, supplier delivery times, and changes to production schedules.
Suppliers benefit too, with more time to acquire raw materials and more complete visibility. This helps them achieve the maximum ROI from their production lines and strengthens strategic relationships with retail partners.
Changing trade agreements and geopolitical conflicts will continue to affect retail supply chains. Ensure all partners involved in factory, sample, customer, divisional, and replenishment orders can communicate and collaborate.
A unified supply chain solution can remove 3 to 6 weeks from the order cycle and reduce order changes by 50 percent.
4. Layer on top of your legacy ERP tool to drive agility
Many legacy ERP systems responsible for purchase order creation and execution have been on the market for decades.
As a result, there’s a wide range of systems with poor user interfaces and little flexibility to support the needs of the business today. Most of them are not conducive to collaboration or integration with the broader enterprise application suite, which limits efficiency, engagement, and actionable data.
Legacy ERP capabilities that basically function as static record documents do not meet the needs of retailers in today’s market. Instead, retailers should invest in software tools that are flexible to the ever-evolving requirements of the business, provide a user experience that encourages internal and external system engagement, and can be implemented and driving organizational value quickly.
An agile purchase order management system layered on top of a legacy ERP tool can help businesses quickly scale their backend technology to support a higher volume of sales and products.
Floor & Decor implemented the Bamboo Rose PO Management system to reduce recurring fees associated with EDI orders, reduce safety stock, and give vendors the ability to update product order details in real-time.
This change helped Floor & Decor achieve significant savings, streamline inventory, and eliminate the need for additional administrative hires.
5. Embrace intelligent automation to drive efficiency and speed
Automation is the pinnacle of efficiency. Any time you integrate automation into your PO workflow or supply chain, there is an opportunity to save time for suppliers, retailers, and consumers.
With the Bamboo Rose purchase order management solution, retailers can automate order updates to alert all stakeholders on changes to production timelines, deliveries, and delays.
Users can also make last minute updates including delivery date, means of transportation, and destination changes. Automated order creation leverages data across organizations to expedite the order creation process.
With Bamboo Rose’s Order Builder tool, retailers can intelligently aggregate data from product selection, design, development, sourcing, cost negotiation, and channel/market demand to create a pre-PO they can share with suppliers before final confirmation.
This level of automation takes weeks out of the order creation process to allow for more time to collaborate with vendors and service providers and get products to consumers faster.
Overall, these automated order creation and update alerts keep all partners informed for better decision-making and pave the way for a more proactive supply chain. In uncertain times, it’s key to ensure reliable information is widely available.
Ready to create an order management system and supply chain that can really adapt to disruption? Check out the Bamboo Rose platform today.
For a deep dive into an agile PO, check out our on-demand webinar.