effective supply chain operations by Epiq Tech

Supply Chain Operations

With companies rushing to try to implement the latest and greatest technology in order to get one step ahead of the competition, many are finding that selling the employees and others involved in the change on the project is more difficult than actually putting the software in place. This has been especially true in regards to supply chain software; particularly, the part that helps streamline and track procurement more effectively.

The mistake most companies make is jumping into the deep end of the technology pool before they even learn to swim. For example, the most businesses which adopt e-procurement software want to immediately begin using the technology in areas where they spend the most. Of course, these are also their most important purchases and involve their most important vendors. However, since the program's success is still in doubt, employees will either reject it outright or wait for a small problem arise as evidence that the whole project was a fiasco. Vendors may also have doubts about working with an unproven system and overcoming their resistance can be difficult.

The solution is not to abandon plans for implementing procurement programs but for taking those implementations slowly. One suggestion is to start off using the program for indirect purchases, such as office supplies. While saving a few dollars on ink pens may not seem to justify the cost of the procurement software, it does provide a demonstrable example of the system's success that can be duplicated in other areas and which can be used to sell the system to other departments, to other vendors, and to the staff itself.

once the system is being used for minor purchases successfully, those involved in purchasing can make the transition to bigger purchases. They'll feel more comfortable using the system because they've either seen it in use or worked with it themselves with the indirect purchases.

The slower implementation also gives vendors more time to come on board. Generally, vendors in a supply chain need to update their technology in order to become an integrated part of the overall purchasing strategy. Because these updates can be costly, vendors may be reluctant to make the switch quickly and without proof that the new system will work. By using the software to make indirect purchases and by increasing its usefulness in the company in increments, the vendors will be able to see the success for themselves and will have more time to prepare for their own technological updates.

Companies that have approached supply chain software in this manner have been impressed with the results. They've seen less employee resistance and, as a result, increased productivity since employees are more eager to begin working with the new system in order to save themselves time.

While the incremental adoption of supply chain software is one way to ensure a company's successful entrance into the technology, another is to have realistic expectations. Unfortunately, many businesses get into new procurement strategies and anticipate incredible cost-savings of 60% or more. Occasionally those numbers can be achieved, they are unlikely. A more realistic estimate would be a savings of 10 to 15% consistently across all categories of purchasing. Those numbers may not seem as significant, but they do pay off over time.

The bottom line is that companies who expect instant miracles from supply chain software are not only disappointed but they set the stage for technology resistance in their employees and possibly their vendors. Businesses need to have realistic expectations of their anticipated cost-savings, and they need to implement the supply chain software slowly instead of immediately trying to save money on their most important purchases. With these suggestions, companies are more likely to find success with their new software.

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