Digitization in purchasing: Efficiency booster or job killer?
The ongoing digitization has changed our lives in many ways and has long been an established part of our everyday lives. Many Germans nevertheless still print out their digital tickets and keep them in transparent plastic pockets – a perceived act of security in an increasingly digital world. I once tucked a train ticket into my bag, printed out and stored in a transparent pocket just to be on the safe side. Do you do this too? This example illustrates the conflicting relationship many of us have with digitizing processes. For some it’s a fearful concept, for others a much-desired modernization. So which opportunities are open to us if we are brave enough to face this change?
Digitization and Purchasing 4.0
In the world of digitalization, two viewpoints are prevalent when it comes to Purchasing 4.0. Some see it as a challenging shift with much uncertainty. For others, it marks a long-awaited step forward or it’s the future that has already become reality. This shift is more than just a buzzword as it fundamentally influences the way companies work. It can be divided into three key areas:
Complete transformation: Digital technologies affect all work and life areas. In the business environment, work processes, operating procedures, and analysis methods are being revolutionized.
Increased networking: Digitized operations enable deeper networking with suppliers, business partners, and customers. Access to extensive data facilitates research and strengthens relationships with relevant partners.
Increased efficiency: By digitizing, business processes are optimized, resulting in an increase in efficiency. Digital tools deliver more comprehensive information in less time, automate processes, facilitate sound decisions, and contribute to more efficient company management.
So how are mobile apps revolutionizing purchasing?
A clear and practical example in procurement is the use of mobile applications – so-called apps. Are there options and can manual processes be replaced? Looking at mobile applications as an effective tool for corporate purchasing departments, it becomes clear: These apps are not only faster and more efficient. They help to automate manual processes and relieve our staff of repetitive tasks.
For example: Sabine, purchasing manager at a German mid-sized company, successfully relies on an app for C-part management. This is because digitization has made purchasing C-parts along with indirect materials easier than before. These three points have made it worthwhile for Sabine to use the app for managing C-parts:
- Easy to install: Installing the app simply on the smart phone gives companies quick access to benefits. It also minimizes IT efforts and ensures rapid integration in busy environments.
- Fast ordering: Pinpointing the required parts using efficient search functions or barcode scans significantly shortens the entire ordering process. And it promotes agile and error-free procurement processes.
- Ideal for small to medium-sized enterprises: Apps offering small and medium-sized companies (SMEs) a cost-effective solution facilitates purchasing. They strengthen competitiveness and flexibility in business environments.
Customized solutions for large enterprises
While apps are an efficient solution for SMEs, large industrial companies often require customized ordering systems for C-part management. One successful project involved building a C-part warehouse directly at the production site in cooperation with a major tool manufacturer. The storage boxes were fitted with screws and the retrievals triggered automatically by changing the weights in the storage boxes. This innovative approach eliminated the need for a buyer for these special requirements. In turn it created space so that the buyer could do more important tasks. Such collaborations enable strategic buyers to establish framework agreements and at the same time, achieve transformation, networking, and efficiency.
Apps in purchasing: recognizing opportunities, overcoming fears, shaping the future
In the era of digitization, purchasing apps open up many opportunities to optimize processes and strengthen networks. Yet most importantly, they develop increasing efficiency. The examples presented here illustrate that digitizing procurement is not just theory. It’s already being successfully implemented in practice. Companies are thus responsible for recognizing these opportunities and adapting accordingly. By focusing on the fact that apps don’t serve as a replacement for workers, they become a tool to increase efficiency. By automating routine tasks, valuable time is freed up for strategic and important tasks. Staff can then play an active role in shaping the future of procurement.
How do you see apps in your company? Let’s talk about it, either on LinkedIn or in a free appointment. You can also find more exciting topics in my book Purchasing in Transition [Der Einkauf im Wandel].
For more on this and other issues for sustainable purchasing strategies, listen to my podcast.