Optimize your purchasing department
In a world of rapid and constant transformations, the organization of the purchasing department becomes essential in order to be able to respond quickly to these changes. Therefore, we have separated three articles for you to organize and optimize your department. Enjoy!
Transforming the purchasing sector with planning
In an agile world like the one we live in, in which the dynamics and paradigms of supply chains change rapidly, digital transformation in any sector, including the purchasing sector, is unavoidable.
But for this transformation to be successful and expand the competitiveness and profitable potential of a business, we need to ask ourselves: how to promote this structural change in a sector that normally has traditional methods and needs to invest in updating and qualifying its employees?
Elaborating a good purchase planning that ensures greater predictability of demands, greater agility and better negotiation conditions – especially when opting for an annual contract with suppliers, which keeps the value of the parts quotations unchanged during the contracted period.
Benefits of purchasing planning
Planning in the purchasing sector is fundamental for the financial and cash flow health of an organization. It ensures that production will never stop due to lack of parts and that, when necessary, there will always be parts in stock. In addition, it avoids scrapping of parts, waste, unnecessary expenses – such as air freight in the case of last-minute purchases – and no lack of cash for any fundamental purchase.
Proper planning is capable of offering the procurement sector greater visibility of purchases, which can provide many benefits. Some of them are:
- Avoiding extra expenses, which blows the department’s budget;
- Greater efficiency: it avoids rework, forgetting materials to be purchased and prevents the same material from being quoted by more than one employee;
- Allowing the consolidation of orders, which makes negotiating the prices and deadlines for payment and shipment easier, and generates savings;
- Avoiding delays in the arrival of materials;
- Evaluating the need for technical knowledge to support the acquisition process. Especially when the internal technical capacity of the purchasing department is not available or is insufficient;
- Monitoring the purchasing process to analyze actual performance regarding planned activities and thus promoting adjustments – continuously and agilely;
- Allowing the purchasing department to meet additional needs with more quality and speed that were not foreseen in the initial planning;
- Increasing the transparency and predictability of the purchasing process.
The role of supplier choice in procurement planning
Procurement planning will only be effective if it includes the supplier qualification stage, which can avoid several inconveniences related to contracts closed with inadequate companies.
And problems with suppliers happen more often than you might think. A virtual community dedicated to purchasing professionals, Sales Hacker, has evaluated the relationship with its suppliers. Among the results obtained, we highlight two very worrying data:
- 84% of professional buyers reported that they always or often do not receive feedback from suppliers regarding their inquiries to purchase various materials;
- In relation to after-sales, 76% admit that the lack of return always or frequently occurs when they ask for information from the seller about any aspect of the purchased product – and many times already paid.
Many times, the discovery of a bad service, whether in quality, price, punctuality, ethics or transparency, only happens after being hired. That’s why it’s so important to research the supplier’s reputation before closing the contract, use advanced negotiation techniques and create performance indicators to analyze the services offered.
An even more practical option is to count on the services of companies specialized in the acquisition of materials, which can offer many advantages to the organization.
Annual purchase contract: is it worth it?
The option of an annual purchase contract with a specific supplier helps to plan most of next year’s purchases and close their values, ensuring that everything is within budget. Also, this modality optimizes the purchaser’s routine, since the same quotations made when the contract was closed don’t need to be repeated when the part becomes necessary. Having an annual contract is our golden tip to strategically plan your department’s purchases, from short, medium and even long term.
Soluparts is a spare parts specialist that offers an annual contract. In order to close said contract, it’s necessary to make a survey of the acquisitions made in the previous period, as well as meetings with all sectors of the company to understand the individual demand of each one of them in the next year.
With this list of indirect materials, sent by the client, Soluparts’ team quotes each one of the items, consolidating them in a single document – which is used for contract elaboration. This way, during the current year, when there is demand for any of the listed parts, there is no need to send a new quotation request – just send the purchase order, which greatly benefits the process of purchasing parts as it becomes more agile.
In Soluparts’ Annual Contract, the price of parts remains unchanged for one year. Thus, the buyer becomes a contract manager, and gains time to handle other strategic tasks.
If you still have any questions about how it works and what are the benefits of the Annual Contract, we have prepared an infographic to help you, click here to download.
To understand how to start drafting an annual contract for your company, talk to our spare parts specialists.
5 reasons to count on a company specialized in indirect material procurement
In the last few years, we have been following significant changes in the global economy that bring a lot of barriers and opportunities for organizations (digital transformation, concern with more sustainable practices, among others).
For the purchasing area, there are also other challenges: reducing expenses, making right decisions, optimizing the department’s processes and contributing to the company’s success.
An excellent way to increase the department’s efficiency and solve its main problems is to count on the right partners. We list below some reasons to partner with a company specialized in international indirect material procurement, helping to deal with these complex challenges faced in the current context. Keep up and get good results!
1. Premium service
Getting the right guidance, at the right time, is fundamental for decision-making in a company’s daily routine.
A supplier chosen hastily can bring a series of problems: a delay in a delivery of a lot of materials, for example, can generate the paralysis of a part of the operations for a certain period, which brings great losses to the company.
To guarantee the purchase of reliable suppliers, here at Soluparts, we have developed an internal supplier ranking that evaluates essential questions such as delivery time, prices, agility in response, among other factors.
Soluparts has great market experience and access to over 15,000 manufacturers. With a clear and transparent communication, our entire team of specialists strives to provide buyers with an experience of comfort and security by doing everything to meet their expectations.
We have a constant concern with the customer’s well-being. By facilitating the acquisition process, we give, through our premium service, the possibility of finding the indirect material they need, no matter the country, manufacturer, if the part is obsolete or not, which improves their work routine.
2. Better payment terms
Negotiating prices with suppliers is something that demands dedication and energy from the purchasing department. It takes time to contact the manufacturer, explain the demand, wait for the budget to be sent, question the values, try to get to an ideal price and define the forms and deadlines for delivery and payment (the latter is often one of the most complicated moments, since the supplier wants to get paid for the material as soon as possible while for the company it is better to pay with a longer deadline).
With a company specialized in the purchase of spare parts, it’s not necessary to have negotiations with each supplier, which reduces the time spent for the execution of these activities. Also, with Soluparts, it’s possible to pay with deferred payment.
Soluparts is a partner of its clients, we understand that we are all playing in the same team, so the client’s success is our success.
3. Purchase contracts suitable for your needs
Optimizing the purchasing team’s time by reducing the amount of quotations to be worked by the professional of the department can be done through purchasing contracts.
This modality allows the quotations to remain valid for a certain period. In this case, the specialized company receives the list of products to be bought and makes the quotations. The client receives the quotations of the several pieces for approval. When there is demand for one of the materials included in the contract, the client requests the purchase of these materials at the prices already established (within the validity period of this contract).
At Soluparts, you have the option of getting an Annual Purchase Contract, which offers to our customers crucial convenience, by reducing bureaucracy and generating savings for the company.
4. Culturally diverse team to assist in negotiations
With globalization and the development of the media, the cultural dimension has become an important ally for the purchasing area of companies.
Whether dealing with other branches of the organization or partners from other states and countries, knowing more about the other party (heir customs and values, for example) ensures greater alignment, which reduces the possibility of noise in communication.
In this context, being able to count on a team located in different countries, who is capable of communicating in several languages and is experienced in making acquisitions in multiple cultural contexts, becomes a differential.
At Soluparts, our employees, of various nationalities, have international experience, essential for purchasing management with suppliers from all over the world.
5. Access to relevant content for professional day-to-day life
In today’s world, information and data are the new oil. In the purchasing sector it is no different: having the access to information about market trends (such as the regionalization of supply chains, predicted by specialists, in the post-Pandemic world of Covid-19), is something extremely relevant when strategies are being defined and there is the interest to remain competitive and updated.
Soluparts empowers indirect material buyers by providing quality content on challenges related to international purchasing, supply chain related innovations and new technologies and also provides information and tips for you to improve your personal skills, that are essential for your professional growth.
Tip: access our blog to keep up to date with news that will make your routine more productive and effective!
Soluparts: security, trust and comfort in your indirect material procurement process
Maintaining productivity and optimizing time, in a period marked by intense and rapid changes, is a challenge to be faced by the various areas of a company.
To ensure more security in your decisions and make purchasing indirect materials more efficient, count on Soluparts, our team is specialized in providing support, solutions, commercial conditions and better prices for our partners, ensuring that all your demands are met.
We have offices in several countries (Brazil, Germany, Portugal, Hong Kong and United States) and we count on experienced negotiation professionals.
For more information, visit our website and take the opportunity to request a quote with our team.
Benefits of purchasing indirect materials abroad
In a world characterized by the presence of numerous global supply chains, with products being marketed by partners in different countries, the import process gains strength, agility and practicality, becoming an advantageous decision for buyers interested in getting the best deals.
In the automotive sector, for example, a survey carried out by the Brazilian magazine Quatro Rodas reveals that importing parts can be 80% cheaper than buying from local suppliers.
As much as this practice is commonly adopted around the world, there is still a certain fear in the business sector regarding the procedures that involve importation. In many cases, buyers end up preferring to keep local partners, even if that means paying more for parts, rather than establishing agreements with international suppliers.
In this article, we will discuss the benefits of purchasing indirect materials abroad, in addition to give you some relevant tips to increase the degree of success in this type of negotiation.
Why make international purchases?
There are a number of reasons why importing a replacement part or indirect material is interesting compared to buying locally, other than optimizing the procurement process and increasing the companies’ profit margin:
● Conditions are advantageous: factors related to the country where the purchase will be made (taxes, average wages and other expenses with the production of parts) must be considered in the import process.
● Smaller costs: in many cases, the cost of each part is lower compared to the local market. When the buyer purchases a nationalized part (produced abroad and imported by a national supplier), the value includes the cost of production, its nationalization and the profit of those who sell.
● Product quality: if you choose an international purchase, you can acquire indirect materials produced from more advanced technologies and processes.
● Access to exclusive resources: some materials can only be found in some parts of the world, guaranteeing direct access to them.
9 ways to increase the benefits of importing
Here are some tips for conducting purchases in an international context:
1. Analyze your supply chain frequently
It is important to review your supply chain from time to time as a result of possible changes in the foreign market (such as the formation of alliances, the end of trade embargoes or the adoption of new practices by countries). In other words, it is important to discuss periodically new and favorable trade agreements that can reduce or eliminate taxes, interesting global trends in the production of a certain product and new bilateral agreements between nations.
Another point of attention is the lead time and the type of transport adopted. Depending on the piece, the most convenient is air freight, used 80% of the time by companies. In this case, the deadline for receiving the material can reach one week, which sometimes corresponds to the delivery of a piece purchased in the national market.
In cases when the part requires sea freight, which average delivery time is over a month, it’s important that you can count on a structured purchases plan. It is also worth remembering that when buying in large quantities the price of your freight decreases.
2. Understand in depth the origin and availability of parts in the domestic and foreign markets
Before defining which parts will be purchased abroad, it is important to make a careful assessment to identify and understand the availability of this material in the national and international markets.
An indirect material of smaller dimensions and high demand, for example, is probably constantly imported in large quantities by the national supplier, which makes its cost advantageous even in the domestic market. In such cases, the part may even have prompt delivery.
It’s also important to check the existence of similar parts, it’s possible some of them are available in the national market. For this, try to understand well the demand of the company’s maintenance area.
On the other hand, in the case of an obsolete part or a part used only in more specific situations, it may be worthwhile to import. Also note if the required part is produced only on demand or if it is always available on stock for purchase – if so, try to understand if your company has a warehouse near a particular manufacturer, this will lower the delivery costs.
3. Conduct risk assessments
In addition to having a team focused on risk management, it is suggested that your company’s logistics team assesses risks in a way that allows you to be informed about possible delays or other issues before their occurrence. This way, you can have alternative options to increase the security of your business operation.
When planning nationalization, ensure that your company is working with good agents (insurance companies, carriers, forwarders and freight agents recognized in the market) and keep in touch with everyone throughout the process.
4. Maintain relationships with local trade associations
Associations focused on this topic, whether in the country where the company is located or where you intend to make a purchase, provide important news and information on international trade and safety tips. They can even help you secure new business opportunities, broker new partnerships and increase your list of trusted suppliers and contacts.
5. Have good software for managing acquisitions
Working with different cultures, monetary systems, laws and languages can make payment control, compliance and deadlines very complex. Having a good information system to manage purchases, contracts and communication with partners and other audiences is crucial to prevent something from being overlooked. To know more about the subject, read our article on the best software for purchasing management.
6. Define work goals
Setting goals is crucial to achieving the expected success – a good way to start is to determine the cost savings that can be achieved by starting to buy more parts from the international market instead of the national one.
It is a highly complex activity, since it involves issues external to the company, escaping its control. However, even if the goal is not achieved, it is a good way to assess business practices and create strategies for future business negotiations with international partners.
Before setting your goals, it is important to try to understand the forecast of the demands for a certain period and consult the budget available to your department.
7. Consolidate shipping
Bulk orders help reduce costs related to payment, shipping and custom fees. When developing a good relationship with the supplier, it is possible, for example, to negotiate the import of more products at a reduced cost. In this sense, Soluparts offers the possibility of cargo consolidation.
It is also a good strategy to buy products at certain times of the year, eliminating the need to order them when demand is high, and preferring to place large orders over requesting smaller one-off shipments. On the subject, find out the Annual Contract, offered by Soluparts.
8. Research the local area to understand its concerns
Knowing the area well in order to map possible points of attention and mitigate them before closing deals with the international partner is essential to have a successful purchase – the task is time-consuming, however it’s extremely necessary. Therefore, the ideal is to have an international partner who already knows all the markets and operates in over 40 countries – like Soluparts.
9. Define clear expectations
Having signed commercial agreements in writing with suppliers and partners reduces the possibility of problems and offers ways to assess the conditions established in the event of a conflict, ensuring security for both parties. On this point, see our article on the benefits of contract management in companies.
In this article, we discuss the benefits of purchasing indirect materials in the international market, helping to optimize the supply chain and reduce the company’s operating costs.
The value of your purchases will be lower if you choose to do this type of transaction from a supplier abroad. Sometimes, importing an item requires planning, but when you have a partner specialized in purchasing indirect materials in other countries, you can achieve a lead time very close to that practiced by national sellers.
Tip: The important lesson in this article is not to avoid making a great international deal because you do not fully understand the import logistics. Buying parts abroad can offer several benefits and greatly reduce purchasing department expenses. Soluparts logistics team and your company’s logistics will take care of the entire process, so the part arrives, at the right time, in your industry.
At Soluparts, we have highly reliable logistics agents that work with modern technologies (such as GPS tracking) to ensure the monitoring and inspection of cargo in order to avoid delivery problems or delays.
Usually, we use Incoterms EXW, however, we can adapt our logistics according to your needs, leaving you free to choose the Incoterm that is most convenient for you.
Contact a Soluparts specialist, today.