Importance of the purchase planning in the manufacturing industries or trading companies, to fulfill their continuous work orders are timely and their purchases are getting streamlined. Any time effective and efficient purchase planning is done, which can reduce the operational costing and also maintain the cost of stock keeping in the warehouse. Purchase planning is the process wherein a company is deciding when, what to buy and from where & from whom to buy. Simultaneously inventory management which saves the money and allows customers to fulfill customers requirements in time. Inventory management software helps in cost controlling the operation expenses.
What is Purchase Planning?
Purchase Planning is a necessary process in inventory management, where the purchase manager is responsible for all the requisition related to stock in the warehouse. Simple term purchase planning facilitates a structural approach to the management of purchasing activities which define the lucrative material purchase plans, like what should be purchased, in which quantity and from where it should be purchased. Planning typically takes place as a component of the budgeting process, in which inventory needs to operate the business properly and to control the cost of the goods with suppliers.
Read our blog : Purchase Planning With Efficient Inventory Management System
Main Factors When Developing A Purchase Planning
The customer is the first consideration for any business; without customers, there’s no revenue. In the wholesale distribution of goods, the customer is commonly a part of a wider supply chain, so reliability is crucial. Procurement planning needs to make sure that stock availability at all times, and this should be the primary aim when purchasing.
Warehouse and Storage Capabilities
Warehousing has its own carrying costs which are irrelevant to core operations, like staffing and building service costs. It’s essential that the business makes full use of the facilities so as to maximize revenue potential. The purchasing strategy also needs to take the maximum storage capacity into account – overstocking might reduce the available capacity, so orders should fit in with demand. Similarly, the business should be ready to move well-stocked items to warehouses where there’s a deficiency to preserve storage space.
Ensuring a solid flow of revenue through good customer relations is also important, but the business needs to be on a firm footing to be in a position to serve the customer. Overstocking can decrease working capital, potentially jeopardizing the ability to grow and diversify. It will also lead to stock inactivity, reducing profitability. The purchasing strategy therefore must balance business needs against customer needs.
As well as the purchase costs of stock, the business needs to consider how supply chain support functions fit the budget of the company. The purchasing strategy should reduce costs like warehouse staffing and HR management while core operations must be streamlined for maximum efficiency to reduce the cost of functions that deplete profits.
Why is Purchase Planning Necessary for a Manufacturing or Trading unit?
As we all know about the complex functioning of Inventory Management, where we require an effective structural purchase planning approach to purchase raw materials on an interval basis. With the inventory software, purchase planning allows manufacturers to fulfill continuous work orders timely. Effective purchase planning can reduce the overall purchase plan cost and warehouse stock keeping cost and plays an important role to run & manage a Modern Warehouse.
Major obstacles in purchase planning Process
- How to do Purchase Planning?
- How to handle & plan Work orders?
- How to handle Vendors?
- How to do Product Mapping?
- How to do vendor tagging?
- How to Float Purchase Inquiries?
- How to handle Vendors Purchase Quotation?
- How can Compare Vendor Quotation?
- How to handle Purchase Orders?
- Is it possible to handle all the Pending Purchase Plans on a single Computer screen?
- How to handle Pending Purchase orders with Vendors?
- How to increase Inventory Productivity?
- How to Handle Purchase Bills?
- How to handle entire Purchase Returns @ Single Screen?
- How to handle material movement cycle?
- How to do Stock adjustment?
- How to fill the Gap Between Purchase & Inventory Tier
- How to Make Purchase Indent?
- How to Check and Define Product Re-Order Levels?
SalesBabu online inventory management software provides a robust purchase planner tool on a single screen, where companies can easily manage their purchase quotas and are able to schedule purchase plans effectively.
Benefits of SalesBabu Purchase Planner with Inventory On-Demand
- Effective Purchase planning: Purchase planning is all about the stock monitoring, purchase order management – receipt of order quantity, what is the receipt date, when was the delivery date, what mean delivery was done, etc. apart from this demand forecasting and other related activities is the effective purchase planning. Inventory can be optimized with the inventory management software.
- Purchase Order Handling: In the inventory software, purchase order – PO is an official document shared with the supplier for supplying the materials. In the PO the company will indicate – how many quantities required, what type of product or raw material and the mutually agreed price.
- Enable to Float PI’s(Purchase Inquiries): Purchase requisition inquiry is used to inquire with the suppliers for the saleable stock and raw material items for the production. PI will have the PI request number, date,supplier name, product or raw material details. This is floated to different suppliers to provide their quote to the inquiry placed companies. .
- Compare Multiple Quotation with Multiple Vendors: During this process the multiple vendors share their quotations specifying the quantity and pricing. In the inventory control software you can check the comparison on the received quote price and list out the least price quote before placing an order with the vendor.
- Get Re-Order Level on Product and Raw Materials: With the help of SalesBabu inventory software India, reorder level status has been provided and the inventory level shows when to place a new order to maintain a safety stock.
- Handle entire Work Order: Inventory management software helps in the work order process in a systematic way. Handling a work order – new job assigning a task and review through the various operational steps. On completion of the work order, the process will be considered as a blueprint of the company project success.
- Facilitates Job Work Scheduler Separately: Job work scheduling is managing the work allocation as per the staff availability. Through online inventory management software, it enables the start and finish on every job task.
- Enable to make P Q (Purchase Quotations): Purchase quotation is the supplier’s response to a request for quotation issued by a purchasing company for the products or raw materials.
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- Enable to do multiple GRN against the Partial vendor Order: In this case inventory control software allows to configure whether to enter GRN for all the goods, also allowing to enter partial delivery received from the supplier.
- Enable for Entire MRN(Material Receipt Note) on one screen: Material Receipt Note is indicating the receipt of material details from the supplier and which is delivered at the company. .
- Manage the entire Vendor Bucket: Vendor Bucket is all about the aging report related to the supplier payments.
- Get real time Inventory Updates on Stock: With the help of online inventory management software, real-time updates of the inventory levels and sales of the stocks can be tracked. It ensures stocks availability is accurate in one or more locations.
- Product Sampling: Product sampling is a process wherein many people are not required for the counting of the huge number of stocks. Through involving many people for the stock counting it may not provide accurate stock count. Thus with the help of the inventory software the product sampling is available and it takes very minimal time in counting.
- Capture Sales Returns: Inventory management software helps to capture product sales return. Sales return of the product can be many reasons. Product may be not suiting to the customer, it may damage the piece or because of the quality.
- Vendor’s Mapping with Products: Vendor mapping with the products which is allowed in the online inventory management software. This feature is used to create and map to the supplier’s product with the product numbers specified by the company for self identification.
The Core Value of SalesBabu inventory management software is that it can track the entire stock transaction at micro level and can provide real time inventory status on material and allow companies to do effective purchase planning against the stock requirements. Hence, SalesBabu inventory software allows organization to manage & synchronize entire Purchase Plans, Pending Purchases, Vendor & purchase Quotations and Purchase orders on a single computer, which enable inventory manager to keep track of all the Stock Movement (Inward & outwards).