Identifying savings in the purchasing process

purchasing process

Mercateo has developed a tool that breaks down the costs of the various types of purchasing processes and provides insight into currently untapped savings potential in indirect purchasing. By focusing on digitalization, the process cost calculator reveals which areas offer opportunities for saving time (and hence also money).

Based on the findings from an extensive study conducted in partnership with Leipzig University of Applied Sciences (HTWK Leipzig), Mercateo has produced a free online calculator that helps companies to reassess their procurement process. The study, which involved more than a hundred participants, examined the entire purchasing process and analysed the average amount of time spent on each step of the process. Because the purchasing processes are virtually the same in all sectors, the study included both large and small companies in various industries.

The purchasing processes were divided into several different types: “There are non-uniform processes, uniform but non-digitalized processes, and fully uniform and digitalized processes. If you translate the time spent on each process step into costs and then look at the relative costs of those three purchasing processes, you can see the cost base per type of process and where digitalization will enable you to achieve savings”, says Dorina von Heland, Country Manager at Mercateo Benelux.

Hard facts

Even though many purchasing departments intuitively know what the consequences of a certain decision will be, they still need hard facts to back up their claims for their managers and directors. The process cost calculator shows what is currently being done within the purchasing process, what is not yet being done and which issues need to be resolved. “If your company has reduced capacity, is growing rapidly or is planning to become more international, then you need to be able to substantiate certain choices.”

Rather than calculating the exact amount of money that could be saved, the online version of the process cost calculator is a simple tool which indicates the scale of a company’s potential problem and the associated aspects so that the company can start looking for a solution.