According to a report, 39% of companies are looking to improve visibility in their distribution and operations. Due to this, companies are tripling their focus on upgrading their vendor management.
Most packaging vendors still work manually and often offline. These outdated processes might be harming your bottom line at a much larger scale than you realize. Therefore, it’s time you take a hard look at your vendor management practices.
Let’s explore 3 signs why you need to automate your packaging vendor management.
The vendor called to say your order has been dispatched. A week later, you are still waiting to receive the delivery. Perhaps, due to external factors, the roads are blocked causing problems with transportation.
Over time, multiple vendor management involves juggling purchase orders, invoices and streamlining inventory across locations. It also involves more cost and time to deal with price negotiations and supply chain execution for different locations.
To avoid such delays, you have to constantly follow up with vendors. More manpower is spent chasing down orders. If your vendor is located in another location, calls might not go through. The quality of the packaging material can also suffer.
Even managing multiple packaging vendors on emails and calls can cause chaos.
A digital procurement platform can help you identify and discover local vendors to cut down costs and time. It also means that you will have to deal with a single point-of-contact. This will drastically reduce any chance of mismanagement.
You can track multiple orders on the platform in real-time. Moreover, you get notified at every stage from production to dispatch and receive proof of delivery. View the status of shipments and know when an order is delayed and where.
With such reliable insights, you’ll soon be able to streamline your supply chain and improve packaging vendor management.
When the packaging material supply dwindles, you might alert vendors of your requirements. After they accept your order, they begin production. The next phase involves quality checks and transportation to the desired location. All of this combined can take up to 30 days.
For instance, you have not stocked enough packaging material. Suddenly, you are selling more than you have anticipated. In such cases, a prompt response from your packaging vendor can save the day.
But if it takes 30 days or more to replenish stock, you might lose out on sales and incur heavy losses. Read more about it here.
Establishing an open PO process with your vendor to shorten purchasing lead time.
Packaging material is often ordered in high volumes and across SKUs. This leads to multiple purchase orders, delivery dates, and destinations. At the time of need, an open PO can cut down the time to replenish stock by 5 days.
Open POs can also remove any scope of error as things can easily go missing or get overlooked. You don’t have to constantly place orders for the same packaging materials over and over again.
According to a recent report, 20-30% of the total inventory cost of a company is allocated to inventory carrying costs.
Packaging material inventory, like any other product, takes up warehouse space. Storing and maintaining the packaging material can add to your costs.
Reasons why your inventory management is inefficient:
Defining safety stock levels and communicating the same to your vendor can help create a leaner packaging supply chain.
Needless to say, this process can be simplified by regularly auditing your stock levels. With inventory audit reports, you can glean useful information. You will be able to identify inventory turnover rate, slow-moving stock and more.
Struggling with packaging stock-outs? Here's how you can manage inventory with technology.
Communication is the key to seamless vendor management. Technology-enabled vendor management can give you clear data and improved services. Eventually, automating these processes can make your business healthier.
Do you want to improve your packaging vendor management? Chat with Bizongo today and our team will be happy to help!