Ask twenty different procurement ‘experts’ “what is the total cost to process a purchase order” and it is likely you will receive twenty different answers.
- The Supply Chain Digest™ gives a range of $35.88 to $506.52 to execute a purchase order. This 2006 study compares top performers and bottom performers among many different companies (see figure 1).
- Purchasing Today™ – “Experts estimate that it costs companies between $100 and $150 to process every paper-based purchase order, regardless of whether it for a $500,000 piece of operating machinery or $30 worth of paper clips.”
- $96 – according to Ernst & Young.
- $150 – according to Gunn Partners.
- $190 – according to Deloitte & Touche study of 18 large companies.
See what I mean? If you truly want to know your procurement costs you must know everything involved with an order; salaries of all individuals involved, holding costs, management costs, benefits, telecommunications, paper costs and system costs.
You may arrive at a number that is surprisingly higher than what you thought! Managing the supply chain in most companies is labor intensive, time-consuming and very costly. GPnet™ will reduce costs, eliminate obsolescence and most importantly – automate supply chain transactions. One Purchase Order – One Bill!