Streamlining PO’s

Introduction

In an industry where efficiency is paramount, a leading rubber producer faced significant challenges managing a high volume of purchase orders (POs). Fully integrated into an Electronic Data Interchange (EDI) setup for purchase order and invoicing processes, the company sought to reduce the operational costs and resource allocation associated with their extensive procurement activities.

Challenge

Traditionally, the rubber producer sent individual purchase orders to distributors authorized to sell from nearly 100 different manufacturers, contributing to the complexity and volume of transactions. Each year, this process resulted in the issuance of approximately 33,491 purchase orders, each incurring substantial processing costs and administrative burdens.

Solution with VANTAGE

Partnering with VANTAGE Electrical Group, the rubber producer adopted a transformative approach to managing their procurement operations. Under the VANTAGE model, the producer was able to consolidate purchase orders for multiple manufacturers into single submissions. This innovative approach enabled:

1. Single Purchase Orders for Multiple Manufacturers: VANTAGE’s system allowed the rubber producer to include products from multiple manufacturers in a single purchase order, significantly reducing the number of purchase orders needed.
2. Automated Routing: VANTAGE automatically routed these consolidated orders to the authorized distributors for each manufacturer, eliminating the logistical complications of managing separate orders and distributors.

Results

The adoption of the VANTAGE model led to dramatic improvements in efficiency and cost savings:

1. Reduction in Purchase Orders: From 2016 to the present, the rubber producer reduced their total number of purchase orders from 33,491 to 21,671, a decrease of 11,820 purchase orders or a 25.79% reduction.
2. Cost Savings: With an estimated median cost of $100 to process each purchase order, the rubber producer realized a total savings of $1,182,000 over this period.

Conclusion

The VANTAGE Group’s innovative procurement model provided the rubber producer with a streamlined, efficient, and cost-effective method for managing purchase orders across a diverse range of manufacturers. This case study exemplifies VANTAGE’s commitment to delivering solutions that not only meet but exceed the operational needs of their clients, ensuring significant savings in both time and money.