The high-maintenance nature of consumers and increased global trading activity has caused manufacturers to consider the pros and cons of outsourcing to a procurement services program. Companies are sourcing from organizations originating from across the globe and customers are demanding fast delivery of quality goods, which has made financial management more complicated for producers.
An international platform
According to Procurement Leaders, the rise of consumer markets in Brazil, Russia, India and China will likely cause many material acquisition companies to set up physical operations in these countries by 2025. As a number of these organizations are headquartered in different countries, a need for software specializing in currency exchange and account management may rise at a significant rate.
The source predicted that Chinese brands will possess extensive leverage in particular domestic and even some international markets, which may cause Western firms to base strategic sourcing on standards, designs and blueprints set by Chinese industry leaders.
In addition, sub-Saharan Africa's manufacturing sector is expected to grow significantly over the next decade due to miscellaneous social and demographic reasons. As of now a fair amount of foreign investment has been funneled into the region's economy, inciting a need for overseas account and relationship management processes.
Moving to the electronic realm
Transitioning the procurement process from a paper-based practice to electronic workflow appears to be the wisest choice for manufacturers, especially in light of the fact that relationships among global distributors, raw material producers, governments, retailers and other economic participants has expanded with the rise of cloud computing and the Web.
Greg Pfahl, a contributor to IndustryWeek and audit partner of Hein and Associates, noted that automated processing significantly reduces an organization's chances of encountering fraud and eliminates mistakes. Most importantly, it enhances a manufacturer's ability to recognize and scrutinize revenue quickly and efficiently. It can also help organizations resolve complex order and payment instances.
For example, bill and hold transactions can be especially tricky because even though a sales agreement has already been established, the entity purchasing the products in question requests that the manufacturer delivers the items directly to its customer's buyer or ships the goods at a specified date. Monitoring such a procedure as well as keeping a record of it is much easier to do electronically.
In a complex, global economic society, it's imperative that all transactions are accurately observed so that overhead expenses are reduced and mistakes are avoided.