There are few things in life as guaranteed as a construction project taking longer than expected. From financing to ordering to logistics—big and small, issues can accumulate into an avalanche of project delays. And with time being so universally equated with money, these delays add up to increased costs. Any opportunity to be more cost efficient is most certainly welcome. And even something as simple as improving your purchase order process can mean significant savings.
Buried Under Paperwork
Traditionally, the construction process revolves around a large amount of paper—even in our modern, digital world. From contractual documents to blueprints to purchase orders, paperwork has a way of piling up. Have you ever considered the cost of each piece? And we’re not talking about the price of paper, but rather the cost of each part of the process surrounding each piece of paper. Every part of the process has a cost, both in time and expense. And while some paperwork is unavoidable, there are ways to eliminate costly, time-consuming steps in one key area: purchase orders (PO).
Hidden Costs Beneath the Surface
When it comes to ordering materials in the field, there are a lot of steps involved—possibly more than you realize. Much like the tip of the iceberg cresting above the water, it’s easy to forget the mass that lurks below. In the following diagram, you can see just what a purchase order process may currently look like:
Conservatively, there are nine steps on the left-hand side. But you can also see that the hands-on, human interaction required adds steps and delays to the process—expanding the list to over 15. And as busy people are pulled away from other tasks just to complete a purchase order, the cost of each order snowballs.
Communication Will Improve Your Purchase Order Process
As you can see on the right-hand side of the image, there is an easier way. Optimizing communication between those in the field and those supplying the resources creates cost efficiency. The key is streamlining processes. One way to do this is with Field e Fex™ software, an online service that operates like an e-Commerce platform. By managing material orders online, construction professionals can easily and immediately communicate, making creating POs easier than ever.
A Lesson from e-Commerce
E-commerce business models are thriving and have climbed from 5.12% of all sales in 2007 to nearly 14.5% of all sales in 2018, representing more than half of all retail sales growth in 2018. Have you ever wondered why this model took off and continues to grow? The e-Commerce model eliminates process waste and streamlines ordering—creating an improved PO process. Though the construction industry isn’t like online ordering giants such as Amazon, there is an important lesson to learn. Eliminating steps in purchase order processes makes operations more efficient and cost-effective.
How it Worked for One Contractor
Field e Fex software helped an electrical contractor in Upstate New York reduce process waste, create cost efficiencies, and increase profits. The software allowed employees to start purchase orders on their smartphones and tablets. As field personnel submitted orders from a web-based material procurement app, they were prompted to answer key questions. They were also able to submit time and material tickets digitally while communicating every transaction instantaneously to those associated with their specific project. The benefits were immediate, with a 25% increase in efficiency while ordering material, leading to a 35% reduction in overall purchase order costs. Additionally, the software’s digital time and material module allowed for seamless billable submission, ensuring more punctual invoicing that increased the contractor’s daily cash flow.
Ready to Dive into More Efficient Ordering?
We can help you evaluate your current processes to see what’s hiding below the surface, sinking your bottom line. We’ll work with you to recommend the products and services you may need, including Field e Fex software. Contact us today!
What does your current PO process look like? Let us know in the comments.
*Written with Field e Fex