Purchasing Processes Mapping: a strategic tool

The current economic climate, marked by increased competition and a quest for continuous innovation, is prompting companies to equip themselves with relevant strategic tools. The successful deployment of these tools starts with an introspection of the organisation. Purchasing mappingis emerging as an essential trend, as it responds to all of these challenges, both in terms of management and optimisation .What makes this tool so special, and why has it become central to modern purchasing management? Let’s take a closer look together.

What is procurement mapping?

Procurement mapping is a matrix of supplier data analysed through the prism of a diagram or charts. It is a visual representation of your company’s expenditure which, if carried out properly upstream, can become a valuable source of information.

Among other things, it enables you to identify your spending families,your strategic suppliers and the risks and opportunities with a view to improving your company’s purchasing performance. This mapping analyses the whole, while providing a detailed view according to the purchasing segments used.

The benefits of purchasing mapping :

When it comes to procurement mapping, the benefits are numerous. But what practical impact could it have on your company’s management?

• With a well-established map, you can quickly identify areas for improvement and optimise your purchasing process. In our experience, the refined visualisation of a segmentation has the power to rationalise expenditure.
• By analysing expenditure using purchasing categories, you can keep your volumes under control. Cross-reference this data with an understanding of your supplier interactions, and your relationships will be strengthened. Knowing your suppliers is the key. With the help of a purchasing map, your negotiation strategies will be strengthened.
• Reducing risks: supplier dependency, price rises during inflationary periods, stock-outs, etc. Who doesn’t fear the negative effects of the economic climate? Mapping offers you valuable prevention against potential problems. And above all, the ability to act quickly in the event of unforeseen circumstances.

The key components of effective purchasing mapping :

Before you embark on mapping your company’s purchases, ask yourself the right questions and define your objectives. Here are the elements we consider essential:

• Define your organisation’s main purchasing categories. Think of it as purchasing families if that’s more convenient for you. Start with 7 to 8 main families and a sub-level for each. For information, the most detailed purchasing maps have up to 4 levels: keep it simple!
• Identify the main suppliers and define their importance in your supply chain. Also include a scale of difficulty for changing supplier, to help you prioritise your actions.
• Qualification and selection process: How do you choose your partners? What criteria do you use? All the stakeholders need to be considered in order to make your purchasing more effective.
• Interaction points between purchasing and other departments: A company does not operate in silos, and your mapping should reflect this interdependence.

How do you draw up your own purchasing map?

At this stage, you’re probably thinking: “That’s all well and good, but how do I go about it? Don’t panic, we’re here to guide you.

First, determine the objective of your mapping. Is it to optimise production processes? Strengthen supplier relations? Control risks and prepare for alternatives? These objectives can obviously be combined. The main thing is to keep them in mind when you analyse your expenditure, so that you can segment your purchases.

Next, put the following elements together in the same file:

• Purchasing portfolio containing your purchasing families.
• Supplier panel to which you associate one or more of these families.
• Purchasing data for the desired period.

If you have problems collecting data from your accounting software, ask your company’s accountant directly for the purchasing journal. With the combination of all these items, segmenting your purchasing volumes becomes child’s play, the most difficult part being defining your objectives.

You can also select tools or software that are better suited to purchasing. There are now specialised business tools that make this task easier. You can also map your purchases using the Kraljic Matrix.

Finally, be careful. Mapping is not a one-off exercise. It must evolve with your company.

As we have seen, procurement mapping is much more than a simple tool. It is a strategy, a guide and a companion for any company that wants to optimise its purchasing management. If you haven’t already adopted it, it’s high time you considered implementing this type of tool. We are convinced that it will be a relevant source of information for your company!

Want to learn more about our procurement management software Weproc? Contact us or request your free 15-minutes demo below!

Team Weproc

Weproc is a SaaS software specialized in digitizing the procurement process of companies. From purchase requests to supplier invoicing, through the validation process, Weproc is designed to simplify the purchase management of SMEs and mid-sized companies by centralizing all purchase-related activities.