How Automation Reduces Human Error In B2B Procurement

Efficient procurement and supply chain management are essential to the success of any business. Errors are not infrequent in B2B procurement, especially when the process is manual or conducted via incompatible seller and buyer platforms that require manual intervention in tasks that should be automated.

Automation is often thought of as a time and money saver, and that’s certainly true. By automating manual eProcurement processes, we let machines do what they are good at and they almost always do it more quickly than even the best-trained human. That frees qualified employees to focus on tasks that require more intelligence than a computer can muster, helping businesses to reduce spending on staff for repetitive administrative and data entry tasks.

Human Error As The Largest Cause Of Procurement Mistakes

But there are other benefits to automation that are arguably more important. Automation also brings consistency and predictability to complex workflows. Human error is the largest cause of procurement mistakes, and, although training helps, it is impossible to reduce the human error factor to zero.

In the nineties, the aviation industry created a list of the most common causes of human error, the so-called dirty dozen list. The list includes fatigue, stress, complacency, miscommunication, distraction, and lack of knowledge. These causes of human error are universal and they’re precisely the errors that effective automation can help to overcome.

A simple mistake such as transferring the wrong purchase order information from an email to a company’s spend management system can cause huge headaches for both buyers and suppliers. Automation of communication between buyer eProcurement and seller eCommerce platforms via punchout catalogs can help businesses completely avoid that source of error.

While many procurement errors are minor, if undesirable, they can have a catastrophic effect on the health of a business. Mary Clarke has discussed one such incident: a procurement mistake made by a pharmaceutical manufacturer led to the unavailability of an important chemical catalyst, causing the shut down of the company’s facility and the failure of the business.

Automation via eProcurement and the integration of buyer and seller platforms can’t protect businesses against every type of error, but it can significantly reduce many sources of human error in budgeting, communication between buyer and seller, data transfers between platforms, and accountability.

The major benefits of automation are consistency, correctness, and repeatability. Once a workflow has been automated, the system will carry it out consistently. It will apply the same actions the thousandth and the ten thousandth time as the first. Humans are not and cannot be so consistent. The flexibility of automation lies in the ability to implement the right processes in the right way and then letting the platform take over.

The technology exists to automate many common eProcurement workflows, including:

• Cross-platform communication
• Data analytics (automation platforms provide richer and more useful data)
• Invoicing and payments
• Information gathering and delivery
• Project and accountability management

Each of these is an area in which the dirty dozen causes of human error have a significant cost impact. Automation can help businesses buy and sell faster and with less risk.

 

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