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Purchase order automation – doing it the AI way

Intelligent PO processing – doing it the GI way

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Can a retail business use advanced technologies like AI for purchase order processing? What would be the outcome if they did? In this blog, you will find how you can leverage intelligent automation to unlock unprecedented opportunities.

For retail vendors or distributors, the importance of purchase order (PO) processing is self-evident. However, most businesses are still stuck with manual PO processing, which is time- and resource-intensive but highly ineffective. Before starting on how intelligent automation can be a powerful tool in your arsenal, let’s briefly discuss the shortfalls in manual purchase order processing.

The common challenges in manual purchase order processing

For a vendor like you to maintain strong customer relationships, you must ensure timely and accurate delivery of goods. With manual processes in place, the journey from receiving a purchase order to creating a delivery order on your ERP system feels like driving on a bumpy road. A lot of errors and inaccuracies creep into the process and undermine the efficiency of your services.

While focusing on the core business, most enterprises miss the adverse impact of the manual processes on purchase order processing. If you are also overlooking these challenges, let’s quickly highlight how the inefficiencies are eating into your profits and productivity.

Speed – running at a snail’s pace

Manual purchase order processing is extremely slow. As a vendor, you deal with numerous retailers sending thousands of purchase orders to you every month. You need to prioritize the purchase orders, ensure products are available, and upload the data into your ERP systems without missing any line items. How much time would this take on average?

From our observation at several retailers and distributors, we identified that businesses would need more than a day to process one purchase order manually. This means, you need to wait for at least one day before actually start catering to your customer.

More time, more costs

For manually processing the pouring in purchase orders, you need to hire more staff and spend more resources. This directly translates into high operating costs for your business. If you could expedite the processes, wouldn’t you spend the resources on more strategic aspects of your business?

Inaccuracies – to err is human

Manual processes are notoriously error-prone due to the extensive human involvement at every step. Overloaded with work, your staff might overlook a line item. They might miss a purchase order itself. Your data entry operator might type a product code wrong. In any business, inaccuracies in manual processes are inevitable. We observed that vendors, on average, miss 18 percent of line items on purchase orders. These inaccuracies directly impact customer satisfaction, straining customer relationships.

Our experience at a leading retail distributor – Intelligent purchase order automation

You might be wondering if you can use AI technology in your business. Any business utilizing human resources to process data on paper can use AI and automation. You do not have to be a technology company or need a strong technology team. Let’s explore how a leading FMCG sales and distribution company in UAE broke the mold with an intelligent automation solution and streamlined LPO processing.

Every month, the company processes more than ten thousand LPOs. The company was reeling with challenges stemming from manual processing and realized that automation would give them a competitive advantage. The company tried robotic process automation, but the initiative failed as they couldn’t justify the ROI. When the company reached out to us for help, we identified that we could leverage intelligent automation to turn the tables.

Our intelligent purchase order automation solution simplified and streamlined LPO processing – from capturing purchase orders from emails, extracting data from the LPOs, and validating the data to uploading it to their SAP systems.

The intelligent automation solution removed the need for human intervention for LPO processing. With the human-in-loop approach, the solution ensures most accurate and efficient processes, bringing down the time to LPO processing from more than a day to ten minutes. This provided the company an opportunity to optimize its resource utilization, which translated directly into huge savings in operating costs.

With faster and accurate purchase order automation, the company is now delivering better services to their customers, strengthening their customer relationships.

Want to dive deeper into the transformation story of the retail distributor?

Read all about it here

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