Data Collection and Item Master Set-up Best Practices

Step 1: Set your goal: one solution for all procure-through-payment processes

🗸 Once you’ve identified the right system to support your materials management processes, you can begin planning and preparation

– A single system with a robust item master containing all vendors, items and purchases, and facilitating a single enterprise-wide process, will eliminate one-offs, off-contract spending and rogue purchasing

Step 2: Pull the data needed to create your purchasing history

🗸 If you’re able to pull purchasing data, the last 18 months of purchases will provide a solid baseline of vendors and regularly ordered items needed to create your new item master

🗸 No PO history? Your primary group purchasing organization (GPO) might be able to help

– Starting with clean, neutralized and complete data is critical. Check if your GPO can provide this data collection service

🗸 If you elect to take this journey yourself, start with your primary vendors, especially the distributor from which you receive the majority of your supplies

🗸 If you don’t have a realistic way to create your PO history, start by printing out all vendors from your accounting system

– Contact the vendors directly to request a 12 month history file and from there, a PO history can be assembled

Step 3: Build toward supply chain control, with control over every transaction

🗸 Create a process where every purchase goes through your materials management system

🗸 Create a purchase order for every purchase; route every purchase for approval

🗸 Redirect buyers away from purchasing through individual vendor websites

🗸 Be on the watch for invoices that get paid without validation of receiving the supplies

Step 4: Set a benchmark for the percentage of items you need in your system at go-live

🗸 You might not have 100%, but determine what will work for your organization

– Will the 80/20 rule work? Identify the items purchased and consumed at the highest rate

⋅ If you’re planning to track inventory usage, you’ll need a higher percentage of the items you purchase (as close to 100% as possible)

⋅ If you’re using your new system for procurement only, you may be able to target a lower number – be sure to cover at least 85% of the items you order

– Make sure you’ve got the correct item descriptions and pricing when you go-live

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