Leveraging Procurement Software for Improved Inventory Management

Apr 13, 2022 | Procurement tools and solutions

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Apr 13, 20222 min read

Procurement software can improve inventory management and drive cost savings. Companies using procurement software have seen a reduction in inventory carrying costs by up to 25%, improvement in inventory turnover by up to 20%, and increase in inventory accuracy by 30%.

Procurement software can provide a range of benefits for inventory management, including improved efficiency, cost savings, and better visibility into inventory levels. 

One study, conducted by the Aberdeen Group, found that companies using procurement software for inventory management experienced a 25% reduction in inventory carrying costs and a 20% reduction in stockouts. Additionally, these companies saw a 15% increase in inventory turnover. 

Another report by Gartner, a leading research and advisory company, found that organizations using procurement software for inventory management saw a 20% reduction in supply chain costs and a 30% increase in inventory accuracy. FactWise enables procurement teams to have tremendous visibility across their inventory and procurement pipeline with its robust order tracking features. Users can track accepted and rejected quantities from the goods receival to quality check stages with ease to ensure inventory accuracy, with auto-calculated, accurate payment due notifications that help maximize DPO (Days Payable Outstanding).  

One company that has seen success with procurement software is GE Appliances. By implementing a procurement software system, GE Appliances was able to reduce inventory carrying costs by 10% and improve inventory turnover by 20%. FactWise helps users negotiate ideal payment terms to maximize their cash flow via minimized DIO (Days Inventory Outstanding) and maximized DPO (Days Payable Outstanding).   

Another example is that of the company called L’Oréal, who implemented a procurement software system to manage their inventory and supply chain. They were able to reduce inventory carrying costs by 15% and improve inventory turnover by 25%. FactWise enables multiple levels of quality checks – right up until the materials have been used up in the production line. This improves inventory accuracy and inventory turnover with next to zero added effort from factory operational or procurement teams. 

Additionally, procurement software can also provide real-time visibility into inventory levels, allowing organizations to quickly identify and address any potential stockouts. This can help to improve customer satisfaction by ensuring that products are always in stock and readily available. 

About the Author

Stawan is the founder and CEO of FactWise. Before founding FactWise, Stawan was the NA TMT-Procurement Leader at McKinsey. Passionate about procurement, Stawan has 15 years’ experience in enabling clients of all sizes to achieve business impact via procurement.


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