Do you know top organizations have 75-85% of their spending management under control?

Business spending management (BSM) is essential in today’s volatile supply chain market. It is vital for companies looking to improve operational efficiency by strategically identifying inefficiencies and reducing costs.

Manual processes, fragmented data, and inefficient resources lead to a lack of control over spending. This is where BSM becomes imperative in aligning spending with business objectives and market demands for overall success.

Understanding Business Spend Management

BSM is a strategic approach to managing, controlling, and optimizing all your organization’s expenditures. It goes beyond simply tracking invoices. BSM considers the entire procurement lifecycle, including sourcing, purchasing, and payment.

Companies exercise best-in-class BSM strategies to increase efficiency. They aim to reduce costs and improve their bottom lines by ensuring compliance across all spending activities.

However, spend management should be distinct from expense management.

Expense management primarily deals with employee-related expenses, whereas business spend management considers a wide range of spending activities, including employee expenses.

Key Areas of Business Spend Management

Let’s understand how BSM takes care of many key aspects of your business that help you optimize and control your organization’s expenditure.

• Supplier Management:

Not all suppliers may perform equally. BSM data helps you quickly evaluate and manage their performance in terms of your standards for quality, cost, delivery, and service.

• Strategic Sourcing:

Sourcing is about more than finding the more affordable option. It’s also about developing optimal supply channels. BSM provides a comprehensive framework for understanding the total cost of a product or service, including life cycle analysis, risk evaluation, and performance monitoring beyond the initial purchase price.

• Contract Management:

With a robust BSM, you get a clear system to monitor agreements between your organization and suppliers to ensure everyone is on the same page. You can easily check whether terms are fulfilled, performance is tracked, and compliance is maintained.

• Procure-to-pay process (P2P):

The P2P process is the backbone of BSM, where you can manage everything from requisitioning to procurements and ends with payments. You can streamline workflows across procurement and various payment stages to keep your spending cycle efficient.

• Supply Chain Management:

BSM aids in supply chain management by fostering strong relationships and collaboration with suppliers. This ensures that your supply chain is resilient and efficient and delivers quality throughout.

Also Read: Cost Savings through Contract Optimization: Tips for Procurement Professionals

Benefits of Streamlining Procurement with BSM

• Cost control:

BSM helps identify and prevent wasteful spending. Insights into spending patterns enable better supplier negotiations and purchase consolidation for bulk discounts. Effective procurement software simplifies strategic cost management, as demonstrated by India’s largest zinc producer, which reduced its supplier base by 30% for improved spend management.

• Process Visibility:

BSM streamlines your spending data so you never feel like flying blind regarding your finances. It gives you a clear picture of where and how your money flows with real-time data at your fingertips. With this transparency, you make informed decisions and strategic financial planning.

• Data-driven decisions:

When BSM provides a comprehensive spend analysis, you can confidently use this data to optimise supplier relationships, identify investment opportunities, and implement cost-saving initiatives.

How to Implement a Buşiness Management Strategy

Here is a structured approach to develop and execute a BSM strategy.

1. Analyze your current spending across different categories and departments to identify inefficiencies and set a baseline for improvement.
2. Define clear and measurable BSM objectives that align with your broader organizational objectives.
3. Research and choose the right spend management software that meets your company’s requirements.
4. Deploy your BSM solution with a strong implementation plan, including timelines, resource allocations, and key milestones.
5. Set KPIs and regularly monitor your performance against these KPIs to identify areas of improvement for further process optimisation.

Business spending management (BSM) is the key to optimizing the procurement cycle and increasing its efficiency. Streamlining procurement with BSM helps businesses control costs, gain process visibility, and make data-driven decisions.

Are you looking for a comprehensive procurement management solution that streamlines your spend management?

Partner with Moglix Business! Visit our website to learn more about our comprehensive procurement management solutions.

Every historical geo-political event has directly or indirectly disrupted supply chain management. If we try to list all the effects in one go, imagine a supply chain company struggling across all its sectors, such as operations, e-procurement, and workforce management.

Events like the COVID-19 outbreak, conflicts in Ukraine and the Middle East, and growing global tensions—have pushed the supply chain sector to adapt quickly. Businesses need to be more adaptable and to plan carefully for the future.

Here are the noteworthy upcoming trends and technologies in Supply Chain Management for companies.

Blockchain in Supply Chain Management

Blockchain technology marks a transformative era in supply chain management. It is poised to reach a market value of $1477.8 million by 2028, with a CAGR of 34.5%.

Key benefits include:

• Enhanced traceability for compliance.
• Real-time data sharing.
• Smart contracts for automation.
• Improved SMEs’ financing.
• Strengthened defences against counterfeits.
• Sustainable, ethical sourcing.

Utilizing Supply Chain Management Software

In 2024, Supply Chain Management (SCM) software trends can be utilized in:

• Reshaping e-procurement through bulk buying efficiencies.
• Enhancing transportation management through freight route optimization and payment handling.
• Refining demand planning to align inventory managementwith future needs.
• Central to strategic planning, analytics, and logistics management.

Implementation of Artificial Intelligence

IBM found that 88% of the best companies believe AI is crucial for their industry. AI helps manage data smoothly and automates tasks, making it easier for companies to make good decisions and work efficiently. Companies like Unilever and Siemens swiftly find alternative suppliers and analyze data from finances to sustainability scores through AI.

Moreover, Koch Industries optimizes procurement with AI, enhancing efficiency. Maersk and Walmart automate negotiations using AI to improve supplier management.

Also Read: How Procurement Digitization Enhances Strategic Decision-Making

Enabling Circular Economy Principles

A Gartner survey conducted in mid-2022, with 258 respondents, highlighted a strong belief among supply chain leaders in the profit-boosting potential of circular economy principles.

Notably, these principles, which focus on resource reuse, sustained material quality, and non-harmful disposal, have been applied to 16% of product portfolios on average for three years.

Benefits of economic principles:

• Reduces environmental impact.
• Streamlines supply chains.
• Provides deeper customer insights.
• Challenges include technology application, stakeholder collaboration, and performance measurement.

The Way Ahead

Supply management companies face numerous bottlenecks, necessitating expert solutions for current and future challenges. A prime example is Moglix’s achievement in consolidating 98% of vendors for a dominant adhesive manufacturer in India, which operates 70 plants and holds a 70% market share.

This initiative effectively tackled issues like inconsistent Incoterms, extensive purchase orders, low delivery visibility, and a dispersed supplier base, significantly boosting the efficiency of the company’s packaging operations.

Proactive consultation is essential as supply chain management deals with interruptions from geopolitical events and quick changes in technology. Seeking strategic advice on supply chain management from seasoned professionals to overcome obstacles and take advantage of new technologies like blockchain and AI should guarantee flexibility and future readiness.

For small companies, procurement and purchasing are often denoted as the same process and used interchangeably. However, large companies have separate procurement and purchasing functions when acquiring goods and services. Although they might appear the same, there is a world of difference between procurement and purchasing. Let’s understand the key difference between the two terms and realise their potential to impact an organisation’s bottom line.

What Does Procurement Mean?

Procurement is an end-to-end process of acquiring goods, services, or works from a supplier, manufacturer, or third party; all activities before purchasing fall under procurement. This includes everything from sourcing to payment, including making data-driven market analysis to make smart purchases at a reasonable price.

For instance, if your construction project requires some new materials, procurement involves:

• Identifying the specific quantities and qualities
• Researching different suppliers to find the best ones
• Negotiating contracts with chosen suppliers
• Formalizing purchase orders to each supplier
• Receiving and inspecting materials as per the required standards

Also Read: Redefining Procurement: Everything you need to know in 3 steps

What is Purchasing?

If you see buying vs procurement processes in a large company, you will know purchasing is a part of the procurement process. It involves buying goods or services as per the pre-decided procurement strategy. The typical ensures the day-to-day operations of a business run smoothly.

Here is the breakdown of key activities involved in the purchasing process:

• Issuing purchase orders to selected suppliers
• Tracking and expediting outstanding orders from suppliers
• Receiving products and services
• Verifying the quality of delivered items
• Processing payment to the supplier post verifying invoices against received items
• Updating inventory levels with arrived stocks

What are the Similarities Between Purchasing and Procurement?

While procurement and purchasing refer to two distinct roles, they do share some similarities.

• Both contribute to acquiring goods and services
• Both involve finding reliable vendors and building strong relationships with them
• Both require smooth financial management, whether it’s about issuing purchase orders or invoices for payment to suppliers.
• Both focus on strategic sourcing and negotiations for long-term cost benefits

That said, both processes work toward the same goal: ensuring the company gets supplies or services at the best possible value.

Now, let’s understand some fundamental buying vs procurement differences on the basis of certain common metrics.

Purchasing Vs Procurement: Key Differences

Procurement involves a lot of decision-making, including purchasing as a part of its procedure. Purchasing is a subset of the procurement procedure. It is transactional and short-term. The process majorly deals with purchasing and receiving goods or services on the basis of a pre-defined procurement strategy. On the other hand, procurement deals with the entire process of acquisition, starting from identifying the need to build a good supplier relationship for long-term benefits. Procurement takes into account the big picture. The strategy focuses on building good supplier relationships the benefit of which will positively impact a company’s bottom line for months or even years.

For instance, if you’re running a bakery, procurement involves:

• Identify raw material needs based on sales and holidays
• Researching different flour mills by comparing price, quality, and reliability
• Engaging multiple suppliers and maintaining a healthy relationship to avoid disruptions like harvest failures
• Negotiating contracts with chosen suppliers to secure long-term deals at a good price
• Keep backup suppliers in hand to handle emergencies

On the other hand, the purchasing activities will include:

• Issuing purchase orders to specific suppliers as per the procurement strategy for the exact amount of flour needed for the next week’s production
• Tracking orders and ensuring the deliveries arrive on time as per the purchase order
• Matching deliveries against purchase orders and processing invoices for payment

Let’s summarize the difference between procurement and purchasing side by side for better understanding.

Importance of E-procurement

Traditional procurement procedures involve making a lot of decisions based on data on past purchases, supplier performance, and market trends. There are a number of stakeholders involved in different departments. Each department and its processes demand meticulous documentation. Moreover, the entire procurement cycle can last for months or even can go on repeating year after year.

At times, it becomes challenging to manage and streamline every bid, invoice, and purchase in a smooth manner. This is where e-procurement comes in as an ideal solution. By using e-procurement solutions, businesses can add more efficiency to both procurement and purchasing procedures.

Moglix leveraged robust e-procurement solutions for one of the leading international vaccine makers of India to streamline its fragmented supplier base and volatile monthly inventory spend to enable 16 plants for JIT delivery of MRO goods.

Recommended reading: How e-procurement is helping businesses outshine traditional ERPs

Prospective Insights

Procurement and purchasing are interconnected processes. The latter is a subset of the former, and their systematic management sets the base for a reliable supply chain network. As procurement is a continuous process, even a few small human errors in analysis or predictions can significantly impact purchasing power in the long run. In this regard, beyond the purchasing vs. procurement debate, opting for an ideal e-procurement solution can help businesses gain a competitive edge with ease.

Looking to manage your procurement and purchases with ease? Leverage Moglix Procurement Solutions today!

OSHA reports that while 12%–14% of occupational injuries resulting in total disability are brought on by workers not wearing the proper PPE, the correct use of PPE can prevent 37.6% of occupational injuries and diseases. PPE use, for all its importance, can occasionally cause discomfort because of problems with movement, visibility, breathability, or sweating—all of which require careful thought to guarantee compliance and efficacy.

With an emphasis on those used in industrial environments, this blog seeks to define what safety tools and equipment actually are. Safety tools and equipment are a wide category of equipment made to shield you from different risks. Among these are, but are not restricted to, gloves, eye protection, helmets, highly visible clothing, and respiratory protection. Every item is designed to reduce particular hazards connected to working conditions, so guaranteeing your health and safety in a variety of settings.

Industrial safety equipment refers to the specific instruments and equipment used in production and manufacturing settings to control risks and avoid accidents. This group includes, beyond personal equipment, fire extinguishers, safety signs, emergency stop buttons, and spill or hazardous material containment systems.

You will have a better idea of the top safety equipment that every industrial workplace should have and how to outfit your settings to improve safety and meet legal requirements. This information encourages not only a safer workplace but also a safety-first culture in all sectors.

Hard Hats

Safety officers frequently prioritize hard hats as a critical personal protective equipment (PPE) item in industrial environments. The reason for this prioritization is the critical function that hard hats fulfill in safeguarding employees’ heads against potential harm caused by electrical shocks or falling objects. The diverse range of hazards present in such settings renders hard hats an essential instrument of protection due to their comprehensive nature.

Safety officers highly recommend Hard hats due to their substantial capacity to mitigate the likelihood of severe injuries in hazardous environments, including construction sites, areas where workers may encounter falling debris, and vicinity to overhead hazards such as exposed shelves or energized conductors. Specialized designs, such as hard hats with light attachments for miners, reflective stripes for night work, face shields for welders, and earmuff attachments for hearing protection, are available to meet the specific requirements of various work environments. Every individual feature has been meticulously crafted to tackle specific safety concerns, thereby guaranteeing comprehensive protection for the wearer.

Adherence to the ANSI Z89.1 standard is an absolute requirement for hard hats. It ensures the presence of a resilient suspension system capable of effectively dampening and dissipating impacts while preserving a secure distance between the head and the hat shell.

Types

• Type 1 helmets: Top impact protection.
• Type 2 helmets: Top and side impact protection.

Classes of Hard Hats

• Class E: Non-conductive, protects against high-voltage shocks up to 20,000 volts.
• Class G: General use, limited voltage protection up to 2,200 volts.
• Class C: Offers comfort and impact protection but no electrical resistance.

Maintain hard hats by cleaning them with hot water and detergent, and regularly check for damage. Adjust the straps for a secure fit and add liners or sweatbands for comfort.

Also Read: Things to Consider While Choosing Safety Helmets

First Aid Kit

Around half of the employees have admitted that their companies did not provide them with a first aid kit. For this reason, the first aid kit is frequently praised as the best option among industrial safety equipment. This preference mostly results from compliance, according to ANSI/ISEA Z308.1-2021 standards.

A first aid kit usually includes bandages, gauze pads, and resuscitation supplies. These supplies are essential for meeting urgent medical needs during work-related accidents or unexpected illnesses.

A first aid kit also shows that you are prepared and follow the law. The uniform components of this kit show a dedication to following safety procedures and the health and safety of employees.

Fire Extinguishers

Fire extinguishers are essential industrial safety equipment for early fire suppression. They enable employees to extinguish fires before they grow larger and more dangerous. Fire extinguishers are readily available in factories. It reduces the risks of injury (major burns), fatality, and property destruction.

Furthermore, they assist in ensuring compliance with workplace safety regulations. There are different types of fires. Each needs a different kind of extinguisher. OSHA and NFPA say:

• Class A: For wood, paper, and cloth fires.
• Class B: For liquids and gases that can burn.
• Class C: For electrical fires.
• Class D: For metals that can catch fire.
• Class K: For fires from cooking oils and fats.

If a workplace doesn’t follow these rules, it can be fined—and the fines can be very high. It can also face criminal charges.

Safety officers prioritize emergency preparedness, recognizing extinguishers’ pivotal role in risk management. Advancements in fire protection equipment, addressing risks like lithium-ion battery fires, demand vigilance in compliance. Updated guidelines ensure optimal fire safety coverage in small premises, emphasizing spatial considerations and risk profiles. Safety officers, informed by evolving regulations, play a crucial role in protecting lives and property from the persistent threat of fire.

Safety Signage

Industrial safety signs communicate vital information to prevent injuries and manage risks. These signs usually display maintenance, operating, and safety instructions. They may include detailed instructions for shutting down equipment, basic operating procedures, or chemical exposure warnings. These signs are often required to protect workers and help companies avoid liability.

Industrial safety signs help prevent injuries and comply with safety regulations. Emergency signs guide people to exits and locate emergency equipment.

Danger, warning, and caution signs indicate different levels of industrial safety hazards. Other types include biological hazards, notices, and general safety signs. Luminescent materials can improve sign visibility.

Regulations from OSHA, ANSI, and military standards dictate the specifics of safety signage, including colour codes, symbols, and placement. Compliance with these standards ensures that signs are effective and protective.

Given the critical role that industrial safety signs and equipment play in maintaining safety and compliance in the workplace, it is advisable for companies to continuously evaluate and update their safety protocols. Learning from OSHA’s insights on the significant reduction in occupational injuries through proper use of Personal Protective Equipment (PPE), industries should focus on not only providing the necessary equipment but also ensuring it is comfortable and practical for continuous use.

For industries looking to enhance their safety measures, consulting with experts such as those at Moglix can be a strategic move. Moglix, with its expertise in industrial products, can offer guidance on the latest safety tools and equipment that meet current regulations and standards. By collaborating with safety experts, companies can ensure they select the most effective equipment and signage, tailored to their specific operational needs.