Procurement Glossary
Order triggering
Order triggering in a nutshell:
Order triggering is the systematic process of initiating a procurement request based on defined requirements parameters such as minimum stock levels or planning data. It enables Procurement to plan materials efficiently and supply internal requisitioners on time while optimizing warehousing.
Example: In a production company, an order for raw materials is automatically triggered as soon as the stock level falls below 500 units, with the system suggesting an order quantity of 2,000 units and taking into account a delivery time of 14 days.
Everything buyers need to know about order fulfillment
Everything buyers need to know about order fulfillment
Order initiation is at the heart of an efficient procurement process and plays a key role in determining costs, delivery times and security of supply within the company. This structured overview shows you the most important methods and tools for optimal order triggering in Procurement and helps you to optimize your procurement processes.
Order triggering - An introduction
Order initiation is a fundamental process in a company's operational purchasing management and materials management. It marks the starting point of the actual procurement process and is crucial for ensuring the supply of materials and optimizing stock levels. Efficient order triggering is based on various factors such as requirements determination, inventory management and defined procurement strategies. This guide explains the most important aspects of order triggering, its various methods and the relevant influencing factors for successful implementation in the company.
What is the order trigger?
Order initiation is a central process in Procurementin which an order is officially transmitted to a supplier. It takes place after the internal determination of requirements and approval and forms the basis for the delivery of goods or services. All relevant information such as quantities, prices, delivery dates and conditions are determined and communicated in a binding manner when the order is triggered.
Core elements of order triggering
Significance for Procurement
Order initiation is crucial for a smooth procurement process. It ensures that the required materials or services are provided on time and at the best conditions. An efficient order initiation process minimizes errors, avoids delays and helps to reduce costs. It also enables better planning and control of stock levels and a stronger negotiating position with suppliers.
Order initiation: from manual ordering to electronic procurement
Building on the fundamental importance of order initiation as a binding starting point for deliveries, the practical approach has changed considerably in recent years. While manual processes have traditionally dominated, the need for efficiency and error reduction is leading to a shift towards digital solutions. The transformation from paper-based orders to automated electronic systems is essential for companies to remain competitive and optimize procurement processes.
Old: Manual order triggering
Traditional approach:In the traditional purchase order process, purchase orders are created manually and sent to suppliers. Purchasing staff use paper forms or simple Excel spreadsheets to document purchase requisitions. These are sent to the supplier by fax, e-mail or even post. This approach is characterized by a high level of manual effort, media disruptions and an increased susceptibility to errors due to manual data entry. Challenges such as a lack of transparency regarding the order status, longer processing times and higher process costs are typical limitations of this method.
New: Electronic Procurement
Electronic procurement:The modern approach to order initiation relies on electronic procurement systems that automate and digitize the process. Through the use of e-procurement platforms and the integration of EDI (Electronic Data Interchange), orders are generated directly from the ERP system and transmitted electronically to the supplier. Innovative features include automatic approval workflows, real-time tracking of orders and improved data quality by eliminating manual input. Practical benefits include a reduction in procurement costs of up to 30%, faster throughput times and greater transparency in the procurement process.
Practical example: Introduction of e-Procurement at Müller AG
Müller AG was faced with the challenge of modernizing its procurement processes. By implementing an e-procurement system, orders could be triggered automatically and sent directly to the systems of the supplier management systems. Within six months, this led to a 50% reduction in processing time per order. Process costs fell by 25% and the error rate for orders was virtually eliminated. In addition, delivery reliability improved by 20%, which had a positive impact on production processes and customer satisfaction.
Conclusion on order triggering
Order initiation is a fundamental process in modern Procurement that is constantly being optimized through digital transformation and automation. Success is based on the precise coordination between demand determination, system integration and supplier management. While current challenges such as inventory optimization and technical standardization remain, new technologies such as AI and blockchain offer promising solutions for the future. Strategic further development of order fulfillment is essential for companies in order to secure competitive advantages and exploit efficiency potential.
