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Organizations that integrate their purchasing and logistics functions deliver better business results, according to a new study from the Global Supply Chain Institute at the University of Tennessee, Knoxville.

No surprise then that companies who want to achive this goal are uniquely suited to a single integrated ERP software system that easily allows cross function communications.

From the small business with 3 employees that has the same purchasing and sales agents. To the multimillion dollar one with a team of 10 purchasing agents and 50+ sales people
the study proves that communications and a single view are paramount in making your operations work effectively.
But the study, involving more than 180 supply chain professionals, also shows that many firms fail to capitalize on this opportunity and have supply chains where purchasing and logistics operate in "silos" with little cohesion.
According to the study, metrics that are specific to each function and are used to measure (and reward) performance drive decisions. These are often geared toward short-term financial gain.
The report, "Bending the Chain: The Surprising Challenge of Integrating Purchasing and Logistics," was sponsored by IBM and is the second in the "Game-Changing Trends in Supply Chain" series from UT's supply chain faculty.
"When the purchasing and logistics functions are merged together, companies may realize increased levels of functional and financial performance such as greater efficiency, reduced complexity and lower operating expenses, cost of goods sold and inventory," said Mike Ray, vice president, business integration and transformation, IBM Integrated Supply Chain. 
In a key part of the study, respondents (most of whom were purchasing and logistics professionals) acknowledged pitfalls resulting from their lack of collaboration, ranking performances below expectations in areas that required the two groups working together.
The study also highlights the best practices of supply chain leaders who have successfully integrated their purchasing and logistics groups:
  • Fully integrate all of the functions in the supply chain organization and use common metrics throughout
  • Create a purchasing and logistics network that uses a decision framework where the overall good of the firm is paramount.
  • Utilize effective information systems and work processes that provide multifunctional supply chain teams the proper tools and information to foster superior business results

It's clear that using a single system provides more they just a small advantage to your business. 

Is your business ready to grow? Let the MDS-Nx System be the platform for your success. 

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