How NetSuite Procurement Supports Multi-Subsidiary and Global Purchasing

As an organization grows across regions and countries, it becomes more difficult to manage the company's procurement process. Establishing management for multiple companies requires more than simply purchasing items. Every purchase made by these companies needs to follow the proper processes established by the organization to keep costs under control, manage vendors around the globe, and ensure compliance to all applicable policies without affecting operational effectiveness. The use of NetSuite Procurement provides organizations with a distinct advantage in this regard. 
 

NetSuite has been purpose-built for today's modern enterprises to help organizations achieve a unified approach to their purchasing processes while still allowing for flexibility in local operations. NetSuite delivers a real-time view of all purchasing transactions, providing the organization with the ability to have complete visibility and control over all overall spending and vendor relationships within each subsidiary. 

The Growing Challenge of Global Purchasing 

As global corporations attempt to standardize their purchasing processes while continuing to accommodate regional needs, they are continuously faced with the challenge of developing processes that meet both these demands.  
 

Although many companies have developed disparate purchasing systems, this has led to inconsistent procurement policies and limited visibility of total spend across subsidiary locations, as well as duplicate suppliers within their systems. This increased inefficiency in the purchasing process creates greater risk and ultimately results in decreased purchasing efficiencies. 
 

NetSuite ERP offers a unique integrated cloud solution that integrates purchasing, finance, and operations teams in a way that provides real-time accessibility to all data from a single database. This integration of all departments into the same system creates a single source of truth regarding all purchasing activity across multiple subsidiaries. 

Centralized Procurement Across Subsidiaries 
 

Centralizing the purchasing activities of multiple entities is critical to managing and ensuring proper purchasing practices by controlling the corporate-level procurement process while allowing subsidiaries to operate within set guidelines. 
 

Through the NetSuite Procurement Module, procurement teams configure the approval workflow, establish spending levels, and set purchasing rules, which will be the same for all subsidiaries. Once configured, all subsidiary-level purchase requests go through these system-defined workflows to get to the corporate-approved purchasing level.  
 

In doing so, this will significantly reduce the probability that unauthorized purchases can occur, as well as ensure compliance with all corporate-approved purchasing standards.  
 

NetSuite by Oracle emphasizes the need for organizations to maximize their purchasing power. Leadership has complete transparency into the purchase of goods or services from vendors in each region and can use this information to negotiate terms with vendors and optimize the overall cost of purchasing worldwide. 

Efficient Purchasing Management with Automation 
 

The efficiency of a company's purchasing department requires a structured process (in this case, the structure is to automate the process). With the ability to manage the entire procure-to-pay process using NetSuite Purchasing Management, the time required to procure can be reduced significantly by eliminating as many manual steps as possible. 
 

As part of the overall process, employee users generate purchase requisitions that are automatically routed through an approved chain of commands, depending upon departmental and regional structures and/or the monetary amount being requested.  
 

After the approval has been completed, the software automatically produces the corresponding purchase order with the highest degree of accuracy possible. Through automation, the purchasing department cycle times are accelerated, and the administrative time associated with procurement is reduced. 
 

Automation of the purchasing process increases compliance and enables the organization to keep the procurement process efficient and scalable. 

Unified Vendor Management for Global Consistency 
 

When a company manages suppliers through several subsidiaries, the information being used in each subsidiary is often fragmented, and there are differences in how a company manages its suppliers within the organization. NetSuite Vendor Management is a tool that assists in supporting a central repository of supplier information that can be accessed by users from multiple subsidiaries, and that ensures there is consistency within the organization with suppliers. 
 

The procurement teams can utilize one vendor record to manage the suppliers of multiple subsidiaries. This allows for standardized pricing and payment term as well as contracts that track the performance of the vendor. 
 

Centralizing supplier information improves communication, provides better management of risk, and improves the ability to maintain long-term relationships with vendors worldwide. 

Supporting Global Operations with Multi-Currency Capabilities 
 

With a company operating on a global scale, it is important to have the ability to properly handle multiple currencies and understand the differences between the financial regulations in each country. As NetSuite support, each subsidiary of a company can operate in its own currency and provide a consolidated view of all financial data to corporate headquarters. 
 

Procurement teams can view current exchange rates and assess the impact of the purchase on the organization without having to calculate anything manually. Having the ability to align the procurement process with the global financial processes of an organization, error reduction, and an increase in reporting confidence are attained. 

Modern Indirect Procurement Experience 
 

While looking at the whole company, you will see that when you have a decentralized structure, it can be hard to find the indirect purchase activity. Today, NetSuite has many enhancements to the Procurement Solution to help you create a more modern and guided buying experience for your indirect purchases. 
 

With the NetSuite Procurement Solution, employees can purchase from approved catalogs and, at the same time, remain within their defined policies. In addition, purchases are pre-approved through automated workflows, maintaining governance without slowing down day-to-day operations. 
 

By utilizing this process for indirect purchasing, companies can manage their indirect purchases while providing a better experience for their employees in their different subsidiaries. 

Real-Time Insights and Spend Visibility 

Today, procurement leaders need instant access to insights so they can make informed purchasing decisions. NetSuite provides procurement leaders with dashboards and reports that reflect a consolidated view of purchasing activity. 
 

All Procurement Teams can see their Open Purchase Orders, Suppliers' Commitments, and Purchase Trends in real time within NetSuite. These insights enable Procurement Teams to make proactive decisions, locate cost savings, and monitor supplier performance. 
 

Procurement Teams have real-time access to accurate data, which allows them to remain agile and respond to ever-changing business requirements. 

Empowering Global Procurement with NetSuite 

As businesses grow and have multiple subsidiaries, they must manage procurement effectively across all subsidiaries. In order to manage global procurement effectively, organizations need a single system that provides visibility and control for this vast key area of their procurement process. NetSuite provides such a system by using a unified approach to offer global purchasing capabilities, while still offering localized operation flexibility. 
 

By centralizing its procurement process with NetSuite, companies gain a stronger level of access to their suppliers through improved Supplier Oversight; the ability to respond quickly based on data-driven decisions, the ability to manage their suppliers' commitment to quality always, and the ability to analyze data regarding suppliers in the future.  
 

Through these processes, organizations create their procurement function as a strategic resource. As organizations grow, NetSuite provides organizations with the foundation to manage all aspects of their global procurement transactions confidently and transparently.