When it comes to strategically launching a product, James Mallory has worked in the ERP, manufacturing, and supply chain software industry since 1997. He’s been responsible for Acumatica’s wholesale distribution and manufacturing product marketing for Acumatica since April 2020, recently taking on retail products. James attained the position of Principal Product Marketing Manager, Supply Chain Applications in July 2025.

Over his years of skillfully marketing Acumatica’s cloud ERP software, James has attained a wealth of supply chain knowledge and recognizes the critically important role the procurement process plays in the success of inventory-centric businesses, such as those in the distribution, retail, and manufacturing industries. Buyers, inventory planners, and manufacturing material planners are constantly seeking ways to optimize their supply chain processes, and James has the insights they’re looking for.

Here are his answers to the burning procurement questions Acumatica’s inventory-based customers are asking.

Let’s start simple: What exactly does procurement mean, and how is it different from just purchasing?

It’s interesting. Different industries use different terms, so you’ll hear it called different things, such as procurement purchasing or sourcing. You’ll also find that procurement and purchasing are often used interchangeably.

If you’re looking for a formal procurement definition, Sourcing is at the vendor or supplier level, and procurement is one element of the sourcing function.

In comparison, purchasing is the literal transaction between a buyer and seller, which is less complex than the procurement process.

Can you walk us through the typical procurement process?

Of course! Keep in mind that the procurement process varies depending on the organization. For example, if you’re looking at a smaller distributor, retailer, or manufacturer, they may buy inventory as it’s needed.

So, let’s say they run out of an item on the shelf. If they haven’t done so already, they’ll need to find the best supplier, set up the relationship, and negotiate terms. From there, they’ll put in a purchase order specifying the item they want to buy from the supplier, how much they want, and the cost. Specialty items—items they don’t necessarily stock all the time—require a requisition form, which involves sending out bids to vendors and suppliers and getting the bids approved. Once approved, the item is purchased. That item or those items may continue to be stocked, or they may be one-off purchases.

Larger organizations typically avoid one-off purchase orders and instead purchase products in bulk, which is a best practice in procurement. They drive their procurement process off of a forecast, which is especially important for companies that source their products internationally, as there may be a significant lead time, such as three or six months. They can’t afford to wait until something is in stock to place an order, because they may have to wait a long time to get it.

Forecasting is based on several questions, such as “What do I plan to sell or make over the next six months?” and “What can I make with the raw materials I have on hand?” They’ll be able to easily answer these questions if they’re using an enterprise resource planning (ERP) solution, like Acumatica—which offers material requirements planning (MRP), distribution replenishment planning (DRP), native forecasting, and advanced forecasting with OEM partners NetStock and EazyStock (which, by the way, can help keep stock low without causing stockouts, lower carrying costs, and increase inventory turns).

For instance, ERP data helps drive demand planning, which is a good procurement practice. Demand planning helps businesses identify potential deficits and the timeframe (e.g., weekly, monthly, etc.). The ERP solution can also provide recommended actions, such as whether to transfer inventory between warehouses or create a manufacturing production order to produce an item (which involves creating a purchase order to buy the materials needed).

Additionally, if a company determines they want a set number of products (at a negotiated price) from a particular supplier, it can use Acumatica’s blanket purchase order feature. The blanket purchase order is already set up with the contracted terms and delivery dates, and the company only needs to issue a release from it. It’s an efficient and economical inventory safety net!

And not to get too far into the weeds, but it’s important to note that technology like Acumatica can help facilitate a smooth purchase transaction through electronic data interchange (EDI). This basically takes the purchasing data from Acumatica, prepares it in the correct digital format via a third-party provider (such as SPS Commerce, a Fulfilled by Acumatica application), and transmits it directly to the other party.

Without leaving Acumatica, you can easily and securely transmit and receive EDI documents.

It’s quite a process, which explains why it can take so long. Are there other reasons why the procurement process might be extended?

There are. One is the need to onboard new suppliers. It’s a process that requires approval from the powers that be, and that’s not always a fast situation. Fortunately, Acumatica users benefit from our built-in, configurable approval workflows that can attach to just about any process.

Transparency is another issue. If a business is running low on materials—or if they have low stock or dead stock but don’t know it because they don’t have inventory visibility—it can take time to manually check inventory. Again, Acumatica users don’t suffer from this issue because our internal and external notifications let them know when there are inventory discrepancies, and our automated supplier reports are transmitted at the right time.

Finally, many organizations, big or small, have to deal with vendor or supplier quality issues. It’s a time-consuming challenge if a business doesn’t have a way to quickly identify good or bad parts and return them to the supplier, but with eWorkplace Apps, a natively built application within the Acumatica framework, they do. It’s a quality control module that equips users to identify parts that aren’t in good order, reject them, and return them to the truck for return.

If speed is such an issue, what best procurement practices can help teams save time without cutting corners?

Businesses definitely don’t want to cut corners as they strive to move quickly through the procurement process.

One of the things I recommend is managing their vendor relationships. “Close” vendor relationships ensure vendors are willing to work with the business when they face inventory challenges (e.g., needing stock ASAP due to unexpected shortages or buying surges). To build and maintain these relationships, companies should use a customer relationship management (CRM) application, preferably one provided by their ERP solution, such as Acumatica’s CRM.

CRM software is not just for managing customers. Inventory businesses can store vendor contacts, attach supplier contracts, schedule meetings, document incidents, and more in one place, helping keep their team members and vendors on the same page.

Another thing I recommend—and this goes back to our earlier discussion on forecasting and demand planning—is having an automated system, like DRP or MRP, to manage procurement processes. This is especially important for smaller companies relying on Excel spreadsheets to source, procure, and purchase goods and services. Manual inventory management is a recipe for disaster due to the manpower requirements and user errors that can occur.

As Acumatica continues to grow as an AI-powered cloud ERP solution, it’s exciting to watch the promise of AI to create an autonomous supply chain become closer to reality. That’s something I see coming! That said, another best practice for time efficiency is to annually audit systems and processes.

For example, businesses should review the vendors in their system, paying attention to factors such as lead times. Let’s say a vendor’s lead time was running at two weeks, but they improved shipping processes, cutting lead times down to one week. This is information organizations should know so they can leverage it to serve their customers faster and more efficiently.

Finally, I recommend that businesses have back-up suppliers. If they’re sourcing overseas and something runs out, they can’t wait three or six months to fulfill customer orders. They should consider adding a domestic supplier to bridge the gap until their regular supplier can deliver their order.

What advice do you have for someone—like in a startup—building procurement capability as a team of one?

Having a small procurement team is common for startups and smaller businesses. To avoid overwhelming team members responsible for managing the complex procurement process, the business will want to invest in the right technology, such as Acumatica’s comprehensive ERP solution, that provides real-time, accurate, and complete information. This will help them operate as a team of one, or if they grow and have different buyers for different product lines or facilities, they’ll already have the tools in place to manage more people.

And speaking of more people, labor is a huge constraint for businesses right now. It’s challenging to find skilled employees, and, when they’re found, it isn’t easy to retain them. The earlier and more a business can automate, allows them to do more a smaller staff, which helps keep costs down and profits up.

Along with system automation tools, the ERP solution a business selects should also provide full-service support. For Acumatica Community members, that support can come in the form of networking with peers about how they’re solving problems in their supply chains via our online Acumatica Community forum or by attending our annual Summit. It also comes from Community members’ ability to lean on the expertise of our value added resellers (VARs), who are expert technology partners that provide the information and know-how on using Acumatica to facilitate a smooth procurement process from beginning to end.

When it comes to requests for proposals (RFPs), how can organizations evaluate suppliers in a fair and structured way?

Finding vendors—the right vendors—is another hurdle inventory-based companies must overcome. The good news is that Acumatica’s requisition management software automates the process for our users. It “

It’s a structured, easy, and fair way to evaluate suppliers.

How can procurement align with sustainability and environmental, social, and governance (ESG) goals?

That’s a good question. The fact is, if a business has a strong procurement process supported by advanced technology, it can reduce the number of shipments it needs. This leads to less fuel usage, fewer carbon emissions, less packaging, and more.

By more efficiently managing their vendors and product quality, distributors, retailers, and manufacturers will also have fewer returned orders, lower transportation costs, and a minimized environmental impact, which is also true due to placing purchase orders and going digital with EDI.

What KPIs and benchmarks really matter when measuring procurement performance?

I actually cover KPIs in an eBook I wrote about Distribution Metrics. Though it might sound like the eBook is just for distributors, retailers, and manufacturers can use the same KPIs to measure how well they’re doing when it comes to procurement performance.

Some KPI examples include:

• Vendor compliance/quality rating.
• Vendor lead times.
• Purchases in budget and time.
• Stock-out rate.
• Emergency rush order count and cost.
• Demand forecast accuracy.
• Average purchase value.
• And more.

Procurement isn’t just about saving money, so how do you build risk management, compliance, and transparency into the process?

Businesses can mitigate concerns about risk, compliance, and transparency by implementing a one-stop solution such as Acumatica.

So, what does that mean? Well, with Acumatica, users have the tools they need to automate and structure their procurement processes. This includes:

• Procure-to-pay automation via AI with machine learning.
• Complete vendor management (including setting up vendors with defaults by vendor class, importing vendor product catalogs, and setting up vendor contacts and billing details).
• Requisition automation that enables businesses to automate vendor billing, provides for digital bid collection, and allows them to convert those bids directly into vendor records and POs.

That’s just the tip of the iceberg! Acumatica’s inventory management capabilities encompass purchasing, sales, production, service, project accounting, construction, and financial applications in one place so that every part of the procurement process is transparent and streamlined—from warehouse management, replenishment, and returns, to quality management, advanced AP/PO automation, EDI, vendor relationships with CRM, and everything in between.

Additionally, the data and documentation within the system, including inventory data from barcode scanning, AI, and statistical forecasts, ensures that team members have all the data they need for planning. They’ll gain insights and transparency as well as mitigate risks with a full-featured, procurement-centered system like Acumatica.

Our Mitigate Supply Chain Disruption playbook dives deep into how to proactively manage supply chains with Acumatica for anyone interested in learning more.

How do ERP systems and automation streamline procurement?

This is another great question and an excellent follow-up to the last one! Streamlining procurement is about gaining visibility into processes and understanding supply and demand. With an ERP solution like Acumatica, businesses of all sizes can set up their procurement process so that they can automate manual tasks and see where they’re at within the process itself.

They also have the data they need to make smart business decisions. One specific example is the data they receive by connecting to their carrier systems. With this information, they can assess which carrier to use based on how long each takes to deliver products, whether they’re prone to labor strikes, or whether they have any shipping issues in general.

Thankfully, Acumatica users have superior carrier options, such as 3G Pacejet Shipping (a Descartes Systems group business). Connecting with this multi-carrier shipping software can help reduce costs, improve customer satisfaction, and enhance operational efficiency.

From complete visibility and transparency to assured shipping, businesses can enjoy a streamlined procure-to-pay process.

Why is procurement strategically crucial for business success and resilience?

I think everything we’ve discussed up to this point highlights why strategic procurement processes are so important, but, bottom line, procurement is essential to businesses that make or sell products. Products are the lifeblood of these businesses, and if they don’t do a good job of managing their supply chains and procurement (meaning, if they don’t have good procurement practices), then there are negative consequences.

One such negative consequence is that costs go up, and if costs go up, the business becomes less competitive. We’re operating in a global market right now with many companies sourcing products overseas, and we know there are low-cost providers out there. So, if businesses can’t get their costs in line, they’re going to be priced out of the market.

They don’t want that to happen, and the only way to avoid it is to implement streamlined, strategic procurement processes built on modern technologies..

To wrap up: If you had to give one piece of advice on procurement best practices, what would it be?

This one’s easy: Make procurement a priority, and that means investing in a modern business platform that consolidates supply and demand through automation, streamlining the entire procure-to-pay process.

It also means reviewing procurement strategies on a regular basis to ensure constant improvement. Once or twice a year, businesses need to ask themselves, “Is our procurement process efficient, cost-effective, and competitive, and do we understand everything we’re doing?”

If the answer is “no” to either question or both, then they need to make sure they’re taking full advantage of their technology. Acumatica can help with that.

To learn more about how Acumatica’s award-winning cloud ERP software can exponentially improve your procurement procedures, contact our experts today.