Watch the video on automated purchasing systems.
Homebuilding is a collaborative process between multiple parties, such as the homebuilder, trade contractors, material suppliers, manufacturers, designers, and architects. With so many different entities with their own workflow processes involved, the builder's business operations get very complex. To manage this complexity, many builders use a computer-based system to monitor and maintain control of workflow processes. The purchasing application of such a system is one of the most vital because it affects budgets and schedules. Unfortunately, it's also one of the most error-prone.
Many builders have separate software applications for various functions, including accounting software, estimating software, project management software, and a purchase order system. If these systems aren't integrated, someone will need to enter information from one system into all the others. No one's perfect, and the process of manually entering data is susceptible to errors in data entry. Errors in the purchasing process can lead to a delay in getting materials delivered to the jobsite, which can set schedules back and add costs to the process—not to mention sacrificing the satisfaction of your customers, who may have their hearts set on being in their new home by a certain date.
The best practice for maintaining control over the ordering process is to establish a software-based system with an automated purchasing system. This system consolidates all the different functions involved, ensuring timely and accurate orders.
An automated purchasing system will perform the following beneficial tasks:
- Apply pre-loaded specifications and materials lists to the system to start. This will establish a foundation to ensure proper checks and balances.
- Automatically flag invoices that don't reconcile with purchase or work orders.
- Create change orders and variance purchase orders with specific reasons for the variances for the builder's review.
Quality matters throughout the homebuilding process—not just in the construction process but also in the business operations. To maintain control and operate efficiently, builders should have an automatic purchasing system that eliminates the chance of errors that could lead to problems with budget and schedules. Make sure to test your new system before implementing it, though, to be sure you and your employees are comfortable with it. There's a learning curve with all new systems and procedures; few of us get it right the first time.
To learn more about technologies for builders, read an in-depth series from the National Association of Home Builders' (NAHB) Nation's Building News.
The NAHB also offers resources on business management tools.
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