Average cost per PO

That's a slippery fish. Many consultants will try to tell you the cost to process a PO is $75 or $90 or $100. They use that oversimplified formula of buyer salaries divided by the number of POs processed. But this doesn't take into consideration of all the other duties a buyer has besides processing reqs into POs: processing returns, tracking down missing receipts, working with AP on invoice issues, working RNI/INR reports, helping customers with RQC, attending VAT meetings.... the list goes on. Another thing they'll try to do use that formula and tell you about all the money you'll save by using their system because it will reduce the average cost to process a PO. Which is complete BS. The only way you'll save money is if you reduce FTEs. Not that there isn't value to increasing efficiency but you're not reducing expenses. Your bottom line remains the same. What you really need to find out is what's the average time your buyers spend processing POs. Much of our PO processing is automated via PO100 so the buyers are spending most of their time working X and S req lines plus what I described above.

Agreeing with Jon. Cost per PO is whatever your corporation says it is because it's not a real number. EDI is "cheaper" because it's automated. But there's expense borne by the servers and the salary my company pays me to maintain the ED10 and ED40. And transmitting EDI doesn't take into account what the buyer did to get it to Released, Not Issued Status. To measure "workload", we monitor the following stats monthly: Req Counts by source SCM Approvals in Inbasket (both how many times a buyer approved for an absent approver and how many times a buyer was asked to review because it looked like a capital, etc) SCM Manually Created POs Req to PO Days Lines Set to EDI then Changed by Buyer PO Lines batched as unreleased (here this is the x type items and special shipping requests) PO Lines batched as paper print POA Exception Counts: Backorder, UOM/Price, Part number Invoice Cost Messages Comparing all that month to month year to year is how we justify the FTEs.

Thank you both for your comments. pg