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Procurement in hardware development is often messy, manual, and maddening. You might not have a dedicated buyer, so your engineers are stuck tracking down parts. Orders get buried in email threads. Inventory is managed with a whiteboard, a spreadsheet, or a half-remembered pile in a closet. At first, it feels manageable. But over time, frustration builds.
That frustration turns into expense. Engineers are too busy sourcing components to build your product. Buyers are overwhelmed and stretched thin. Errors lead to rework, overnight shipping, or even production delays. Meanwhile, purchasing decisions are made in isolation, so you miss out on discounts and efficiencies.
And all of this adds up to waste. Wasted time. Wasted talent. Wasted parts. Wasted money.
If this sounds familiar, you're not alone, and you're not stuck. Procurement automation offers a better way. It reduces friction, lowers costs, and helps your team focus on building. But how do you know when you're ready to make the switch?
Here are three clear signals that your current approach to purchasing isn’t sustainable.
1. Your Engineers Are Doing the Buying
If engineers are placing orders, chasing suppliers, or updating spreadsheets, your team has a problem. You’re using high-cost talent for things they don’t like and aren’t good at.
Ask yourself:
- Are engineers handling purchasing tasks that someone else could be managing?
- Are they spending more time sourcing parts than developing products?
- Are they juggling procurement at night because they have no better option?
At many hardware startups, engineers spend up to 25% of their time on procurement. That’s time not spent designing, testing, or building. It's also a misuse of your most expensive labor. The average procurement specialist costs $105,000 per year fully loaded, or about $8,750/month. If your engineers are more expensive than that (and they probably are) you’re paying more to get worse results.
Worse, you risk burnout. Engineers who joined your team to build innovative products don’t want to spend their time sending emails to distributors or reconciling invoices. Every hour they spend on procurement is a lost opportunity for innovation, experimentation, or problem-solving. Over time, this kind of role drift wears people down. They joined to design, not to babysit BOMs.
Procurement automation returns that time to your team by taking repetitive, non-engineering tasks off their plate. Quoting, RFQs, order tracking, and supplier communication can be automated or streamlined so your engineers stay focused where they’re most effective.
Automation also creates consistency. When every engineer is handling procurement differently, it becomes difficult to enforce standards, track spend, or manage inventory. One engineer uses a Google Sheet, another copies from an old BOM, and a third keeps everything in email. It only takes one mismatch or outdated part number to delay your next build.
With automation, purchasing flows through a central system. You gain traceability, standardized workflows, and the ability to scale without losing control.
2. You’re Thinking About Hiring Another Buyer
Hiring more staff because your business is growing? Great. That usually means things are working. But if you need to hire because your team can't keep up due to inefficient tools or processes, that's a red flag.
Ask yourself:
- Are you adding buyers to scale a healthy operation or to patch a broken one?
- Is each buyer managing fewer than 3,000 part numbers?
- Do you need multiple hires just to cover different component categories?
In an efficient system, a single buyer can commonly handle 3,000 to 4,000 SKUs. If your team is struggling to keep up with fewer, your processes aren’t scaling with your business.
Manual procurement systems limit throughput. Spreadsheets get messy. Email chains break. And when one person leaves, their process leaves with them. That’s not a foundation you can build on. With automation, procurement tasks are tracked, repeatable, and accessible to anyone on the team.
There’s also the issue of commodity expertise. One buyer may know passives well but not connectors or RF. Hiring specialists for each category is expensive. Automated tools can help bridge those gaps, offering structured data and vetted alternatives that broaden what your team can handle without adding headcount.
Automated platforms can also handle the low-hanging fruit: reordering frequently used parts, issuing blanket POs, managing vendor relationships, and flagging supply disruptions. That frees your human team to focus on complex purchasing strategy, cost optimization, and supplier negotiations.
So yes, hire if you’re growing. But if you’re hiring just to push paper, it’s worth asking if a platform can do the work cheaper. The answer is probably much cheaper.
3. Errors and Missed Opportunities Are Piling Up
Manual processes are error-prone. Every typo, misclick, or oversight becomes more expensive as your volume grows.
Ask yourself:
- Are you seeing wrong quantities, mismatched invoices, or missed part numbers?
- Are parts getting lost, damaged, or delayed in your warehouse?
- Are you missing out on bulk discounts or better pricing?
- Are obsolete parts or supply shortages catching you off guard?
- Are you risking production line shutdowns due to preventable part shortages?
These problems all stem from the same source: bad processes. Manual data entry creates room for mistakes. Poor inventory tracking leads to scrap and delay. And disjointed purchasing makes it hard to consolidate orders or plan ahead.
Inventory losses are a hidden cost. For example, if you’re not managing moisture-sensitive components (MSL 3+) properly, you’re exposing them to damage that could force you to scrap entire reels.
Worse yet, a missing or mishandled part can shut down an entire production line. When that happens, the cost isn't just an annoying delay — it's a revenue hit. Industry estimates put the average cost of a line shutdown at $46,000 per day. One lost day will probably cost you more than a whole year's worth of procurement automation.
And those errors compound. When a bad PO leads to the wrong part, which delays a build, which causes your team to overnight a replacement, which introduces a mismatch, and so on. You get into a cycle of patchwork fixes, each more expensive than the last. Automation breaks that cycle by creating a consistent, validated flow from BOM to order to delivery.
Automation can solve these issues:
- It verifies part numbers and pricing in real time
- Tracks inventory with barcode or location-based systems
- Flags cost savings and volume purchase opportunities
- Surfaces alternates when a part becomes obsolete or hard to source
- Helps prevent production line stoppages by maintaining inventory visibility and procurement continuity
The longer you wait, the more likely it is that these problems will snowball. They often don’t show up until you’re in the middle of a critical build or a high-stakes shipment. By then, it’s too late to avoid the cost, you can only contain it.
The Cost-Benefit Equation
Yes, procurement automation has a cost. There’s onboarding, setup, and a recurring subscription. But weigh that against:
- Engineer time spent on procurement
- Errors and rework
- Missed pricing opportunities
- Avoidable headcount additions
- Delayed shipments or builds
- Full production line shutdowns costing tens of thousands per day
The ROI becomes clear when you realize automation doesn’t just reduce costs, it unlocks capacity. Your team gets more done with fewer errors, and your buyers can manage more work with less stress. You create a more resilient operation that scales cleanly.
Procurement automation can start small, too. You don’t need to rip out everything and start over. Many tools integrate with your existing spreadsheets, ERPs, or inventory systems. You can build incrementally, automating what matters most, then expanding from there.
Final Thoughts
Manual procurement works until it doesn’t. Delays, sourcing errors, and frustrated engineers are signals. If you’re seeing those, you’re already paying the cost of inaction.
You don’t need an ERP overhaul. You need procurement automation that matches your scale and your needs. Let software do the repetitive work so your team can get back to building the future.
Ready to let Cofactr handle sourcing, negotiations, storage, kitting, and delivery while your team focuses on building products? It’s free to get started with Cofactr today.
Frequently Asked Questions
What is procurement automation?
Procurement automation uses software to streamline sourcing, purchasing, inventory tracking, and supplier communication, reducing manual work, errors, and costs while improving visibility and scalability.
How does procurement automation help engineers?
It removes non-engineering tasks like sourcing parts, tracking orders, and managing spreadsheets, allowing engineers to focus on design, testing, and building products instead of administrative work.
Why does manual procurement create frustration and waste?
Manual processes rely on emails and spreadsheets, leading to errors, lost parts, missed discounts, and wasted time, which compounds costs and slows development as volume increases.
Can I use procurement automation without a full ERP overhaul?
Yes, many procurement automation tools integrate with existing spreadsheets, ERPs, or inventory systems, allowing you to start small and expand gradually without disrupting operations.
When does it make sense to consider procurement automation?
It’s time when engineers are doing the buying, hiring more buyers feels necessary to keep up, or errors, delays, and missed savings are becoming frequent.
Who benefits most from procurement automation?
Hardware startups and growing teams benefit most, especially when engineers or overstretched buyers are handling procurement tasks that distract from higher-value engineering and strategic work.
Is it normal for engineers to handle procurement tasks?
It’s common early on, but unsustainable over time, as engineers can spend up to 25% of their time on purchasing instead of product development.
How to know if I need to hire another buyer or automate instead?
If buyers manage far fewer than 3,000 SKUs or new hires only patch inefficient processes, automation is likely a cheaper and more scalable solution.
Best way to reduce procurement errors and delays?
Automation verifies part numbers, tracks inventory accurately, flags shortages, and standardizes workflows, preventing costly mistakes, rework, and production line shutdowns.
Where do procurement errors usually come from?
They typically stem from manual data entry, disconnected tools, poor inventory tracking, and inconsistent processes that increase the risk of wrong parts, quantities, or delays.
Do I really save money with procurement automation?
Yes, savings come from reduced engineer time, fewer errors, avoided emergency shipping, better pricing through consolidation, and preventing costly production line stoppages.