E-Procurement

ACCA P3考試： E-Procurement

E-procurement, sometimes also known as supplier exchange, is the B2B or B2C purchase and sale of supplies and services through the Internet as well as other information and networking systems (e.g. EDI and ERP).

E-procurement sites allow qualified and registered users to look for buyers or sellers of goods and services. Depending on the approach, buyers or sellers may specify costs or invite bids.

Transactions can be initiated and completed. Ongoing purchases may qualify customers for volume discounts or special offers.

E-procurement software may make it possible to automate some buying and selling.

1. Advantages

Advantages surround the well-known purchasing mix:

Right time;

Right quantity;

Right quality;

Right price; and

Right vendor.

E-procurement has the advantage of:

Taking supply chain management to the next level, providing real-time information to the vendor as to the status of a customer’s needs.

Increased compliance with strategic procurement contracts.

Efficient search of products and alternative choices.

Control over requisition approval.

Shorter order and delivery time.

Monitoring of the suppliers and their product portfolio.

Lowered cost of supplier participation.

Rapid return on investment.

2. Risks

A major disadvantage could be that the vendor has the power to take advantage of the customer by knowing more about the customer than in a normal supply chain management structure.

Some EDI users have experienced mistakes.

Some companies have been disappointed by e-procurement software applications that do not meet their needs. Suppliers often cannot support e-transactions and cannot generate or maintain control over unauthorised purchases.

Data security and the question: Who has access to a company’s data?

Supply chain problems as e-sourcing speeds up the sourcing process.

3. Main Types of E-Procurement

Web-based ERP: Creating and approving purchasing requisitions, placing purchase orders and receiving goods and services by using a software system based on Internet technology.

E-MRO (Maintenance, Repair and Operating): The same as Web-based ERP except that the goods and services ordered are non-product related MRO supplies.

E-sourcing: Identifying new suppliers for a specific category of purchasing requirements using Internet technology.

E-tendering: Sending requests for information and prices to suppliers and receiving the responses of suppliers using Internet technology.

E-reverse auctioning: Using Internet technology to buy goods and services from a number of known or unknown suppliers.

E-informing: Gathering and distributing purchasing information both from and to internal and external parties using Internet technology.