Monday 9 June 2014

Key to Success of eProcurement

Authored by  Junaid Khan

In today’s accelerating world economy, manufacturing companies are facing with the market realities of ever more demanding customers, shrinking product life cycles and steep price erosion. Companies drive to continually cut costs and focus on core competencies has driven many to outsource some or all of their production. Many eProcurement tools are there in market which bring transparency through different module in competitive bidding environment. Standard request for information (RFI) , request for quotation (RFQ), reverse and forward auctions enable buyer to save money by aggregating suppliers together in one online platform to compete for business. eProcurement always reduce written procedures offers costing options that auto generate order plans. Below are some important tips for success of eProcurement process.
  • The biggest obstacle to eProcurement is cultural change not the technical change.
  • eProcurement is ineffective without first establishing a strategic supply chain system.
  • Part number standardization / rationalization is required to realize the full effect of strategic sourcing and eProcurement.
  • Procurement and contracting fundamentals must be addressed with preferred suppliers before attempting to facilitate the transaction with electronic tools.
  • Purchasing skill-set are considerably different in the eProcurement environment and requires proper training sessions.
  • The implementation of strategic sourcing and eProcurement cannot be relegated to a secondary function, low priority or part time job for key personnel.
  • Executive sponsorship of the teams implementing eProcurement, project is of paramount importance.
eProcurement is not just automating the procurement process and strategic sourcing is not simply about consolidating purchase. Companies are automating the purchase process from requisition to payment all along the value chain creating a paperless, fast and secure eProcurement process.