E – Procurement DEFINITION With reference to Tata Steel, e-procurement is a Business to Business system (can also be B2C, B2G or G2G) whereby, the materials required for its production and other operational activities are availed from its providers with the help of Information and Communication Technologies. TATA STEEL Tata steel from the late 1990’s was developing a way to have e-procurement in its operations. As of now, almost every transaction is conducted via e-procurement. Tata steel has four e procurement systems they are • Metal junction.com • An internal e bidding system • E negotiation system • Online stock information from vendor though the internet Metal junction.com In order to improve its procurement needs, Tata Steel has …show more content…
Advantage of e procurement • Reduce the operating cost By introducing the e procurement the organization can eliminate unnecessary stages thus saving cost. In Tata steel by introducing the e procurement they reduced the paper work needed for each transaction. Every data is entered into the e procurement site so that they get the needed information. • Better understand the system and thus can control it By e procurement platform we can analyse the data of the vendors and other users .This way we can develop new system to better serve them. For example in Tata steel seeing the different buying pattern of the foreign and domestic vendors they introduced to site different site for each one. • Reduce the time taken to complete a full cycle E procurement uses a real time information exchange by using Internet or Other network connection. When data is entered in one device the other devices connected to this network is also updated in real time .For example in Tata steel they uses site with internet connection so that user from anywhere can login using a Id and password • Reducing Man hours By implementing e-procurement Tata Steel was able to reduce the man hour in each transaction . Scope for
In G2B, various e-governance tools are used to help the business community which aims to provides goods and services and to internet with the internet. The main purpose is to cut red tape, save time, reduce cost end to create more clear business environment when dealing with the government. The initiatives of the G2B can be exchange such as licensing, permits, but Goods and revenue collection. They can be promotional and facilitative such as trade, tourism and investment. These measures are taken to provide pleasant environment to businesses to promote them to perform more effectively.
Procurement management is the processes to purchase or acquire the products, services or results needed from outside the project team to perform the work. Project Procurement Management involves not just purchasing products, services or results, but also ensuring that those that are purchased are right for the project, meets standards and is based on project requirements. This life cycle includes tracking from order through deployment and completing with invoice reconciliation.
Through e-Procurement system we can improve redundancies in the business process and operations, gain in productivity by upgrading procurement processes. Cost savings by reducing processing time, rationalization of a large number of BAL suppliers and maintaining relationship with Key Suppliers.
E-commerce is the capability of an organisation for having dynamic presence over Internet that allows the company for conducting their business electronically, in spirit of having an electronic shop. Thus, the products can be sold, paid and advertised electronically without the requirement to be processed with the help of human being. Because of massiveness of internet advertising and website can be un-covered to millions of people all around the globe with the information being able to be transformed almost promptly the site can always be kept updated with all latest products for matching with the demand of the consumers (Lee, 2005).
It is quite challenging to discuss about procurement management without stating the importance of its strategies. There are four main basic procurement strategies that serve different functions within a procurement management. To begin with, a “Partnership” strategy focuses mainly on constructing mutual commitment in long term relationship with suppliers. While a “Secure Supply” strategy aims to secure short and long term supply while reducing risk from suppliers. In addition, a “Category Management and E-Procurement solutions” serves as a tool to reduce logistic complexity, improve operational efficiency, and attempts to reduce the number of suppliers. Lastly, a “Competive Bidding” strategy emphasizes on obtaining the “Best Deal” for short term transactions with suppliers.(van weele) Each of these four strategies involves a unique purchasing methodology, which implies that the complexity is embedded in an individual strategic implication. Therefore, it requires different tools to accomplish the specific strategical characteristics. A business entity may need to support and execute procurement decisions with other strategic apparatus with analytical methods, including market analysis, uncertainty analysis, price forecasting, supplier relationship and along with others.(Harvard)
E-procurement has had an increasingly important role in business-to-business(B2B) commerce. Web-enabled B2B e-commerce enhances inter-organizational coordination resulting in transaction cost savings and competitive sourcing opportunities for the buyer organization. E-business has radically altered the ways in which firms interact with their suppliers(Phillips 2003). Continued improvements in Internet technology connectivity provide an opportunity to make procurement for goods and services more transparent and efficient. Six forms of e-procurement applications
Comparing to the option of upgrading the whole procurement system, my recommendation aligns with Russell Menere (National Procurement Manager of BAL)’s idea, which is to implement short term improvements based on current procurement system in
One tool presently available is e-buy. A tool developed with other large buyers and our Parent company Boeing. Since 80% of the procurement transactions are for these “day-to-day” buys, it is imperative these new processes target this segment. Making the process dimplier and more efficient on
E-government solutions facilitate trade, both internationally and within the vast country, and it is help to speed up processes, thereby increasing the ease of doing the business.
Pros: There are average expenses associated with purchasing e-Procurement solution. Future lower costs, and cost savings long-term. Integrates with current legacy system. Based on the integration of current systems, which staff is already using – no steep learning curve and less resistance to change.
That is to say, using e-commerce not only can increase services level to keep customers, but also make profits more than before. Nowadays, there are many companies using e-logistics and e-procurement for customers, because those will be an optimal way to extend and increase business processes in supply chain management and also those are real value methods to attract more customers than before. Therefore, e-commerce can create a lot of additional values in the company in order to maximize its chances of success.
Electronic business (e-business), the use of Internet-based computing and communications to execute both front-end and back-end business processes – has emerge as a key enabler to drive supply chain integration. As an overarching business concept, e-business has received increasing attention from academics and practitioners alike. E-business solutions in general are seeking to enhance supply chain effectiveness and efficiency through the automation of business processes. The adoption of e-business can result in benefits such as higher transparency, reduced transaction, manufacturing and other cost, reduced
Many organizations industriously look for the opportunity to gain the competitive advantages in their industries. One of the opportunities that frequently used by the organization is the implementation of e-commerce. Thus, the e-commerce and the online sale transaction become popular in each industry. E-commerce provides many benefits, such as the saving of shopping time, the cost savings, convenience, and free from geographical constraints.
Competition is fierce in today’s world and a business must work smarter versus harder. Many big name chain stores have achieved success but none like that of Wal-Mart. The following is a review of the Wal-Mart customer and his or her expectations of its procurement process. An additional review of how these expectations affect Wal-Mart’s strategies, policies, and procedures at both the domestic and global level is also included.
Because of globalization, today where clients are looking up for partners rather than suppliers so that they can help them to become more competitive and win more business, e-business is becoming an important issue. E-business will help them in decrease in transaction costs as there will be efficiency in the approval process. Even the purchasing department will become more effective and at the same time it will help in strengthening the partnerships.