Essay on Boeing Austraila Limited - Eprocurement

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)

Any decision we make, in regards to system upgrades, must take into account the core directive of our business – “To create shareholder value through the provision of customer focused space communications’ and system support solutions.” – BAL Vision Statement. We have implemented various procurement initiatives since 1999, and must continue to look at ways to lower over all cost and to create added value, to both our shareholders and customers. We are in the business of “System Support”, and cannot continue to “sit on the fence” in the age of continued technological advances in procurement practices. If we do, we run the risk of losing our strategic advantage amongst our competitors, and alienating our most important customer, the ADF. Because of the size of BAL, a complete “cleansing” and re-tooling of our present system could be cost prohibitive.

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.

If Boeing can continue to produce outstanding products and stand ahead of the competitors they will continue to be the dominate figure in the market.BOEING’S e-ENABLED ADVANTAGE

Electronic commerce technology and practice has been sought after since the development of the World Wide Web, and many business institutes and corporations have turned to electronic commerce technologies with hopes to develop the efficiency and effectiveness of their business models through e-commerce. A very prominent form of e-commerce is e-procurement which is mainly for B2B transactions occurring between businesses.

Inter-organisational relationships have improved as a result of an increased level of perceived transparency. When a buyer allows a supplier to become familiar with the buyer’s own operations, it is referred to as transparency (Lamming, cited in Icasati-Johanson & Fleck, 2003). The use of e-procurement has seen an increase in transparency. Until just recently, transparency was considered unfavourable (Lamming et al, cited in Icasati-Johanson & Fleck, 2003) however businesses are now using it as a sign of their commitment to the supplier. Many businesses are now working together to create technological systems that promote the free sharing of information. By increasing the visibility and transparency amongst supply chain partners, businesses are able to demonstrate their commitment. This helps build trust, which is essential for creating highly functioning inter-organisational relationships.

E-commerce replaces the manual business processes with their automated electronic equivalents to accelerate ordering, delivery and payment

The main reason companies have embraced e-procurement is to increase productivity, provide visibility into day-to-day transactions and make it easier for users to get the supplies that they need.

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.

The second perspective considering the Procurement stages is also noted in the book “Digital Business – Concepts and Strategy” as, “Three types of B2B exchanges often illustrate the history of the relationship between a seller and a buyer: new buy, modified rebut, and straight rebuy” (Coupey, 2005, p. 367) which takes the vantage point of procurement activities. In a new buy procurement situation is encountered by building new exchange relationships where the burden of all the procurement process stages (Information

Businesses need to take advantage of e-commerce to beat competition. There is an example of a leading organization in the building industry, with over 2000 suppliers and 25 stores serving both trade and retail customers. They wanted to reduce overheads, strengthen their supplier relationships and take advantage of e-commerce.

· Support for All Purchases – Oracle Internet Procurement supports production, MRO, service and administrative purchases on a single procurement backbone—a single solution supporting the complete procurement process across your enterprise. You won’t have to synchronize business rules or files across multiple systems, or worry about training users on manifold systems. Different types of buying are supported by the catalogs you make available to your employees. And, when new software is released, you won’t have to worry about integration or maintenance issues. The entire procurement system is built on one technology and maintained by the same organization—Oracle.

E-procurement help to provides various benefits, but still the implementation is in development stage. Since not every business model or e-procurement system are equally stable for supporting different business processes, so companies are approaching

E-procurement can be defined as the process of proposal, ordering and payment of material by means of internet and IT software. Moreover, e procurement is the application of digital technology to perform contracting, service, transportation and payment through electronic devices. E procurement is more than the material procurement online. It enables better interaction of supplier and buyer which includes bids, question and answers.