Essay on Boeing Austraila Limited - Eprocurement

2001 Words Sep 25th, 2010 9 Pages
Executive Summary

As Russell Menere, I recommend the management of Boeing Australia Limited to follow the footsteps of Boeing Seattle to adopt and implement cost effective e-Procurement system, which can be interfaced with the legacy information system as we have IT infrastructure in place that is our core strength.

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.

Investing in an e-procurement system BAL would seek short term improvement tool that would simplify the procurement process
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If BAL invests in expensive system, it will become BAL cost and the maintenance cost would be larger and higher than the initial cost that is invested in the new system. If we have the high cost, there are ways to press the cost, and one way is to bear it to the suppliers/vendors/clients – or customers. By pressing down the price given by supplier, buying cheaper stuffs from suppliers or setting expensive price to the customers ADF. If ADF -customer is not ready to bear it all, it might cost BAL hard.

This is the reason why BAL does not want to give the cost to the suppliers and in turn charge their customer hence decided not to invest into the sophisticated system being the strategy of the company itself.

Taking the advantage of the new opportunity available through e-business technology, let us analyze the e-Procurement system as a tool to interface with the existing BAL legacy information system.

E-procurement is a form of e-commerce which relates to B2B (business to business) relationships end to end in sales (from supply side) and acquisition (from buyers side) of goods and services.

Various forms of e-Procurement, they are:

1) Electronics Data Interchange (EDI) – EDI ranges from file exchange for orders to e-mail for routine purchases internally and externally at BAL. EDI uses wide area network (WAN) BAL’s information systems architecture encompasses connectivity in

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