Essay about Procurement at Betapharm Corp. (a)

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Define the Issue

The Betapharm sourcing team needs to make an urgent decision whether products that are as diverse as raw materials (Malic Acid) and hotel contracts can be electronically sourced by using their already acquired ePass sourcing system. The aim is to find ways to better control costs and to remain competitive.

Analysis The global hotels issue is that the cost on hotel spending is high. The annual total spending in 2003 was €70M. Although Betapharm has a global travel agent, employees are acting as independent agents when making hotel reservations. Each employee has his own set of preferences and criteria. The company has a large supply base of over 1,500 hotels currently being used. If Betapharm changes to
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In addition to the adequate amount of suppliers, a third criterion would be based on the supplier’s ability to use ePass. The fourth criterion is the ability to repeat the sourcing method yearly in order to make the system effective for a long term basis. The last criteria that the sourcing team should consider ensuring that the overall ePass system requires less time while lowering the cost of sourcing. The sourcing teams needs to ensure that the overall process increases the firms’ efficiency and that it doesn’t put Betapharm at risk.

Analyze and Evaluate Alternatives

The first alternative is to use the ePass sourcing method for both Malic Acid and global hotel suppliers. The advantages of using the ePass are that Betapharm already has the ability and familiarization of using this system and ePass would reduce cost by saving time as the system can evaluate bids. The system includes specifications and requirements which also increases the communication level to potential suppliers as well as narrows down suppliers to only those whom qualify. Disadvantages to using ePass for both Malic Acid and global hotel suppliers are that not all suppliers have the access or the ability to use the electronic system. If there aren’t enough suppliers, then Betapharm can’t host reverse auctions which would be cost advantageous for the firm. Another con to using ePass is that Betapharms’ current Malic Acid supplier, Tao Pharmaceutical (Tao) is unable
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