U.s. Procurement And Strategic Sourcing Activities

Organisations around the world are increasingly operating in very dynamic business environments. Among the areas that are being monitored is the way raw materials for production are procured and how the finished products reach the market and eventually the consumer. This paper will provide a review of published documents on strategic procurement in organizations by providing a critical analysis of the strengths and weaknesses of their findings. The paper will present the impacts of the findings of the reviewed articles on the activities of an organisation that operates in a business to customer industry. And also a supermarket will be used in this case.

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-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

MED-X, a Fortune 500 pharmaceutical company with headquarters in Houston, Texas with 54 plants and more than 40,000 employees world-wide, has undertaken a $2 million Ariba e-procurement project implementation. MED-X was spending $3 billion annually on indirect goods and services. It is estimated that implementation of the Ariba e-procurement system will save the company $200 million annually and also reduce spending, streamline the procurement process and expedite user adoption. An additional benefit of the project is going to be nationwide

Advancement of technology and globalization has changed the way companies are undertaking their business operations in the current dynamic and competitive business environment. Internet access as led to usage of technology for myriad of reasons including communication, business and education (Chaffey, 2014). The business community has been changed completely by internet. Recently, internet has become an integral part of companies as a means of carrying out business. This has led to emergence of electronic business where organizations are using internet to conduct business externally or internally. E-business makes use of internet technology to entice, satisfy and keep consumers who purchase its services and products. E-business also uses internet technology to streamline its supply chain, procurement system and manufacturing in order to deliver efficiently the right services and products to the consumers. For an e-business to be a success, various internet-enabled applications such as portals, e-commerce websites, online marketplaces, customer relationship and supply chain management (Meier and Stormer, 2009).

The continued advances in procurement and information technologies, have presented BAL an opportunity to build on initiatives put in place since 1999. The P-Card initiative has produced cost savings through the shortening of procurement process for non traceable generic goods, but new e-based initiatives must be sought to further stream line the bidding and contracting process.

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.

This is an in-depth study of Elemica’s existing B2B online business and the report contains the findings and its business potential of achieving a larger market share of the online supply chain management in the world. Several key factors have been considered and analyzed and a strategic plan developed to achieve Elemica’s e-Business initiative of global expansion.

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.

For a long time, procurement has been looked at as negotiating to get better prices. Many organizations still view procurement as a way to influence spending to get discounts and lower costs from their suppliers. However, sustainability and the supply chain risks that companies face today call for procurement to be different now. Organizations can see real savings by looking at total cost of ownership, which can include a lot of the end-to-end supply chain costs. Disruptions are unavoidable and every decision involved in the procurement process has a risk factor to it. In order for procurement to influence and affect a company it must present a business case that it is a value added function. An organization can add value long term with its ability of purchasing within procurement.

Every organisation requires goods and services from external suppliers or providers as no company is an Island. These goods are to be acquired at the right time, right source, right quality of materials, right quantity and also these goods are to be of the right price in order to give the organisation an advantage over its competitors( competitive advantage) allowing it to generate greater sales and retain more customers than its competition. We will be looking at HEWLETT-PACKARD. Hewlett-Packard emphasis has gone beyond just reacting to the needs of users as and when they arise, to a forward looking proactive approach. This reflects the contribution that the management makes.

Organizations conduct transaction on a global scale, and they must adapt to the advances in technology to compete and succeed. E-commerce will provide a platform to promote growth and

E-procurement can occur in a Simplified Competitive Contracting method and a Formal Competitive Contracting Method. As the name suggest the simplified provides much easier way complete a transactions. This option would include following methods: purchase cards, petty cash, auctions and reverse auctions, net marketplaces, vertical exchanges, horizontal exchanges, and web portals (Garrett, 2010, p. 69). These methods provide a simplified approach to electronic purchases. Research has indicated “[t]he potential effects linked to the adoption of e-procurement solutions are estimated to be worth a 7-10% reduction in overall project purchasing cost, essentially due to greater efficiency in internal process, a shortening of project duration, and reductions in non-conformity and purchase prices. (Cagno, Di Giulio & Trucco, 2004, p.24). With the addition of an E-procurement plan, buyers are able reduce paperwork and other overhead cost. “Implementing a Web—based e-procurement system for direct procurement not only makes the operational processes of trading partners more effective, but it also makes inter-organizational coordination among trading partners more efficient” (Tai, Ho, & Wu, 2010, p. 5401).

Marthandan ,Malarvizhi , Tehrani (2016) Analysis the quality factor that significant impact on the success Of E-procurement implementation. This study has focused on critical success aspects of E-procurement when, it comes to implantation. This research paper leads through a structural equation model. Information gathered from 208 directors to convey quantitative method to research the relationship between E-procurement quality factor .In the outcome this investigation demonstrates that quality of organization culture affect the E-procurement. On the other IT infrastructure does not have critical relationship at E-Procurement success implementation. In addition, quality of knowledge has moderate relationship in the success of E-procurement but these variables do not influence directly to the dynamic capacity of Organization. In the suggestion, electronic service is most common need to precede industry environment and monetary development. We have to adapt the quality components that can apply on supply chain network at worldwide level to enhance success implantation of E-procurement.

Nowadays there is a tendency among companies who are more and are becoming part of e-procurement: that’s mean, increasing number of companies which use web-sites and web-based applications as a SCM solution.