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E-Procurement Marketplace. Internal Processes. Promotions Management. Retail Fulfillment. Unsaleables Management. Order Management . …Other Applications. Collaborative Planning. Sell-Side Processes. Customer Management. Item Master. Item Master. Item Master. Item Master. Item Master.

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internal processes
Internal Processes

Promotions Management

Retail Fulfillment

Unsaleables Management

Order Management

…Other Applications

Collaborative Planning

Sell-Side

Processes

Customer Management

Item Master

Item Master

Item Master

Item Master

Item Master

Identify and Compare Materials and Suppliers

Demand Forecasting/ Planning

Purchase Aggregation (Group Buy)

Buy-Side

Processes

RFP/RFQ Sourcing & Auctioning

Supplier & Material Rationalization

Product Development Collaboration

Matching Supply with Demand

eProcurement (Requisition & Approvals)

Spend Analysis & Optimization

e procurement marketplace3
E-Procurement Marketplace

Requisition

Catalog

Selection

Distribution

E-Marketplace

Approval

Payment

Buyer

Seller

buyer benefits
Buyer Benefits
  • Compare products and check prices
  • Create purchase order
  • Order tracking
  • Order receiving
  • Payment

http://www.isteelasia.com

purchase options
Purchase Options
  • Catalogs with fixed prices
  • RFQ posting
  • Use RFQ to negotiate
  • Trade leads
  • Alerts
  • Auctions
catalog and content
Catalog and Content
  • Catalog type
    • Product catalog
    • Service catalog
    • Customer-specific catalogs
  • Content
    • Information on products and services
    • Content imported from multiple suppliers
    • Content aggregation by categories
    • Buyers can retrieve content directly from suppliers

http://dmena.dmecompany.com/cgi-bin/ncommerce3/ExecMacro/DMENA/R2DMENA/r2_catalog.d2w/report

procurement process
Procurement Process
  • Facilitate communication
  • Maintain catalog content
  • Requisitioning and order management
  • Real-time tracking
  • Order fulfillment
  • Invoicing and payment
  • Workflow and transactions
  • Infrastructure
  • Customized processes
user management
User Management
  • Who may access catalogs?
  • Who may create or edit requisitions?
  • Who may access purchase orders?
  • Authorization to use e-procurement
  • Enrollment of users
  • Access to trading community
  • Catalog filters
  • Unique contractual relationships between buyers and sellers
  • Supplier identification
  • Shipping parameters
pricing and billing
Pricing and Billing
  • Fixed and negotiated pricing
  • Dynamic pricing
  • Computation of usage charges
  • Distribute operating costs to specific orders
data transmission
Data Transmission
  • Messaging
  • Publishing
  • Transactions are sent over the Internet as messages
  • Synchronize with buyer/seller financial posting
  • Security
price advantage

Process Step

Manual/EDI

E-Procurement

Time

(Minutes)

(Minutes)

Product Selection

20

3

Availability/Price Check

10

1

Requisition Creation

11

2

Requisition Approval

21

3

PO Generation

11

0

PO Approval

3

0

Send PO to Vendor

14

0

PO Confirmation

4

0

Status Check

11

1

Receive Shipment

12

2

Match Invoice Receipt

8

5

Process Exceptions

8

3

Payment Approval

4

3

Payment Generation

8

5

Process Returns

5

3

Total Minutes/Purchasing Cycle

150

31

Cost/Cycle Time (Avg. $0.50/minute)

$75

$15.50

Price Advantage

Source: NAPM and Commerce One, Inc.

Source: NAPM and Commerce One, Inc.

characteristics of structured and unstructured procurements
Characteristics of structured and unstructured procurements

Structured

Procurement

Unstructured

Procurement

Product characteristics

-Low demand uncertainty

-High demand volume

-Specifications do not change with each order

-High risk of supply uncertainty

-High demand uncertainty

-Low demand volume

-Greater product variety

-Low risk of supply uncertainty

Process characteristics

-High level of automation

-Mostly of re-orders

-Product selection, supplier selection and order details and coded in to procedures

-No approvals needed for individual transactions

-Orders initiated manually

-Mostly of one-time orders

-Product selection, supplier selection and order details vary by transaction

-Approvals are required for most transactions

Examples

-Tooling items

-Welding supplies

-Custom replacement parts

-Office furniture

-Office equipment

selling online
Selling Online
  • Create and deliver product content
  • Brand messaging and promotions
  • Deliver customer service
  • Punch-out capability
  • Consolidate catalogs using scattered data in different databases
order processing
Order Processing
  • Different channels
    • Web, call centers, cell phones, and brick and mortar locations
  • Customer-specific catalog
  • Buyers must receive targeted content relevant to their products
  • Need to update content for customization
    • Use of data-mining technology
  • Enforce customer-specific contracts and business rules
  • Track contract terms and conditions
slide17

Customized Catalogs

Customer 1

Customer 2

Customer 3

Product

Catalog 1

Product

Catalog 2

Product

Catalog 3

Products

Pricing

Promotion

Content

E-Marketplace

http://www.x-solutions.poet.com/eu/solutions/xsolutions/buyer/xbuy.html

selling channels
Selling Channels
  • Existing contracts (fixed price sales)
  • Auction for surplus goods
  • Distributors
distributor model
Distributor Model
  • Connects sellers to distributors
  • Replenishment orders sent to sellers automatically when inventory runs out
  • Buyer sees distributor’s price and product availability
  • Distributor can negotiate with sellers for discounts
distributor model20
Distributor Model

Manufacturer

1

ORDER

CONFIRMATIONAND

STATUS

ORDER

RESPONSE

Buyer 1

Manufacturer

2

PURCHASE

ORDERS

SALES

ORDERS

Distributor

Buyer 2

Manufacturer

3

Manufacturer

4

Catalog

Buyer 3

Contracts

Orders

Buyer Purchasing Scenario

1.Buyer views distributor catalog and contract prices

2.Manufacturer responds to distributor on sales orders

3.Buyer receives order confirmation

Manufacturer

5

http://www.e-distributor.com/index.html

differentiation
Differentiation
  • Loss of differentiation
    • Can only display standard product information
  • Customer-specific catalogs
  • Punch-out capability to access specific supplier’s site (from e-marketplace)
  • Evaluate multiple product information and return to e-marketplace to complete transactions
punch out capability
Punch-out Capability

Punch out to Supplier 2

Supplier 2

Web Site

Supplier 1

Supplier 2

Supplier 3

Buyers

Suppliers

E-Marketplace