chapter 9 e procurement n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Chapter 9 e-Procurement PowerPoint Presentation
Download Presentation
Chapter 9 e-Procurement

Loading in 2 Seconds...

play fullscreen
1 / 40

Chapter 9 e-Procurement - PowerPoint PPT Presentation


  • 155 Views
  • Uploaded on

Chapter 9 e-Procurement. Program. The Purchasing Process Purchasing models: Buygrid framework Kraljic’s framework e-Procurement. The Purchasing Process. Purchasing. (Externally) acquisition of goods, materials and services At optimal conditions

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Chapter 9 e-Procurement' - vicky


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
program
Program
  • The Purchasing Process
  • Purchasing models:
    • Buygrid framework
    • Kraljic’s framework
  • e-Procurement

www.wiley.com/go/ebusiness

purchasing
Purchasing
  • (Externally) acquisition of goods, materials and services
  • At optimal conditions
  • Needed for production or sales and maintenance

www.wiley.com/go/ebusiness

organizational buying
Organizational buying

‘the decision making process by which formal organizations establish the need for purchased products and services, and identify, evaluate and choose among brands and alternatives.’

www.wiley.com/go/ebusiness

the five rights
The Five Rights

The acquisition of materials and services:

  • Of the right quality
  • In the right quantity
  • At the right time
  • At the right price
  • From the right supplier

www.wiley.com/go/ebusiness

classes of products
Classes of Products
  • Basic raw materials
  • Components
  • Semi Manufactured Articles
  • Capital goods
  • MRO
  • End-Products (for direct sale)
  • Services

www.wiley.com/go/ebusiness

business value
Business Value
  • Industrial firms: 58% of each Sales $ spent on purchases from outside sources.
  • From 36% for instrument manufactures to 84% for petroleum and coal products.

www.wiley.com/go/ebusiness

slide9

Pareto Analysis

Purchasing

Revenue

100%

95%

80%

70%

100%

20%

Number of products

www.wiley.com/go/ebusiness

pareto analysis
Pareto Analysis
  • A-products: 20% of the products account for 80% of purchasing amount.
  • B-products: 50% account for 15%.
  • C-products: 30% account for 5%.

www.wiley.com/go/ebusiness

modelling the purchasing process
Modelling the Purchasing Process
  • The Buygrid framework:
    • Internal Perspective
  • Kraljic’s framework:
    • External Perspective

www.wiley.com/go/ebusiness

buygrid framework
Buygrid Framework

www.wiley.com/go/ebusiness

buygrid framework organization of buying process
Buygrid framework: Organization of Buying Process
  • The Buying Process (Process is ‘creeping commitment’)
  • Recognition of a need
  • Determination of characteristics and quantity
  • Description of characteristics and quantity

www.wiley.com/go/ebusiness

buygrid framework 2
Buygrid framework (2)
  • Search and Qualification of potential sources
  • Acquisition and Analysis of Proposals
  • Evaluation of Proposals and Selection of suppliers
  • Selection of an order routine
  • Performance feedback and evaluation

www.wiley.com/go/ebusiness

three basic s teps
Three Basic Steps
  • Information
  • Negotiation
  • Settlement

www.wiley.com/go/ebusiness

buying situations
Buying Situations

‘Newness’ of the buying situation:

  • New Task
  • Modified Rebuy
  • Straight Rebuy

Typically: NT  SR MR

www.wiley.com/go/ebusiness

kraljic s framework

Routine

Kraljic’s Framework

www.wiley.com/go/ebusiness

purchasing as part of supply chain management
Purchasing as part of Supply Chain Management
  • Collaborative Planning: the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole.

www.wiley.com/go/ebusiness

developments in purchasing
Developments in Purchasing

Purchasing’s Impact on Profitability:

  • Major area for (potential) cost savings
  • Major impact on quality
  • Technology Development and Improvement of Product/Process Design

www.wiley.com/go/ebusiness

purchasing processes
Purchasing Processes
  • Slow and Inefficient (C-type products)
  • Communication Intensive
  • Little IT support
  • Candidate for BPR

www.wiley.com/go/ebusiness

it and purchasing
IT and Purchasing
  • CD-Rom for product and supplier info.
  • EDI for contracting and ordering
  • Electronic Catalogue in centralized database
  • Internet Technology

www.wiley.com/go/ebusiness

e procurement1
e-Procurement
  • ‘The use of Internet technologies over Intranets, Extranets or the web to streamline the procurement process’
  • ‘Electronic procurement automates, streamlines and customizes a company’s operating resource purchasing process’

www.wiley.com/go/ebusiness

e procurement models
e-Procurement Models

Hub and Spokes approach:

  • Buyer-Centric: the buyer organization is at the hub, connecting suppliers at the spokes
  • Seller-Centric: the supplier is at the center, with buying organizations connected at the spokes
  • e-Marketplace: a third party is at the hub, with buying and selling organizations trading with each other.

www.wiley.com/go/ebusiness

internet based procurement
Internet-based Procurement
  • Search engines: support information phase
  • e-Catalogs: allow to browse, search and place orders
  • Internet EDI: less costly than VAN EDI
  • Online auctions and Bidding systems: support negotiating phase
  • MRO Procurement: Highest Predicted Impact

www.wiley.com/go/ebusiness

slide28

OBI – Architecture

Supplier

Supplier

Supplier

catalogue browsing/query

catalogue browsing/query

Catalogue mgt

Catalogue mgt

Catalogue mgt

status

status

Requisitioner

Requisitioner

Requisitioner

Price info.

Price info.

Price info.

order entry

order entry

order entry

Inventory mgt

Inventory mgt

Inventory mgt

purchase

purchase

view

view

order

order

purchasing catalogue

purchasing catalogue

request

request

check

check

authorize

authorize

payment

payment

official

official

requisition

requisition

purchase order

purchase order

confirm

confirm

request

request

payment

payment

Buying Organization

Payment

Payment

Payment

Requisitioner

Requisitioner

Requisitioner

profile

profile

profile

invoice

invoice

authority

authority

authority

Search for suppliers

Search for suppliers

Search for suppliers

Management approval

Management approval

Management approval

www.wiley.com/go/ebusiness

components of e procurement
Components of e-Procurement
  • Requisition management
  • Transaction management
  • Connectivity management
  • Content management
    • Up-to-date data
    • Technical functionality

www.wiley.com/go/ebusiness

requisition management
Requisition Management
  • End user processes order
  • Selection in e-catalogue
  • Workflow support (e.g. authorization)

www.wiley.com/go/ebusiness

transaction management
Transaction Management
  • Processing order to supplier through EDI, e-mail, etc.
  • Standards:
    • XML/EDI
    • Open Buying on the Internet (OBI)

www.wiley.com/go/ebusiness

connectivity management
Connectivity Management

Integration with Supplier and Internal systems – Internal (ERP):

  • Budget control
  • Order Registration
  • Accounting
  • Payment

www.wiley.com/go/ebusiness

content management
Content Management
  • Heart of e-Procurement System
  • Data administration
  • Allows:
    • Information Sharing
    • Reduction number of suppliers
    • Use of Buying Power

www.wiley.com/go/ebusiness

e catalogs
e-Catalogs
  • Electronic representations of information about products and services of an organization
  • Advantages:
    • greater flexibility, personalize content, standard interface, reduce cost of coordination, data gathering and analysis.
  • Disadvantages:
    • cost of system integration, distributed order and delivery volumes by individual employees

www.wiley.com/go/ebusiness

slide35

Employee

e-Catalogue

Budget

Control

Supplier

e-Procurement

System

Accounting

Internal Ordering Process

www.wiley.com/go/ebusiness

types of e catalogs
Types of e-Catalogs
  • (Peer to peer through) supplier managed catalogs
  • (Peer to peer through) buyer managed catalogs
  • (Intermediated through) electronic marketplace managed catalogs
    • Public model: single aggregated
    • Personalized model: additional personal info

 The Catalog Management Intermediary

www.wiley.com/go/ebusiness

turban et al 2000 s ummarize the benefits of e p rocurement
Turban Et Al. (2000) summarize the Benefits of e-Procurement:
  • Reduced purchasing cycle time and cost
  • Enhanced budgetary control (achieved through rules to limit spending and improved reporting facilities)
  • Elimination of administrative errors (correcting errors is traditionally a major part of a buyer’s workload)
  • Increasing buyers’ productivity (enabling them to concentrate on strategic purchasing issues)
  • Lowering prices through product standardization and consolidation of buys
  • Improving information management (better access to prices from alternative suppliers and summaries of spending)
  • Improving the payment process (this does not often occur currently since payment is not always integrated into e-procurement systems).

www.wiley.com/go/ebusiness

supply chain
Supply Chain

A network of connected and interdependant organizations mutually and co-opratively working together to control, manage and improve the flow of materials from suppliers to end-users.

www.wiley.com/go/ebusiness

e procurement solutions
e-Procurement Solutions
  • Ariba (www.ariba.com):
    • Operating Resource Management (OMRS)
    • ORMX: provider based
    • Every employee can order from behind his PC
    • Only buying
  • Commerce One (www.commerceone.com):
    • Marketsite (supplier)
    • Buysite (buyer)
    • Collaborate

www.wiley.com/go/ebusiness