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Enabling E Procurement – Guest Blog

Author´s Name: Rahul SharmaRahul

Job Title: Senior Buyer

Where do you reside: India

LinkedIn profile: in.linkedin.com/in/rahulsharmadr/

Website: www.SCMProcure.com

A quote about Procurement: “Elevating the business”

Give a brief introduction about yourself. : 6+ years of experience in Procurement, having worked in Water Management, Power Generation and Oil & Gas OEM industry. I love exploring new Procurement methodologies and practices, be it techno-commercial, vendor development, E-Auction, managing expediting, negotiations, strategic sourcing, cost analysis, and other related procurement activities. I have a keen interest in building career in Procurement Intelligence/Advisory Services/Consulting. 

Enabling E Procurement

E procurement can be best defined as an automated platform for purchasing process. The process essentially covers an automated B2B transaction for sale & order processing. E-Procurement is an all-inclusive inter-linked network that supports purchasing and leverages the purchasing power for the purchasing manager/professional.

E procurement typically involves a number of different processes/tools, including automation of internal ordering & planning processes (e.g ERP), System based catalogues with real time availability & pricing details from approved supplier, e-RFP process to leverages e-auctions, to invite bids on scope of supply & work for a specific job.

Implementing E-procurement system typically helps improve below:

  • Reduced spend
  • Reduced prices by combining volumes and negotiating volume discounts.
  • Reduced PR-to-PO cycle & cost
  • Improved Inventory planning & stock management
  • Improved cash-flow and production cycle
  • Improved MRO, etc.

Advantages of E-Procurement

The reason why most companies are moving toward an integrated e-procurement process is to improve productivity, provide visibility in day-to-day transactions and make the process easier for purchasing team to plan their supply need & control the pricing to company’s benefit.

Some of the major advantages of implementing E-procurement are listed as under:

Reduced costs & controlled spend

Costs can be reduced by leveraging your volume & negotiating a better volume discount, having healthy supplier network, by using system improvements to identify & reduce external spend. E-procurement eliminates the need of paperwork, rework and errors, thus reducing the administrative costs involved with the processes.

Improved Productivity

Internal clients/planners can place a request or purchase through the online catalogue of approved items through an on-line requisition and ordering system, thus ensuring that the purchasing team does not work on low value transactional processes like RFQ release and order process, which means that purchasing can solely focus on high value processes like strategic sourcing, supplier relationships, new supplier development, keeping a close eye on total spend, and analysis ways to improve the spend by various techniques.

Better Controls

Standardized processes & workflows ensure that the correct hierarchy of authorization is set-up for each transaction and that spend is monitored wisely. Such workflows & processes ensues that each order complies with the company policies, thus improving the visibility during the auditing and eliminating the need of maverick purchasing.

Spend Visibility

Keeping a centralized track of transactions ensures automated reporting on requisitions, purchase, ordering process and payments transmitted. E-procurement ensures compliance with existing and established contracts, and enables complete visibility to spend.

E-procurement can be fully utilized if the systems and processes to manage & control it are in place. Softwares are required to develop standard procurement documentation like e-RFI, e-RFP, and e-RFQ, techniques for sourcing & purchasing goods. An adequate, fully integrated e-procurement approach is needed for overall success.

E-procurement also enables supplier database, spend management, supplier qualification, maintaining key supplier information etc.

 

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