eProcurement
eProcurement (or Electronic Procurement) is the business to business (b2b) process of buying and supplying goods and services electronically using dedicated software, Enterprise Resource Planning, Electronic Data Interchange or via the internet.
Using eProcurement has many advantages over traditional procurement methods. The buyer is able to compare products and services using an online managed catalogue, and can choose the right products and services quickly and easily. Suppliers can be chosen based on criteria such as cost and availability. Probably the most convincing argument for eProcurement is that it cuts down on administration and paper costs, and reduces the time taken to order goods and services. It also makes a Just In Time (JIT) system, whereby goods or materials are ordered as they are needed to reduce the amount of capital tied up in stock or materials, even more effective.
Efficient supply chain management needs to ensure that goods and materials are supplied in a regular and reliable fashion so that manufacturing can continue and orders can be fulfilled. eProcurement can also ensure that purchase orders are processed in a timely manner to avoid complications in the supply chain, and make purchasing goods, materials and services more effective.
Enterprise Resource Planning (ERP) software can be used to work out when goods and materials are required, based on what has been used already, and from the Bill of Materials required for each finished product. Once the required goods and materials have been identified, the software uses eProcurement to order the required items, so that the right goods and materials are delivered. In addition, the ERP software can be used to cancel, speed up or delay, or amend an order. As well as ordering goods and materials, ERP software can be used to notify suppliers or manufacturers of any maintenance, repair or operating issues, so that the production process is not affected. When the production process is affected perhaps by a broken machine, using the ERP software can help to greatly reduce downtime. Some machines use self diagnostic features to notify operators or management of component failure, and can even order replacement parts using the eProcurement side of the ERP software.
eProcurement is very popular in a lot of large organisations and especially those in the public sector such as local councils, government departments and the NHS. In these environments, eProcurement involves indentifying and purchasing from suppliers based on electronic catalogues, and electronic tenders. Using eProcurement allows more suppliers, including those from further afield, abroad, and worldwide, to bid for the work. eProcurement helps cut down unnecessary costs, as each department orders from the same suppliers. Administration is reduced as everything is done online, cutting down on paperwork, and minimising the risk of error. Orders take less time to be fulfilled as the whole process is automated. eProcurement is very effective and can dramatically improve efficiency as goods and services are received at the most appropriate prices, with the appropriate availability and the appropriate support and maintenance where relevant.
Whatever your industry, taking advantage of eProcurement can benefit your organisation. ProcServe has over 2,700 global customers and over 40,000 end users, including the Crown Prosecution Service, HM Treasury, the Department for Work and Pensions and the Environment Agency. You can be assured that ProcServe can help you improve procurement efficiency and effectiveness, whilst reducing ordering costs and administration. Find out more about Procserve eProcurement today.
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