1.

What are the benefits of the e-procurement systems for the Airlines Purchasing
Department?

 Reduced inventory cost- E-procurement would help better inventory

management. Cloud based inventory management would bombard them with
more and more information, which can used to stock in better and more efficient
way.
 Centralized procurement system- It would collate everything at one place,
which enable us to go centralized. It would lead to standardization of prices,
orders and fulfillments.
 More information to understand market in context of purchasing
department- Due to centralized system, it would help them to have more
structured information of the market, which can be used for data analysis
purposes to understand market purchasing trends, consumer purchasing
behavior at different geographies.
 It would help them to reduce time allotted in the procurements.
 It would reduce in order cycle time.

2. Mention the concerns of key managers in Cathay Pacific regarding the e-

procurement system implementation?
 Integration of marketplace with e-procurement- biggest concern is how to
integrate traditional market with the new e-procurement system. It would
require a lot of changes in the way purchasing has been done. Adoption is the
one the concerns for the new system.
 E-procurement infrastructure setup- It would require a lot of infrastructural
support for this initiative. Capacity, run time, efficiency, and flexibility are the
concerns.
 Streamline a lot of suppliers- Streamlining a huge number of suppliers is a
concern. Not everyone would be adaptable, and flexible. Price differentiation
would become a concern as different supplier could have priced products at
different price, but due to centralized procurement system, such suppliers would
not be happy.
 This new procurement system lacked the function of inventory management,
which was supported by EMPACS previously.
 Overall Cost
3. What kind of financial metrics can be used to quantity the benefits?
 Cost related metrices-
1. Operational spend/expenditure
2. Financial gains/losses
3. Price differentiations
 Time related metrices-
1. Procurement Cycle time
2. Lead time
 Quality related metrices-
1. Supplier ratings
2. Order fulfilment rate
3. Buyer rating
 4. Product category wise feedback and ratings

4. How can Cathay use the Balanced Scorecard technique to measure the short term and
long-term benefits delivered by CXeBuy? 
 Short term-
1. Track order fulfilments metrices like lead time, Cycle time, and etc.
2. Financial gains/losses- tracking financial gains/losses on different levels
of dimensions
3. Track rating of the suppliers and buyers available on the platform.
 Long term-
1. Ratings of buyers and suppliers can be used to identify and incentivize
good performing stakeholders and push them for better work.
2. Understand behaviour of the buyers and sellers as well through a lot of
centralized data using data analysis.
3. Market research would help them to be more efficient and reduce costs.
5. How can Cathay’s e- Procurement strategy contribute to its mission?

Mission is to be the Asia’s leading e-business airline.

Cathay’s e-procurement strategy would contribute to its mission in the following way-

 Centralized E-procurement system would help them to track, analyze, improve

overall fulfillment strategies on timely basis with a lot of information.
 E-procurement would enable them to reduce staff working on procurements and
can be used elsewhere.
 It would help them in cost cutting. Cost cutting is one of the biggest.
 It would help them to understand buyer and supplier in better way and
understanding your core stakeholders would help you to be leading airline in
business. Tracking, performance, ratings, order purchases, order fulfillments are
few of the ways to do this.