Professional Documents
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Krishan K. Batra
President & CEO
ISM-INDIA
1 Leading excellence in procurement and supply
Introducing the Presenter...
Krishan K. Batra has diverse experience of 4 decades in the field of Technology &
SCM. He enjoys engaging people in sustainable transformation and inspiring
business excellence. In his last assignment with UN organization as Chairperson of
the supply chain, he was instrumental in re-engineering business processes and
implementing ERP worldwide.
He started his career with TATA Group after completing M.Tech from IIT Delhi. Later
he completed MBA from Syracuse University in USA. Krishan has worked in
Switzerland, Denmark and USA in different capacity. He is the founder of UNSPSC
which is global standard for coding goods and services. He has worked with many
organizations to optimize supply chain and build their professional capacity.
2
Leading excellence in procurement and supply
Learning Objectives
❖ Role of Technology
❖ Success Factors
❖ What, Why & How of E-Procurement
❖ Use of Digital Tools/Technologies
❖ Usage of Blockchain, Data Analytics, IOT, AI, 3D
Printing, to facilitate sustainable Procurement
17. Process 16. Send 15. Approve 14. Process 13. Review
returns payment payment exceptions invoice
Leading excellence in procurement and supply
ITC M15:U2:2.3-
E-PROCUREMENT
❖ E-procurement is a platform that automates and
rationalizes the procedures from demand to payments
using web technology.
❖ Applications of E-procurement technologies, namely E-
tendering, E-sourcing, E-informing, E-ordering, and E-
reverse auctioning.
❖ “Ensuring that the items and services we acquire are as
sustainable as feasible, with the least environmental
effect and the greatest beneficial social outcomes.”
❖ Allows better coordination with suppliers, quicker transaction time, and improved
process efficiency;
❖ Simplification and/or elimination of repetitive and redundant tasks resulting in cost and
time savings throughout the procurement cycle
Allow procurers to choose relevant sustainability criteria and contract terms from
drop-down list;
Allow to track the use of SP criteria and to verify that suppliers have
provided the required information to demonstrate their compliance.;
Store and retrieve data on vendors complying ‘Supplier Code of Conduct’
Facilitate systematic data entry, collation, tracking, and reporting on SP
progress against indicators;
Enable e-procurement system to apply life cycle costing for procurement
of greener products, works and services
Reduce the reporting burden on procurers and improve data consistency and
quality.
Leading excellence in procurement and supply
Which E-Procurement Tools are Suited to Each Category of Purchases?
M
Impact/ Bottleneck Critical
supply
opportunity/
risk rating Routine Leverage
L
N
80% of items = 20% of value 20% of items = 80% of value
Expenditure
Leading excellence in procurement and supply
ITC M15:U5:5.3-
E-Catalogues
H Bottleneck Critical
E-catalogues are generally not E-catalogues are generally not
suitable for procurement of suitable for procurement of
non-standard items. non-standard items.
M
Impact/
supply
opportunity/ Routine Leverage
risk rating Likely to be a major source of May be possible to locate
L routine purchases such as these goods in an e-catalogue
ORM and other items that are but the fixed price nature of
common and widely available. catalogues removes the
Suitable for distributed use by opportunity for leverage.
many buyers in the company. Conclusion: don’t use
catalogues for leverage items.
N
80% of items = 20% of value 20% of items = 80% of value
Expenditure
Leading excellence in procurement and supply
ITC M15:U5:5.3-
Horizontal Exchanges
H Bottleneck Critical
Not applicable; non-standard Not applicable; non-standard
items would not generally be items would not generally be
found in a horizontal found in a horizontal
exchange. exchange.
M
Impact/
supply
opportunity/ Routine Leverage
risk rating Excellent source for purchase Use horizontal exchange if the
L of ORM requirements. item is standard across many
industries.
N
80% of items = 20% of value 20% of items = 80% of value
Expenditure
Leading excellence in procurement and supply
ITC M15:U5:5.3-
Vertical Marketplaces
H Bottleneck Critical
Expenditure
H Bottleneck Critical
Not usually applicable for Not usually applicable for
sourcing non-standard items. sourcing non-standard items.
M
Impact/
supply
opportunity/ Routine Leverage
risk rating May be used if purchase items May be used if the item is
L are commodity-like but there commodity-like but there are
are price differences between price differences between
suppliers; auctions help to suppliers.
drive out such price
discrepancies.
N
80% of items = 20% of value 20% of items = 80% of value
Expenditure
Leading excellence in procurement and supply
ITC M15:U5:5.3-
E-Sourcing or ‘RFX’ Solutions (RFP/RFQ/RFI)
H Bottleneck Critical
RFPs / RFQs are a potential RFX can be an excellent
source of bottleneck items; source for critical items: the
however, your low level of global search nature of RFX
expenditure on the item may solutions combined with your
result in few responses. relatively high spend increases
M the chance of finding suppliers
Impact/ and reduces your risk for the
item.
supply
opportunity/ Routine Leverage
risk rating Not applicable as RFP / RFQ / Not applicable as RFP / RFQ /
L RFI would not normally be RFI would not normally be
required for procurement of required for procurement of
standard items. standard items.
N
80% of items = 20% of value 20% of items = 80% of value
Expenditure
Leading excellence in procurement and supply
ITC M15:U5:5.3-
Selection Criteria
for E-Procurement Solutions
a) Cost e) Systems integration
• Level of cost f) System interoperability
• Costing model g) Scalability
b) Availability h) Security
c) Functionality i) Ease of use
• Purchase item availability j) Vendor considerations
• Procurement process • Vendors’ customer base
• Catalogue functionality • Local / global presence
• E-marketplace features • Reputation
• Auction functionality • Financial strength
• E-sourcing functionality • Quality of team
d) Value added business services • Service level and customer support
t
t rac
d. Prepare vendor agreement Con
P
Make sure you
include all selection
criteria by which RF
you intend to
evaluate your
choice
Set
Vendor measurement
management requirements
procedures t rac
t
Con
Agree service
Legal levels
protection
Agree problem
Contract Agree payment, solving
termination deliverables and approach
timing
Leading excellence in procurement and supply
ITC M15:U5:5.6-
Performance Measurement
E-Procurement E-Procurement
Implementation KPIs Performance KPIs
Obtaining
Finding approval
suppliers and
products
Generating
and managing
Systems the order
integration Billing and
payment
Leading excellence in procurement and supply
ITC M15:U2:2.5-
Advantages of E-Procurement
12
9 3
6
Communication
via Internet
RFI
(Request for Information)
Buyer requests info to help
evaluate whether they
might want to undertake
a particular project or
buy a particular product
Internet of Things (IoT) describes a network of physical objects— “things”—that are embedded with sensors,
software, and other technologies to connect and exchange data with other devices and systems over the
internet.
(Source: Oracle)
Primary Purpose
❖To collect data from the real world and translate that data into
information, thus facilitating decisions by the users/systems