ROLE OF IT IN PROCUREMENT

Group One

on line transaction processing. decision making and enables suppliers production plans to be more aligned to customer demand and usage rates . It results into fast communication. This supports co-ordination. materials handling. recording and tracking stock movements. This has changed production and distribution processess  ICT has raised supplying chain capacity and productivity by allowing faster.How IT has changed Procurement and Supply Chain Management  Access to information for purchasers and suppliers on the internet.  Improving communication and visibility of information through websites and email. more accurate and consistent work than human beings can achieve alone. has lowered barriers to entry and opened new supply markets for suppliers  It has changed business processing operations functions to automated production.

 It enhances management information and . Streamlined processes and lower pricing through savings in transaction an interaction costs e.g. e-auctioning through a wider supply base  Time management frees up professional procurement time for strategic and creative aspects.eg use of ICT to facilitate offsite and mobile working and virtual team working.Cont’n  It is changing the way supply chains are organized and managed. Location is irrelevant  Technology offers opportunities for cost reduction.

safety.g. This is achieved through fewer cash transactions. less human interventions. You have up-to-date information for transaction processes. This is done by providing real time information for transaction processes. linked in  Technology reduces risk o fraud. creating Knowledge communities e. intentional miscalculations. controlled access to data systems . delivery tracking and other value adding services. Falsified records.Cont’n  Supporting development of SCM relationships.

Sourcing Definition of e-procurement  It’s a combined use of ICT through electronic means to enhance external and internal purchasing and supply management process  E-sourcing. Its used for processing and tools involved in using the internet to make decision and form strategies regarding how and where services or products are obtained.e-Procurement & e.  Activities under e-sourcing      Knowledge of need Specifications requests from quotations negotiations and evaluation contract .

Cont’n  Activities under e-procurement  Select and requisition  Authorize  Order  Receive  Payment .

Create e-specifications  Sourcing the market through e-sourcing tools  Purchase to pay and contract’s management .E-procurement tools  Identifying and defining needs through checking real time inventory and issue requisitions.

They are conducted on line using buyers or sellers web sites or third party auction sites  E-tendering.E-sourcing tools  E-catalogue. Using e-RFQs and specifications posted on line or email potential suppliers. . Its an online catalogue providing specification and price information  Supplier portals. Bids can also be received and evaluated electronically against pre-set criteria. These are sites where multiple buyers and sellers share information about requirements and offerings  E-auctions.

invoicing.P2P  Shorthand for ‘purchase to pay’ processes  is a process of ordering. expediting and payment using electronic means .

g.  Compatibility issues. network breakdown. If the system may not work with the other suppliers  security .Risks and costs of using IT  Increases fraud  High capital investment  High initial cost in training users  Costs in initial errors  Potential confusing of running the system  Reliability issues especially at early stages of development e. power failure etc.

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