e-Procurement
Electronic procurement is the use of the internet or other computer network technology to source (known or unknown) suppliers and order or purchase goods and services electronically. It may include the provision of electronic catalogues or price-comparison software to enhance the sourcing and purchasing process.
Components of e-Procurement via the internet may include any of the following:
- Identifying new suppliers within certain categories
- Sending requests for pricing or quotations and receiving responses
- Gathering, distributing, and storing purchasing information
- Creating and approving purchase orders
- Automated replenishment of inventory
- Creation of buying communities
- Vendor and contract management
By automating the above processes e-Procurement technologies enable companies to streamline their purchasing activity, confirm the integrity of suppliers, facilitate access to stored documents and ensure they are getting the best pricing for products and services.
E-Procurement may also be facilitated directly between trading partners through the electronic data exchange (via transfer of files in an agreed format) of product catalogues, orders, order responses/changes/cancellations, approvals and shipping information. Generally these are fully integrated end to end exchanges where the order data becomes the basis for the electronic invoice in the supplier’s ERP system which is transmitted back to the buyer and matched electronically to the purchase order in the receiver’s ERP system. In many cases, the same invoice data is also the basis for the electronic payment.
The benefits of this type of full lifecycle exchange are realised in the elimination of the re-keying of orders by the supplier resulting in the reduction in incorrect shipments, elimination of re-keying of invoice and payment data and subsequent reduction in errors and manual processing costs. Turnaround times are significantly improved as are customer/supplier relations and integrity of the supply chain.
