PURCHASING PROCEDURES AND E-PROCUREMENTS

Organizations are beginning to re-evaluate their purchasing processes, and identify new types of e-procurement tools that will meet their needs purchasing process, and identify discrepancies in the process that may exist.

1.    Identify or anticipate material or service needs.

2.    Evaluate potential suppliers.

3.    Select suppliers.

4.    Release and receive purchase requirements.

Continuously measure and manage supplier performance

A document flow accompanies the movement of orders and material throughput the purchasing process. Most firms have streamlined the document flow process to reduce the paperwork and handling required for each purchase. The suite of tools used to achieve efficiency in purchasing transactions is broadly defined as “e-procurement. The benefits of electronically generating and transmitting purchasing-related documents include

•           A virtual elimination of paperwork and paperwork handling

•           A reduction in the time between need recognition and the release and receipt of an order

•           Improved communication both within the company and with suppliers

•           A reduction in errors

•           Lower overhead costs in the purchasing area

•          Purchasing personnel spend less time on processing of purchase orders and invoices, and    more time on strategic value-added purchasing activities.

Objectives of Purchasing procedures and E-Procurement

1. To identify the steps in the conventional purchasing cycle.

2. To understand the differences between buying and purchasing.

3. To identify the main activities of a typical purchasing department.

4. To identify routine versus non routine purchasing/buying methods.

5. To identify technical requirements for e-purchasing.

6. To identify the differences between EDI and e-purchasing.

7. To introduce the RFID technology.

E-PROCUREMENTS

The term "e-Procurement" (for Electronic Procurement, sometimes written procurement) refers to the use of new technologies to automate and optimize the purchasing function of the company.

The term refers to a B2B exchange, i.e. a transaction between two companies, which allows a buyer to consult the product catalogue of a seller online and to directly place orders according to a well-defined purchasing workflow. Thanks to e-procurement, the process of requesting estimates, issuing a purchase order and billing is handled electronically and in a centralized manner at the level of the two enterprises, which makes it possible to shorten the ordering and delivery times while simplifying the purchasing process. Overall, e-procurement therefore makes it possible to cut cost and improve handling of purchasing matters.