In the era of modern electronic economy tools, traditional procurement is beginning to be perceived as inefficient, mainly due to:
• the necessity of performing many repetitive office tasks that do not add value to the company
• the need to generate excessive documentation; at least 7 documents are associated with a new order (requisition, request for quotation, order, order confirmation, advice note, goods receipt note, invoice), which must be processed, copied, and stored
• extended lead times for individual order activities, both within the company and externally
• consequently, the execution of the aforementioned activities generates excessive costs.
Modern electronic procurement systems are the answer to these factors of inefficiency in the traditional procurement process.
Definition of e-procurement
E-procurement is the electronic integration and management of all activities related to the procurement process based on system solutions that enable effective cooperation between the buyer and their suppliers. It does not constitute a group of separate activities carried out electronically or using a computer. It is a unified IT system that covers the entire procurement process in its functional scope: from requisition, through, among others, request for quotation, authorization, ordering, delivery, to verification and payment by the buyer to their suppliers. In some sources, an even broader definition of e-procurement can be found.
The definition cited above refers to supporting the strictly purchasing process with information technology. A broader approach to the area of electronic procurement also includes additional tools supporting processes preceding the purchasing process, which are classified in the group of e-sourcing tools. This broader approach considers electronic procurement as a closed-loop purchasing concept, within which pre-purchasing activities and purchasing processes are defined.
Tools used in the e-sourcing area help the buyer establish the best contracts with suppliers and manage them effectively. These tools include, among others, supplier catalogs, electronic bidding tools, and tools supporting the evaluation, cooperation, and negotiation with suppliers. This group of tools also includes electronic auctions and those that support contract management activities. Particular attention should be paid to the subject of electronic auctions, the use of which contributes significantly to achieving savings in the procurement process. An e-auction is a tool available via the Internet, used for price negotiation in the case of selling or purchasing specific products or services. An electronic auction used in the case of selling products or services is called a forward auction and is usually used in the case of selling off surplus equipment and goods used by the company. A more common type of auction used by companies when purchasing products or services is the reverse auction. During this type of auction, the company invites various suppliers of specific goods or services to “compete” electronically for the order. The goal of the auction is to obtain the lowest possible costs for purchasing specific products or services.
The article comes from the magazine “Logistyka” 5/2007.