Advantages of E-Procurement
The process of sourcing products online, also known as e-sourcing or e-procurement, is a proven way for businesses and business owners to save money while at the same time improving the efficiency of their supply chains.
From the smallest businesses to the largest enterprises, virtually ever business can benefit from this proven strategy.
The advantages of e-procurement are many, and they include:
1. Greater Productivity
A solid e-procurement strategy can help businesses cut out a lot of the waste and inefficiency that can raise costs and increase lead times.
Those businesses who use e-procurement can eliminate the time that would be wasted placing orders by telephone or mail, as well as the time required to follow up on those orders manually.
While phone orders can take half an hour or more and mail orders can take days or even weeks, online orders can be placed in a matter of seconds.
2. Increased Control
E-procurement also can provide a much greater degree of control than traditional methods of ordering.
All of the information about online purchasing is centralized in the e-procurement environment, providing the business owner and management team with a greater degree of control.
In addition, this control can help to reduce common supply problems, including pricing mistakes, order duplication, inventory shortages, inventory excesses and order omissions.
3. Better Buying Power
E-procurement also allows businesses and business owners to better maintain data and more easily manage their relationship with suppliers.
This information can help businesses negotiate better volume discounts and more effectively leverage their buying power.
E-procurement also gives businesses the power to more easily consolidate their purchases, resulting in still greater buying power and lower overall costs.
4. Just-in-Time Inventory Management
Many companies have discovered the power of just-in-time inventory management, and e-procurement helps to make this powerful strategy possible.
The process of sourcing materials and supplies online helps to facilitate the supplier relationships that drive just-in-time inventory management.
5. Greater Accuracy
E-procurement can also help to greatly reduce the mistakes and human error that can result from traditional manual ordering systems. E-procurement can result in fewer missing orders, less order duplication and an overall greater efficiency.
In addition to all these benefits, the good news is that an e-procurement system can be started slowly, without the need to implement a potentially expensive solution all at once.
It is possible to use various parts of the e-procurement strategy, and to implement only those parts that make sense for your own business.
For instance, starting an e-procurement system can be started with your most pressing bottlenecks to slowing efficiencies in your current operations.
Simply using email and spreadsheets to negotiate orders placed by the business can be a lurking bottleneck that is often overlooked because it was the standard procedure for decades. One of the quickest ROI opportunities in e-procurement is getting off email and spreadsheets to a centrally controlled database, where there is a single source of truth, clear lines of accountability and permission based access.
Once your operations have fully exited the inefficient email/spreadsheet back-and-forth-forward-scramble, a plethora of opportunities open up for you organization to take advantage of incremental efficiencies unleashed by the power of digital transformation.
For example, the ability to easily and quickly check with various vendors is in fact one of the most powerful features of e-procurement, and one of the best reasons for businesses to implement such a strategy.
Integrating your supplier network enables real time reporting and comparison amongst vendors; there is no better way to increase the potential pool of suppliers and have the upper hand hand when negotiating on highly competitive items.
The real time ability to compare prices and lead times is one of the best and most effective parts of implementing an e-procurement strategy that works better than the traditional and outmoded excel and email based back and forth.
Don't Get Left Behind
Schedule a free consultation with Visichain to ensure your supply chain and procurement operations continue to evolve and remain competitive in today's dynamic environment.