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BUS 361: Chapter 8

BUS 361: Chapter 8. Eprocurement, Trading Exchanges & Auctions. Objectives. Explain the eprocurement process & why it is important in today’s business world Outline the major benefits of e- p and what types of goods are often procured

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BUS 361: Chapter 8

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  1. BUS 361: Chapter 8

    Eprocurement, Trading Exchanges & Auctions
  2. Objectives Explain the eprocurement process & why it is important in today’s business world Outline the major benefits of e-p and what types of goods are often procured Describe trading exchanges, the functions they perform & the issues they face Describe the different types of auctions, how they are carried out online & the process
  3. Eprocurement B2B and B2C All about cost cutting & improved efficiency Rapidly evolving as companies move to completely digital, integrated B2B or B2G
  4. The Process Need identified Product (or service) identified to fill the need Identified thru catalogue, online or … Identify a vendor Requisition created electronically Forward requisition to signing officer Who is the signing officer depends on $$ Purchase order transmitted to vendor Via EDI, secure channel … Order filled, transported Inventory updated, Invoice received (matched) Payment made
  5. Goods & Services Procured Traditionally Office supplies MRO Items Maintenance, Repair, Operating Then … Computers Corporate travel And Now Raw Materials & other inputs
  6. Approvals & more Approval limits Function of cost of delays Travel/hotel bookings Satisfied employees Dell’s Application Management pages or not Production items … concerns about quality, delivery, customization & terms
  7. Flashback to Buyer Behaviour Straight Re-buy Modified Re-buy New Purchase GUDBIP RFP’s & RFQ’s
  8. Benefits of Eprocurement Cost & Efficiency Faster order times, convenience, time savings Streamlining of internal processes Reduction in paper work and bureaucracy Strategic Procurement Long term relationships Supplier Relations Authorized Suppliers Fewer suppliers Maverick Buying
  9. Trading Exchanges e.g. http://www.thinkbarter.com/ A.K.A. hubs, e-hubs, marketplaces Can be vertical (industry focus) or horizontal (product or service focus) Private Exchange (specific buyers & sellers) Public Exchanges (like thinkbarter)
  10. Exchanges (2) Variety of offerings from brochures to full transaction integration & planning tools SAAS common offering Sort of an online “farmer’s market” Table 8.1 – long list of services offered Taxation Issues Profitability … membership fee? Governance … privacy/confidentiality
  11. Auctions English: (most common by far) American: price, quantity & earliest bid time Dutch: backwards… price drops and buyers bid on quantities as price drops. Reverse auction … Sealed Bid … Vickery … pay price of “last loser”
  12. Auction Issues Dynamic Pricing Reserve prices Full disclosure prior to auction Seller should have ERP integrated for shipping and pricing information. Important to buyer for shipping costs etc Up-to-date info available real time to all participants Security & Privacy Payment systems
  13. Some thoughts … Pre-registration needed? Can new players enter the auction? Scheduling (time zones) Demo of Process Length of Auction Evaluation of bids … when is it final? Settlement … signing the deal
  14. http://www.bcbid.gov.bc.ca/open.dll/welcome Email notification $100 a year Bidding rights $150 a year http://www.merx.com/English/NonMember.asp?WCE=Show&TAB=1&PORTAL=MERX&State=1&hcode=tAF08b5PaGBuUkl43CRDCg%3D%3D $16.95 month, $203.40 per year
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