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Chapter 7 E-Procurement

Chapter 7 E-Procurement. Learning Outcomes. Identify the benefits and risks of e-procurement Analyze procurement methods to evaluate cost savings Assess different options for integration of organizations’ information systems with e-procurement suppliers. Management Issues.

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Chapter 7 E-Procurement

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  1. Chapter 7E-Procurement

  2. Learning Outcomes Identify the benefits and risks ofe-procurement Analyze procurement methods to evaluate cost savings Assess different options for integration of organizations’ information systems with e-procurement suppliers.

  3. Management Issues What benefits and risks are associated with e-procurement? Which method(s) of e-procurement should we adopt? What organizational and technical issues are involved in introducing e-procurement?

  4. How Important Is Procurement? ‘We estimate that for every dollar a company earns in revenue, 50 cents to 55 cents is spent on indirect goods and services – things like office supplies and computer equipment. That half dollar represents an opportunity: By driving costs out of the purchasing process, companies can increase profits without having to sell more goods.’ Hildebrand (2002)

  5. The 5 Rights of E-Procurement at the right price delivered at the right time are of the right quality of the right quantity from the right source. Baily et al., 1994

  6. Figure 7.1 Key procurement activities within an organization

  7. Table 7.1 Process flow analysis for traditional procurement (typical cycle time, 51⁄2 days)

  8. Table 7.2 Process flow analysis for new procurement (typical cycle time, 11⁄2 days)

  9. Figure 7.3 Use of different information systems for different aspects of the fulfilment cycle

  10. Figure 7.4 The three main e-procurement model alternatives for buyers

  11. Figure 7.5 Integration between e-procurement systems and catalogue data

  12. Figure 7.6 Jack Ma, CEO Alibaba.comSource: FT.com

  13. Figure 7.7 Supplier route to government portal Source: www.supply2.gov.uk

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