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COMM 226 E-procurement and Assignment 3

COMM 226 E-procurement and Assignment 3. Assignment 3: objectives. Give hands-on experience with procurement processes (PS&I Chapter 5) Show how procurement process can be implemented as an e-business activity (E-MIS Chapter 9)

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COMM 226 E-procurement and Assignment 3

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  1. COMM 226E-procurement and Assignment 3

  2. Assignment 3: objectives • Give hands-on experience with procurement processes (PS&I Chapter 5) • Show how procurement process can be implemented as an e-business activity (E-MIS Chapter 9) • Give hands-on experience in which students play roles of sale managers who want to secure a business contract • Show how to manage business transactions that require agreements on more attributes than the price only

  3. What is procurement? • Purchasing (buying) of goods, services or worksfrom external sources. • One of the support activities in Porter’s value chain • Great impact on organizations: on average, a procurement department manages over 60% of total enterprise expenditures (spending). • In procurement: One buyer interacts with one, two, or more sellers

  4. E-procurement • Supply chain management (SCM) systems include systems for buyers and sellers to meet and transact. • SCM and e-marketplaces have been designed by IBM (Websphere), Ariba, SAP (SRM), Oracle PeopleSoft, Hubwoo (eBuy), Capgemini (IBX), … • E-procurement allows for 8% to 32% savings on purchasing costs.

  5. E-procurement transactions Transactions can be conducted through the use of one of the following exchange mechanisms: • Catalogues (posted price) • Auctions • Negotiations

  6. Catalogues, auctions and negotiations • When are these mechanisms used? • Catalogues (posted price): simple goods, no competition, no savings • Auctions: goods are simple or of low complexity, sellers compete allowing the buyer to achieve big savings • Negotiations: goods are complex, many different attributes (e.g., quality, delivery, warranty) are as important as the price.

  7. Negotiations • In the past, negotiations required the parties to be present and the buyer could negotiate with only one seller at a time. • There are now algorithms and systems that allow negotiating with multiple sellers simultaneously. • One such algorithm was developed at the John Molson School of Business and implemented in the Imaras system (patent pending).

  8. E-procurement negotiation assignment • This assignment involves hands-on experience with a state-of-the-art e-procurement negotiation system. • The system allows a procurement manager (buyer) to negotiate with several sellers and award the contract to one of them. • You will be using the system playing the role of a sales manager and : Remember: You want to get a contract from the buyer, but so do the other sellers!

  9. Please remember • Sign up for the negotiation as soon as you can (it takes only 5 minutes). If you do not sign up by November 7 (or November 9 but with penalty), then you get 0 for this assignment. • Please note that this assignment is part of a research study. You are not required to participate. However, if you do not want to participate, you must inform me before November 9 or else you will get 0 for the assignment. • Read Assignment 3 carefully. • You play the role of a sales manager and want to get the contract for your firm. However, you do not need to get the contract to get full marks.

  10. Demo • To better acquaint you with the system you will see a demo. • Watch carefully because after the demo we are going to have a few clicker questions about it. • Video demonstration of the Imbins system http://invite.concordia.ca/imbins/demo_s.cfm

  11. Sources • These slides (with minor adaptations) were prepared by Professor Gregory Kersten, Director of the InterNeg Research Centre

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