Easy Source Procurement Intranet

With all the focus on eProcurement as a strategic tool for reinforcing sagging bottom lines, a specific area which as until recently not received due attention is indirect procurement.

Indirect procurement refers to the purchase of goods and services that do not contribute directly and include a vast range of goods and services ranging from staplers to personal computers and from security services to travel services.

Although typically indirect procurement forms the smaller portion of the spend as compared to direct purchases, this area of procurement is fraught with process inefficiencies. Aggravating matters is the fact that in indirect procurement, process costs are a high percentage of the total cost of acquiring these goods and services.

Typically indirect purchases are low value high transaction highly standardized purchases that are executed through a large and fragmented supplier base. A complex, paper based, unwieldy process, it leads to lengthy cycle times often prone to manual errors and rework, while relying on a fragmented supplier base through unstructured communication that is seldom documented.

The industry focus has clearly shifted to reduction in procurement costs through use of technology. This makes for an ideal business case for process optimization tools like catalog management. Electronic catalogs or eCatalogs are tools used to negate the myriad issues that govern the traditional, indirect procurement practice.

eCatalogs are intelligent business forms that house information on technical specifications, datasheets, and informative media formats, pricing information, business terms and information on availability regarding the products or services offered by the vendors of an organization.

Our proposition

Our catalog solution not only carries information about the suppliers' products but is also process enabled, to simulate the entire indirect procurement process from "Requirement to Cheque" in an electronic environment. Such features would include a robust and comprehensive workflow engine, purchase order approval and reconciliation module as well as fulfillment features that allow buyers and suppliers to collaborate in real time.

Procurement Intranet is ideal for indirect purchases and encompasses supplier selection, goods and services selection, requisitioning and approval and finally fulfillment. The various steps involved are:

1. Catalog creation - Creation of catalogs is possible both by the supplier as well as the buyer. Here, content from different sources is collated, categorized and customized.

2. Manage / Operate catalog - the supplier can update technical product information to make sure that buyers are accessing the most current information. He can also

• Configure prices, administer access rights
  
• Customize the catalog's appearance to your specifications as supplier.
  
• Update the catalog in case of price variations and ensure that the inventory reflected is the latest.

As buyer you can customize the catalog to ensure that you access the most frequently used products easily. You can also:

• Configure the catalog to ensure that the prices and business terms relevant to purchasing is on view.
  
• Update the catalog to reflect changes pertaining to business terms, prices or delivery requirements.
  
• Locate products or services of interest based on constraints set on parameters.

3. Compare / select products and services

• The catalog comparator allows you to compare equivalent products, based on all parameters to ensure a conscious buying decision.
  
• You are allowed to complete a primary selection of products of interest. Then you can compare and select what you want to purchase. Shopping baskets can be recalled in case you want to complete the transaction at a later date.
  

4. Purchase order approval - The contents of the shopping basket are checked for conformance to the rules and relevant communication is relayed to suppliers through the Web. Instant processing is possible during emergencies.

5. Fulfillment - Requests can be tracked, supplier delivery status be checked, invoices be validated and material acceptance by you is posted.

6. Payments - payments are checked whether accurate after which the receipt of payment is accepted.

Key benefits

Our electronic catalogs have been observed to influence two major areas through:

Costs:
1. Considerable reduction in transaction and administrative costs

2. Eliminating off-contract buying and improvement in contract compliance

3. Reduction in process throughput time from requisition to fulfillment resulting in inventory optimization

4. Increased ability to track, aggregate and leverage corporate spend to drive down purchase prices

5. Better vendor performance measurements leading to redirecting major spend to better performing vendors, thus reducing total cost of ownership

Efficiency:
1. Centrally hosted catalogs, with leveraged prices and pre-negotiated terms, foster decentralized and empowered buying by all users relieving core purchasers, to transfer focus onto more strategic tasks

2. Automation of search, requisition, approval and fulfillment processes reduces the engagement time of key buyers in tactical tasks

3. Automation of the entire process results in reduction of throughput time, better productivity and improved service

4. Sequential porting of reusable data from one business form to another results in decreased manual intervention and hence fewer manual errors. This results in less rework and in turn costs of rework

5. Enhanced business information facilities multidimensional reporting and analysis that leads to improved process and practice