As Russell Menere, I recommend the management of Boeing Australia Limited to follow the footsteps of Boeing Seattle to adopt and implement cost effective e-Procurement system, which can be interfaced with the legacy information system as we have IT infrastructure in place that is our core strength.
Through e-Procurement system we can improve redundancies in the business process and operations, gain in productivity by upgrading procurement processes. Cost savings by reducing processing time, rationalization of a large number of BAL suppliers and maintaining relationship with Key Suppliers.
Investing in an e-procurement system BAL would seek short term improvement tool that would simplify the procurement process across different division and support complex interfaces with suppliers. We can broaden our scope to include reverse auctions tool as well.
For e-Procurement systems at BAL the cost of system, its implementation support and maintenance is not mentioned. I would assume that the management has approved a reasonable amount for the cost of setup, implementation, training, interface and support of e-Procurement system with the BAL legacy system.
Assuming that the BAL key suppliers have no problems with the changes to the procurement processes.
Statement of issues
The main issue is processes. There are redundancies in the business process low productivity and high processing time in procurement processes, a large number of BAL suppliers and relationship with Key Suppliers is not maintained.
BAL is having budgetary constraints to invest in an expensive new system and set up complex interfaces within inter organization and with suppliers.
Existing legacy system is having large information system across the organization.
The Boeing Company’s vision is interpreted according to the organisation of the various divisions who are committed to the corporate vision by keeping customer as center of focus.
I need to assess the merits of implementing a sophisticated but economical e-Procurement system and reverse auctions tools to be uses by our key suppliers of Boeing Australia Limited, so as to gain productivity in procurement processes through cost savings by reducing processing time and rationalisation of a large number of suppliers, improving relationship with its key suppliers, to support the provision of services to its customers without changing the Boeing’s information legacy system.
As BAL grew their legacy information system also kept growing which supported internal communications and external dealings with customers. The need to upgrade the procurement system and processes to improve operations for gaining productivity through cost savings or by reducing processing time is sought. Refer the (Exhibit 1) the Balance Score Card of BAL in order to achieve corporate vision each division needs to fulfill their obligations by finding and executing their own work and reporting measuring criteria in financial dollars through procurement, customer, operations and learning perspectives.
I initiated to analyze BAL procurement process as it is having a great deal of short coming in terms of process and operational flaws. Procurement is the main source of flow of product and services carrying direct and indirect cost, through which an organization provides products and services to its end users (internal and external) A perfect economical system would help to carry out the day to day functions without duplication, reducing waste where by gaining productivity.
Adaptability with the legacy information system would not be an issues as per Klaus Sbresny, Manager, Management Information Systems who states “Boeing’s information systems helps us to execute our core business beyond our customer expectations” We have a strong IT infrastructure which will be the backbone and an enable for the implementation of the e-Procurement system at BAL....