As Russell Menere, I recommend the management of Boeing Australia Limited to follow the footsteps of Boeing US 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.
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. A list of possible barriers is as listed below
Barriers to e-procurement
•Upper Management Support / Lack of Leadership
•Other Competing Initiatives
•Resistance to change
•Lack of a widely accepted solution
•Magnitude of Change
•Complicated procedures and...