E-Procurement Tools

Topics: Supply chain management, Procurement, Auction Pages: 5 (1524 words) Published: June 10, 2011
There are a large number of E-procurement tools that could be distinguished in the marketplace (de Boer et al., 2001). Some of them are already well developed and highly accepted in the marketplace; nonetheless, there are numerous E-procurement tools that are immature and require further development (Wang, 2006). For the purpose for this paper, we aim to focus on the E-procurement tools that are widely accepted in the government and private sectors. The four most common E-procurement tools being used consist of E-Sourcing, E-Tendering, E-Reverse Auction and E-Collaboration (Boer et. al., 2001). The description of the four E-procurement tools would be provided, following by comprehensive explanations and visual diagrams to demonstrate how the four E-procurement tools work in an organization. E-Sourcing

E-Sourcing is the process that most buying companies use to search for a list of new or potential suppliers by using the Internet in general, or more specifically in a Business-to-Business marketplace (de Boer et. al., 2001). In most situation, the B2B marketplace is an Internet-based software which developed and controlled by third parties, that are usually the supply and demand chain solution providers, to assist the purchasing company to search for suitable suppliers on the Internet. Diagram 1.1. provides a snapshot of the E-Sourcing process. Supplier A

Diagram 1.1. E-Sourcing Process
Purchasing Company
Supplier D

Internet-based B2B Marketplace

Supplier B

Supplier E
Supplier C

Supply Chain Software Provider

According to Agentrics (http://www.agentrics.com), one of the largest supply chain software provider globally, E-Sourcing process typically consists of three steps. To implement E-Sourcing function, the purchasing company first has to collaborate with a supply chain software provider, that has the Internet-based B2B marketplace developed and readily to be used. The second step is that the new potential suppliers can either be formally invited by the purchasing company to participate in using the E-Sourcing function or the suppliers can sign up onto the E-Sourcing function by themselves as this could be a proactive method of exposing the firm to new potential customers (http://www.agentrics.com/web/agentrics/supplier_registry). The third and last step in E-Sourcing process is when the purchasing company is searching for a specific type of products and goods, the registered suppliers that meet the product criteria and specification will receive notification of the business opportunities through the Internet-based B2B marketplace. E-Tendering

E-Tendering is the process of using the Internet technology to send Request for Information (RFI) and Request for Price (RFP) to suppliers and receiving responses (Knudsen, 2003). Diagram 1.2. depicts the process of E-Tendering between purchasing company and suppliers. Diagram 1.2. E-Tendering Process

Send RFI and RFP
Send RFI and RFP

Purchasing Company
Internet Based B2B Marketplace

Price Quotes and Information
Price Quotes and Information

Supply Chain Software Provider

Request for Information (RFI) is a method used to collect general information about suppliers (Maersk, 2011). The collected information can further be used to shortlist suppliers. Request for Pricing (RFP), on the other hand, is used to collect pricing quotes from suppliers (Maersk, 2011). Generally, the quotations proposed by suppliers are confidential and do not make known to the public until the bidding process is completed when a winner is selected (Agentrics, 2011). On the other hand, E-Tendering allows purchasing company to conduct analysis and make comparison on the price quoted by different suppliers. When the purchasing company is making comparison, it does not necessarily mean that the supplier with the lowest bid will be the winner. Other selection criteria such as product and service quality, reputation and past experience will also be taken into...
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