Electronic Method for Selling and Purchasing - Assignment Example

?Ans e-Procurement is an electronic method for selling and/or purchasing goods. It includes the entire transaction process beginning from procurement and ends with the supplier’s invoice and payments. e-Procurement can take place business-to-business (B2B), business-to-consumer (B2C) or business-to-Government (B2G). The transactions are done with an ERP software package such as SAP AG or Oracle having a separate module for supplier management. Ans# 2: e-Procurement steps followed by SIEMEMS – a German multinational Company, which uses SAP AG: 1) Based on the project requirements, the Engg. Deptt. prepares a “Components List” 2) The components list is then forwarded to the Planning Deptt., which plans Product Codes (for new components, if any) and schedule reservation; 3) Thereafter the list is handed-over to the Purchase Deptt. for raising a Purchase Order (PO). In case of new requirements, three quotations are first obtained from different suppliers. Finally the PO is created, signed by two persons – i.e DGM Commercial and GM Technical and then delivered to the supplier. 4) Once goods are received, Inspection checks the quality of goods and if found ok, it hands-over to the Store, which makes a Goods Receipt (GR) upon receiving the goods 5) Planning then prepares a “Pick List” of the required components and gives it to Production for issuance of components from the Store. 6) Upon receipt of supplier’s invoice, items & amount charged are reconciled and then payments are made to the supplier. 7) The performance of Purchase Deptt. is checked through certain KPIs set by the Company while suppliers’ performance is analyzed by means of assigning different grading. Ans# 3: Three key advantages of using e-Procurement over manual processes: 1) Using e-Technology and an integrated ERP application, automates & speeds up business processes related to the production of goods and services. 2) It also serves as a tool in sourcing new suppliers and tendering bids whilst cutting down material cost 3) It ensures modernization which keeps your workplace up to date with the latest procurement/selling techniques. Ans# 4: Three critical process flows of e-Procurement system: 1) Data integrity: In case of error in a PO shall cause incorrect delivery/shipment. Therefore an extra care needs to be taken when preparing & submitting a PO to the supplier. 2) Availability: Ensuring availability of the required material is a critical part of e-Procurement, as the firm is committed to timely delivery of the finished goods to its customers. 3) Inventory Management: Being a fully integrated system, a small error has a large impact. For Instance, it could result in over-stocking or under-stocking of inventory or distracting inventories’ safety level, etc. Ans# 5: How EDI works? The diagram below shows a two-way nature of EDI. For example, if a customer/business partner wishes to place an order, it shall generate an electronic purchase order which shall automatically get transmitted and arrive into the company’s order management system indicating arrival of new order(s). Once the order is processed and goods delivered to the customer, company’s inventories position will be automatically updated. In a nutshell, from order processing till payment, relevant information through out the system shall get automatically updated at both sides (Customer & Vendor). Ans# 6: Business-to-employee requisitioning system benefits an employee in several ways. Many terms used in this context. Human Resource Management System (HRMS) or Shared Services Human Resource (SSHR) is the most commonly used term in business world. The system provides an online submission and approval of a requisition including viewing attendance, applying for leave, requesting a loan, seeking training, submitting Work Objectives or Appraisal, and much more. For example, if applying for a leave, an employee needs to fill-up an online leave form and click on “Submit” button. The application directly goes to the concerned supervisor under intimation to the sender. When the supervisor approves/disapproves the leave, it directly goes to the HR department for their functional approval and record under intimation to the sender. Ans# 7: Corporate procurement portals boost an organization procurement process in a variety of ways. For example submit POs to supplier in a portal that confirms receipt of orders, generates shipping documents, commercial invoices and packing list, generate invoices, etc. Similarly, manage your logistics with a portal that coordinates with respect to supplier’s load shipments. Ans# 8: Foreign exchange trading or forex trading refers to trading/exchange of currencies of different countries. For example trading US$ for Euros. Business Transactions, Speculation and Foreign Exchange Pricing are the reasons for this trading. This business has evolved over the years due to business expansion beyond a country’s boundaries, increased trade among countries and globalization. In this era of computers & technology-driven trading today, a trader can simply place an order through a computer and can freely trade from any corner of the world. Ans# 9: An industry lead consortium refers to forming an industry-specific association that seeks to promote the standards and specifications of the products. For example, “The W3C is an industry consortium which seeks to promote standards for the evolution of the Web and interoperability between WWW products by producing specifications and reference software”. Buyer Consortium: A group of or a unity among organizations, having the same goals, aimed to combine their purchase requirements, capital goods and services in a bid to get more competitive pricing and technology from the intended suppliers. Supplier Consortium: Same definition as stated above but from the Supplier’s perception. Ans# 10: e-Procurement Software applications: (1) SAP AG (2) Oracle (3) JD Edward Based on my investigation in Pakistan, I understand that SAP AG and Oracle are the ones competing with one another. However, SAP AG has a larger market share in manufacturing concerns while Oracle has a lesser market share in manufacturing but greater share in non-manufacturing side. JD Edward, having the least market share, is almost out of the market. Success factors of SAP AG and Oracle include presence of their Principal locally ensuring post-sales support & services. However, the selection of software application is also based on the purchase of no. of modules and the modifications required to suit the customer’s needs. Based on the market share and performance I recommend SAP AG for manufacturing and Oracle for non-manufacturing concerns. Read More