Achieving Supply Chain Excellence through e-procurement: A case study approach of Infrastructure Industry.

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Achieving Supply Chain Excellence through
e-procurement A case study approach of
Infrastructure Industry.

• Presented By
• Neha Grover
• Asian Council of Logistics Management Research
  Scholar
• Dr. Rameshwar Dubey
• Assistant Professor-Logistics Supply Chain
  Management
• University of Petroleum Energy Studies,Dehradun
• 1st International Conference On
• Management of Technologies Information Security
• 21st-24th January,2010
• Venue
• IIIT Allahabad

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Agenda of Todays discussion

• Introduction
• Research objective
• Literature Review
• Research Methodology
• Conclusion
• Limitations and further scope of study
• References

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Introduction

• With the advent of internet, entire business
  turned into e-business. Today the use of
  e-business technologies to enhance supply chain
  efficiency is increasing in importance (Talluri
  et.al, 2006).Various e-business technologies are
  available that addresses the various need of
  e-procurement technologies that aims at
  streamlining and improving the purchasing
  function.
• E- collaboration is a part of e-business, and
  today a very influential aspect of collaboration
  between companies. E- collaboration is defined as
  business-to-business interactions facilitated by
  the internet (Johnson and Whang,2002).

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E-PROCUREMENT

• E-procurement refers to the use of the
  internet-based (integrated) information and
  communication technologies (ICTs) to carry out
  individual or all stages of the procurement
  process including search, sourcing, negotiation,
  ordering, receipt, and post-purchase review
  (Croom Brandon-Jones, 2004).
• While there are various forms of e-procurement
  that concentrate on one or many stages of the
  procurement process such as e-Tendering,
  e-Marketplace, e-Auction/Reverse Auction, and
  e-Catalogue/Purchasing, e-Procurement can be
  viewed more broadly as an end to end solution
  that integrates and streamlines many procurement
  processes throughout the organizations.

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Research Objective

• To identify CSFs (critical success factors)
  behind e-procurement implementation.

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Literature Review

• Here researchers divided literature review in
  three segments-
• Supply Chain Collaboration
• It relates to the process of planning,
  development, and working together to achieve a
  common goal (Shafritz et.al, 1998).
• Here collaboration in e-supply networks refers to
  the ways in which supply networks utilise the
  internet to facilitate coordination and
  collaboration among relevant parties
  (Hedaa,2000).
• Collaboration here comprises human collaboration
  and e-collaboration. Here collaborative supply
  chain focuses on joint planning and execution of
  supply chain activities (Ayers,2006).

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• E-business and supply chain management
• E-business is defined as the marriage between the
  Internet and Supply chain integration and is
  divided into three main categories
  e-procurement, e-commerce, and e- collaboration
  (Lee and Wang, 2001).
• E-Collaboration is defined as business-to-business
  interactions facilitated by the Internet. These
  interactions go beyond simple buy/sell
  transactions and may be better described as
  relationships.
• E-businesses must create networks with other
  firms in ways allowing both sides to benefit as
  much as possible. As the digital era is
  constantly witnessing massive changes,
  e-business, especially over the internet, should
  be considered increasingly difficult to sustain.
  These include such activities as information
  sharing and integration, decision sharing,
  process sharing, and resource sharing.

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• Collaborative Supply chain planning
• Firms wishing to adopt e-commerce in a supply
  chain need to invest time and money to adapt
  their internal processes and systems and develop
  the competence needed to handle new e-commerce
  challenges (Cassivi, 2006).
• A more detail method known as the collaborative,
  planning, forecasting and replenishment (CPFR) is
  use to sequentially define key actions to be
  taken. This paper also elaborate on the fact that
  companies that find themselves in a supply chain
  environment are often forced to innovate in order
  to compete in their sector.
• This change is driven by major suppliers and
  customers
• Process innovations,
• product innovations and
• relational innovations.

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Literature Review in context to developed
developing countries
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Critical success factors for the implementation
of collaborative environments for the Indian
Firms. 
Source Blismas et.al, 2004
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Research Methodology

• Case Study Method Case study research method as
  an empirical inquiry investigates a contemporary
  phenomenon within its real-life context,
  particularly when the boundaries between
  phenomenon and context are not clearly evident
  and when multiple sources of evidence are used
  (Yin, 1984).
• These case studies will be based on qualitative
  research methods where the perception of
  individuals will be the focus of the study, in
  naturally occurring situations.
• The identified key success factors for the
  implementation of collaborative environments for
  the Indian firms will be used as a benchmark in
  the case studies to identify key success factors
  for e-tendering implementations within
  collaborative environments.

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• The three case studies are construction projects
  undertaken in India. All the three organizations
  used the same collaborative environment
  e-procurement software.
• Case study 1 is conducted with a Simplex
  Infrastructure, using collaborative environments
  for procurement and project management. This
  organization is among the recent adopters of
  e-procurement in collaborative environments.
• Case study 2 is Multicon and consultant
• Case study 3 is a construction consultant team

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Case Study- 1 Simplex Infrastructure

• Incorporated in the year 1990 as a Public Limited
  Company.
• The Registered Office at Calcutta is controlling
  Project Sites all over India. In a decade of its
  working SPL has emerged as a renowned civil
  engineering and construction Company.
• The Company has procured a fleet of construction
  equipment over this period. This organization was
  among the earlier adopters of e-procurement in
  collaborative environments in India among premier
  Infrastructure companies.
• Interviews were conducted with the Project
  Manager, Project Quantity Surveyor and several
  clerks an observation of the organizations work
  progress was also carried out.

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• Resistance from employees was visible during the
  first three months of implementation,
• organization provided sufficient training,
  support and resources as part of the introduction
  scheme.
• The e-procurement system managed to cut down the
  number of manpower hours involved in the stages
  of estimating, tender enquiries and pre-contract
  negotiations.
• Less tedious paper-based work.
• providing better efficiency, higher quality of
  work and completion in a shorter time.
• The correspondence among project members shifted
  from traditional snail mail to e-mails and the
  collaborative environment system.

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Case Study-2 Multicon

• The Multicon flagship real estate business has
  achieved over 2.5 million Sq. ft. of prime space
  in the city of Kolkata.
• It holds substantial interest in Cablecomm, the
  largest reach MSO in the country and in a 100
  EOU Granite manufacturing unit. The Groups core
  business verticals are Real Estate, Media
  Internet Services, Exports, Travel Services,
  Financial Services and Supply Chain.
• This case was conducted with assistance from the
  Procurement manager, Project Quantity Surveyor
  and Assistant Project Manager.

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• The organization have just adopted the use of
  e-tendering, therefore it is using it on a
  project-by-project basis.
• The major change was the reduction of personnel
  throughout the project tasks which previously
  took 6 persons to complete, now only required
  three.
• This resulted in a significant reduction in cost,
  personnel management and work efficiency, with
  the additional requirement of IT competence.
• The system also provided audit trails and
  database back-ups for easy search and filing
  capabilities.
• This case study presents a scenario where the
  younger generation of construction professionals
  is dominant in an organization. Younger employees
  are more IT savvy.

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 Case Study -3 

• This organization is a consultancy firm and owes
  it success to over 100 expert employees.
• This organization has not fully implemented
  e-procurement it is only being rolled out on a
  project-by-project basis. Work process
  observation and interviews were conducted with
  the Procurement Manager, IT Manager, Assistant
  Quantity Surveyor and several administrative
  personnel.
• The organization does not have to endure
  large-scale people or process changes for
  rollout being a consultancy organization,
  employees do not require extensive use of the
  e-procurement system. Therefore, uptake of the
  system was easy.
• Resistance was minimal, less tedious paper work,
  higher work satisfaction, shorter working time
  and increased motivation.
• There was also no significant reduction in cost.
  It is also noted that the system did not yield a
  good return on investment for the organization. 

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ANALYSIS

• The case studies show that the e-procurement
  solution is welcome move in most of the selected
  firms.
• Employers have the perception that e-procurement
  made the tendering process less tedious and less
  costly as well as ensuring better control and
  management over the tender process. This enabled
  organizations to handle more jobs in a single
  timeframe when compared to the traditional method
  of procurement.
• One of the many good responses from users is
  attributed to the software itself, i.e. that it
  is designed with user-friendly features and
  demands very little computing knowledge to use
  the system efficiently.
• The basic set-up only needs internet access and
  a web browser.

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Potential critical
success factors for the people issue

• collaborative environment solution.

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CONCLUSION

• This study investigates the people and process
  critical success factors to successfully
  implement e-procurement in collaborative
  environments, with a specific focus on the
  Infrastructure Sector.
• In implementing e-procurement, perhaps the most
  important critical success factor is that all
  changes in the organization must be process-led,
  and not technology-led. Technology is mainly used
  to automate, simplify and secure the
  communication process among parties, in turn
  making the tendering process more efficient, less
  costly and more accurate.
• To achieve maximum benefit from e-procurement,
  organizations must be ready to adopt change,
  through self-evaluation and incorporating change
  management strategies. Organizations must also
  align their e-procurement implementation strategy
  with the project team strategy.

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• Potential critical success factors in
  implementing e-tendering for the industry include
  employee motivation, interest in IT, attitude and
  prior experience within collaborative
  environments.
• Organisations could adopt a measured approach
  in order to help them be e-ready the rubrics
  of which could be augmented through some form of
  a practical framework which allows them to
  measure their e-readiness.

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Limitations Further scope of the study

• The study is based on case studies, hence in
  future an empirical survey can be conducted to
  develop synthesis between case study findings and
  empirical survey.
• The study can further be carried out to study
  correlation among CSFs and develop regression
  model.

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