Electronic Procurement

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Electronic Procurement

• The Impact of the Internet on Supply Chains

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What is Procurement ?

• The process of obtaining materials and services
  and managing their inflow into organizations

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Phases of Procurement Activities

• Information
• Negotiation
• Settlement

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Phase 1 Information

• At this phase, prospective buyers identify their
  needs and evaluate sources to fulfill them

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Phase 2 Negotiation

• At this stage, buyers and sellers interact to
  determine transaction specifics such as price,
  volume, timing and delivery

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Phase 3 Settlement

• In this final phase of the procurement process,
  buyers and sellers finalize the contract terms,
  and the goods and services in question are
  exchanged for currency or other compensation

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Types of Procurement

• Procurement of Production Goods
• Procurement of Maintenance, Repair and Operating
  Goods
• Procurement of Capital Goods

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Example of Electronic Procurement US General
Services Administration
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Procurement Production Goods

• This activity involves the requisition of raw
  materials and other production goods
• Distinguishing feature
• high volume,high frequency, timely delivery

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Procurement Type Maintenance, Repair and
Operating Supplies

• This type of procurement deals with
  non-production implements required for routine
  upkeep of the organization, such as office
  supplies
• distinguishing feature
• low volume, high frequency

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Procurement Type Capital Goods

• This procurement type concerns the purchase of
  productive assets that are outside of the normal
  scope of production or operation
• distinguishing feature
• high cost, low frequency

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Internet Technology and its Impact on Procurement