Current Purchasing and Supply Chain Practices in E-procurement Essay

Current Purchasing and Supply Chain Practices in E-procurement - Essay Example Indeed as e-commerce continues to gain root courtesy of the developments realized in Information and Communication Technology (ICT) it seems every single sector is being transformed. E-procurement therefore involves the use of Electronic Data Interchange and Enterprise Resource Planning. It is basically facilitated through the use of various software applications which enhance the process of supplier management and complex auctions. The value chain process of e-procurement consists of e-tendering, indent management, e-auctioning, catalogue management, order notice, e-invoicing, e-payment and contract management. It basically involves the conventional supply chain processes which are enhanced through the use of information systems. In public sector organizations, e-procurement is becoming a common affair given its increased benefits. Some of the benefits realized through e-procurement include increased efficiency and cost savings. Indeed, these have always been major concern in govern ment contracting. Similarly, e-procurement improves the transparency of the procurement process. Conventional procurement is normally characterized by rampant corruption especially in the public sector. A supply chain network enables the distribution options for the procurement of both raw material and finished products. In this regard, the major aim of a supply chain network is to satisfy the needs of the consumer as soon as they appear. This is certainly an important component of e-procurement (Ageshin, 2001). It should be realized that e-procurement is not simply a process of making online purchases. It must provide an open and effective communication line with all the potential suppliers throughout the business process (Waters, 2007). Research and New trends Businesses are today compelled to adapt and reconfigure their IT systems, assets and business operations in order to meet the increasingly changing demands of the customers. There is a growing need to compress the long busin ess cycles and to differentiate from the increased competition (2007). In this respect, new trends in e-procurement are constantly adopted with the major aim of enhancing operations through efficiency, costs reduction and output maximization. The systems are facilitated through the adoption of new architectural styles. The e-procurement and purchasing process involves the following steps (Dolgui, Soa, & Zaikin, 2005). Purchase approval and supplier evaluation The e-procurement supply chain process normally begins by the demand or need of the material by a user. In this respect, a number of electronic documents are normally used. They include forecasts and customer orders, purchase requisitions, stock checks and material requirements. The process of purchase approval involves a number of steps and will normally depend on the size of the purchase and whether the client is making first time purchases. Depending on the size of the purchase, there can be a need for supplier evaluation wh ich begins with from the determination of the purchase need (Forrest, 2006). Bidding and supplier selection The selection of suppliers is actually one of the most important activities in this respect. In any case, any mistakes or errors at this time can be very damaging and long-lasting. Once all the bids are received and the negotiation process has occurred, the sourcing team will then select an appropriate supplier and the approval is then authorized through the purchase approval step (Foust, 2013). Purchase approval Once the supplier has been selected, purchasing grants an authority or approval to purchase the product or service. This is facilitated through the use of an electronic drafting of a purchase order (PO). This is also