Why has E-procurement become the new way to go for raw materials?
E-procurement is a process to build a trustful and efficient system for any raw material procurement and services using unorthodox electronic means. It can be applied in any industry or organization that is looking for raw material procurement. The process manages the entire purchasing cycle from requisitioning through to delivery by transforming processes into information flows, reducing or eliminating paper-based manual processes, tracking progress with electronic data capture, and creating standardized contract templates.
How is E-procurement better than the old conventional process of raw material procurement?
This method is, in most cases, more efficient and has a better return on investment compared to the conventional process of procurement. It gives companies more flexibility in their sourcing strategy as they are not bound by geographical location, as is the case with conventional methods. This method also provides better visibility of the procurement process due to its sophisticated features. This transparency of the procurement process allows companies to track their sourcing requirements in real-time, thus reducing the costs of procuring raw materials from a single vendor.
Additionally, this method of raw material procurement makes it easier to manage suppliers. Companies can retrieve company history and statistics about a particular supplier and follow up on any relevant purchase orders. It reduces the time spent on sourcing materials and companies’ risk of low-quality raw material procurement.
Advantages of E-Procurement
Disintermediation
It allows buyers to cut out the middleman, which may reduce freight and other transaction costs.
Transparency
E-procurement environments provide real-time data access to all participants in a supply chain, making it possible to identify risks before becoming a problem. It can strengthen relationships between partners, reducing the overall cost of supply chain deliverables.
Speed
This method of raw material procurement allows buyers to take advantage of near real-time market opportunities and can significantly reduce the procurement cycle time. It also eliminates the need for buyers to send documents back and forth for signatures, which can mean weeks of lost time.
Integration
The Internet has become such a part of our daily lives that it has created an expectation of 24/7 access to information. E-procurement systems need to provide users with instant and secure access to information to be considered effective.
Visit OfBusiness for all raw materal:- www.ofbusiness.com
Cost savings
Aside from reducing the time and staffing needed for procurement, e-procurement may also result in cost savings. Companies using this method can often avoid the costs of printing, shipping, and handling physical documents.
Wrapping Up
Today, the industry has to deal with an aging workforce going out of the manufacturing / industrial sector. More and more companies are finding it difficult to fill their new roles in the production chain. The only way to survive in the market is by automating every process and making it more efficient.
E-procurement, i.e., online procurement, is considered as the new way to go for raw materials. It allows companies to carry out their operations from just about anywhere at any time, thus making them 24/7 ready.