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To "e" or not to "e" ? As you may be aware, Moravian recently began a Supply Chain Management concentration in the MBA program. The MBA/SCM program is a timely response to an increasingly challenging business environment for supply chain professionals in which supplying the right stuff at the right price at the right time to the right location is now recognized by many CEO's as integral to the profitability and earnings performance of their organization. A recent market research report identified improving supply chain visibility as the number one priority of supply chain executives. The report also found that improved visibility significantly contributed to reduced inventory levels and faster order-to-delivery times. An emerging complement to pure price savings and logistical prowess is the use of electronic procurement to drive additional savings throughout the supply chain by enabling "source-to-settlement" e-transaction process efficiencies. A recent study indicates that e-procurement has gone from hype to horror and now finally to acceptance and modest growth. A major stumbling block continues to be difficulty enticing suppliers to change, or invest in technology to enable supply chain e-transactions. While transaction fees incurred by using an e-marketplace can be a deterrent, a more significant obstacle for suppliers seems to be reluctance to transition existing back office business systems and processes to an e-procurement solution. The good news is that recent market research has uncovered a renaissance of interest in Internet-enabled e-procurement technologies that offer a more cost effective pragmatic approach for supplier (and buyer) supply chain organizations. For example, Enporion, Inc. www.enporion.com a leading global supply chain e-marketplace serving a variety of industries, offers a solution called Order Manager which allows buyers and suppliers to electronically send and receive transactions (purchase orders, acknowledgements, revisions, & invoices) by simply accessing the Enporion website through an Internet connection and browser. For many organizations, e-procurement has enabled users to reduce their reliance on inefficient manual, paper based processes freeing up precious resources for other needs. For example, electronic invoicing can significantly accelerate the invoice approval process time allowing more reliable payment performance and paving the way for discounted payment terms that enhance cash flow for the supplier and provide bottom line savings for the buyer. Some other benefits delivered by e-procurement are the enforcement of corporate controls that can enhance SOX compliance and reduce procurement outside established supply chain processes "maverick spend"; the use of e-catalogs that manage access to the number and type of suppliers and products desired; and, back-end robust reporting and analytical functionalities, such as spend management, that can facilitate the effectiveness of supply chain professionals. So, in answer to the question ..to "e" or not to "e" ..though e-procurement solutions took time to gain traction, the realization by suppliers and buyers that they're here to stay has never been clearer as evidenced by their adoption in over 65 percent of Fortune 1000 companies and almost 23 percent of organizations overall. Most users report they are satisfied with the benefits they are achieving from the e-procurement solutions they've implemented. Another finding to consider is that the key to the successful use of e-procurement solutions lies in leveraging the technology to meet established procurement objectives and strategies ..not trying to fit the business around a new solution. Richard J. Goch, MBA '90, CPM |