Three Uses Of Automation Within Supply Chain 4.0

The increased availability of advanced technologies has revolutionized the traditional supply chain model. Supply Chain 4.0 responds to modern customer expectations by relying heavily on the Internet of Things (IoT), advanced robotics, big data analytics, and blockchain. These tools enable automation and thus give organizations a chance to close information gaps and optimally match supply and demand.

Industry giants like Netflix, Tesla, UPS, Amazon, and Microsoft rely heavily on automation within their supply chain to lead their respective industries. Let us take a closer look at three powerful automation use cases.

1. Managing demand uncertainty

A painful aspect of supply chain ecosystems is the demand uncertainty and the inability to accurately forecast demand. Generally, this leads to a set of performance issues, from increased operational cost to excess inventory and suboptimal production capacity. Automation tools can forecast demand, remove uncertainty from the equation, and thus improve operational efficiency at each step along the supply chain.

Big data analytics is an established tool that helps organizations manage demand uncertainty. It consists of data collection & aggregation infrastructure combined with powerful ML algorithms, designed to forecast demand based on historical (or even real-time) data. Modern storage solutions (such as data lakes) make it possible to aggregate data from a variety of sources: market trends, competitor information, and consumer preferences. 

Machine learning(ML) algorithms continually analyze this rich data to find new patterns, improve the accuracy of demand forecasting, and enhance operational efficiency. This is the recipe that Amazon uses to predict demand for a product before it is purchased and stocked in their warehouse. By examining tweets and posts on websites and social media, they understand customer sentiments about products and have a data-based way to model demand uncertainty. 

The good news is that such powerful analytics tools are not restricted to industry giants anymore. Out-of-the-box solutions (such as Amazon Forecast) make such capabilities widely available to all organizations that wish to handle demand uncertainty. 

2. Managing process uncertainties

Organizations operating in today’s supply chain industry need to handle increasingly complex logistic processes. The competitive environment, together with ever-increasing customer expectations make it imperative to minimize uncertainties across all areas of supply chain management

3. Synchronization among supply chain partners and customers

Digital supply chains are characterized by synchronization among hundreds of departments, vendors, suppliers, and customers. In order to orchestrate activities all the way from planning to execution, supply chains require information to be collected, analyzed, and utilized in real-time. A sure way to achieve a fully synchronized supply chain is to leverage the power of automation. 

source:
https://www.unite.ai/three-uses-of-automation-within-supply-chain-4-0/


Northvolt becomes 3rd battery cell supplier to BMW

The BMW Group has signed a long-term supply contract for battery cells with the Swedish company Northvolt. The deal is worth two billion euros. Northvolt will start manufacturing the cells in 2024 in its Gigafactory in Skellefteå, currently under construction.

The Swedish company is already the third supplier to the Munich company after CATL and Samsung SDI. For BMW, the multi-supplier strategy is to establish global competition within the Group’s network, according to press information. Andreas Wendt, member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network, explains this way, they ensure “we always have access to the best possible cell technology”.

BMW said nothing about the term of the contract with Northvolt, which also supplies Volkswagen. The Nortvolt-Volkswagen deal sees them building a cell factory in Salzgitter at the moment. BMW, however, only assembles the batteries for its electric vehicles at its facilities in Germany, China, the US and Thailand, but buys the cells from said partners.

source: www.electrive.com

How Procurement Can Help Reduce Supply Chain Risk

The modern supply chain is facing some unprecedented challenges right now, and procurement is in a prime position to be able to help solve some of these issues while also reducing overall supply chain risk for their organizations. In “Risk, resilience, and rebalancing in global value chains, McKinsey Global Institute covers a lot of ground on the supply chain risk front, but also singles out a few key realities that companies are facing and the steps they can take to mitigate risk.

After analyzing 23 different industry value chains to assess their exposure to specific types of shocks, the research firm found that supply chain “shock” varies according to industry. Aerospace and semiconductors, for example, are susceptible to cyberattacks and trade disputes, because of their high level of digitization, R&D, capital intensity and exposure to digital data flows.

Some of the key procurement-related findings in McKinsey’s report include:

  • Shocks inevitably seem to exploit the weak spots within broader value chains and specific companies. “An organization’s supply chain operations can be a source of vulnerability or resilience,” it points out, “depending on its effectiveness in monitoring risk, implementing mitigation strategies, and establishing business continuity plans.”
  • Some of these vulnerabilities are inherent to a given industry; the perishability of food and agricultural products, for example, means that the associated value chains are highly vulnerable to delivery delays and spoilage.
  • Industries with unpredictable, seasonal and cyclical demand also face particular challenges. Makers of electronics must adapt to relatively short product lifecycles, and they cannot afford to miss spikes in consumer spending during limited holiday windows.
  • Other vulnerabilities are the consequence of intentional decisions, such as how much inventory a company chooses to carry, the complexity of its product portfolio, the number of unique SKUs in its supply chain, and the amount of debt or insurance it carries. Changing these decisions can reduce—or increase—vulnerability to shocks.
  • Companies’ supplier networks vary in ways that can shape their vulnerability. For example, spending concentrated among just a few suppliers may make it easier to manage them, but it also heightens vulnerability should anything happen to them.

Complexity isn’t a Weakness

Buyers should also understand that supply chain vulnerabilities often stem from the structure of supplier networks in a given value chain. “Complexity itself is not necessarily a weakness to the extent that it provides companies with redundancies and flexibility,” McKinsey points out, “But sometimes the balance can tip. Complex networks may become opaque, obscuring vulnerabilities and interdependencies.”

For example, a large, multinational company may procure goods from hundreds of different tier-one suppliers. Each of those tier-one suppliers in turn can rely on hundreds of tier-two suppliers. “The entire supplier ecosystem associated with a large company can encompass tens of thousands of companies around the world when the deepest tiers are included,” McKinsey points out.

Finally, the number of tiers of participating suppliers can hinder visibility and make it difficult to spot emergent risks. As a result, “suppliers that are dependent on a single customer can cause issues when demand shocks cascade through a value chain,” the firm notes.

Improving Resilience

On a positive note, McKinsey says that 93% of supply chain leaders are currently taking steps to make their supply chains more resilient. Some of the strategies they’re using include:

  • Building in redundancy across suppliers
  • Nearshoring their manufacturing operations
  • Reducing the number of unique parts that they use to build their products
  • Regionalizing their supply chains

“Most companies are still in the early stages of their efforts to connect the entire value chain with a seamless flow of data,” says McKinsey, which sees digital as a vehicle that can deliver “major benefits to efficiency and transparency that are yet to be fully realized.”

source: https://www.sourcetoday.com/

Lego is making 13,000 face visors

Denmark-based toymaker Lego recently announced on Instagram that it had begun producing protective visors for front-line healthcare workers in its home country.

The company has modified some of its molding machines to manufacture Personal Protective Equipment (PPE).

This week we began to make visors at our factory in Billund for healthcare workers on the frontline in Denmark,” the company said. “We are so incredibly proud of the team who made this happen.”

The visors have a simple design, which was drafted out by Lego employees with the help of representatives from Denmark’s healthcare sector.

source
https://www.businessinsider.com/lego-goggles-protective-a-day-for-coronavirus-outbreak-ppe-2020-4

Satın alma için yıllık tasarruf hedefi

Birçok satın alma organizasyonu, yılın ikinci yarısı başlayınca aynı meydan okumayla karşı
karşıyadır. Mali yıl başında hedefler  zaman içerisinde değişti. Ekibiniz çoklu projelerde gayretle
çalışıyor ancak gecikmeler yaşanıyor ve sonuç olarak yıllık  tasarruf hedefleriniz geride kalıyor.
Sonuçlarını hızlandırmanın yanı sıra, genel operasyonunuzu yıllık tasarruf ve uygunluk
hedefleriniz doğrultusunda yöneterek, bu geciken projelerle ilgili boşlukları doldurmanın bir
yolunu bulmaya  ihtiyacınız var.
Doğru tasarrufflar  için en kolay yol,  kategorileri iyi  tanımlamaktır. Hangi ürün gruplarının kısa
vadeli tasarruf için doğru  kaynaklara sahip olduğunu bulmanız gerekmektedir. Bu ürün grupları
için E-ihale  oluşturabilirsiniz.
Hızlı bir şekilde tassarruf elde etmenizi sağlayabilecek kategoriler;
Hizmet Anlaşmaları=  Servis,Yemek, Temizlik ve güvenlik  hizmetleri için
 
İnşaat ve Onarım = İndirekt malzemeler, Yeniden yapılan bakım, onarım çalışmaları,Mühendislik hizmetleri
Pazarlama Malzemeleri = Broşürler, promosyon ürünleri, baskı
Telekom ve Elektrik malzemeleri= Şirket içi telefon harcamaları
Nakliye  ve Ulaşım = Kara, deniz ve hava dahil
Bu ve buna benzer  kategorilere  öncelik vererek tasarruflarınızı  hızlandırabilir ve yıllık tasarruf
hedefinize ulaşmak için bir araç olarak kullanabilirsiniz.

E-ihale Sonuçlarını üst düzeye çıkarmak

E-ihale’nin  tutarlı ve anlamlı tasarruf sağlaması 1990’ların sonundan bu yana ortalama %10-12 lik tasarruf oranları ile kanıtlanmıştır.

Bununla birlikte, bu tasarruflar “gerçekleşmiyor” değildir ve sonuçlar  e-ihalenin  nasıl yürütüleceğine göre değişir. En iyi tasarrufu yakalamak için,e-satınalma sürecini dikkatli bir şekilde seçmeniz, hazırlamanız ve yürütmeniz gerekir.

E-ihale  sonuçlarınızı en üst düzeye çıkarmak için  aşağıdaki  faktörlere dikkat etmek  gerekir,

Daha fazla tedarikçi= daha fazla tasarruf sağlaması

Doğru açık arttırma biçiminin seçimi

Tedarikçilerin E-ihale sistemi konusunda bilgilendirilmesi

Tedarikçilere doğru hedeflerin verilmesi

1. Daha fazla tedarikçi= daha fazla tasarruf sağlaması:

Açık eksiltme ve açık arttırma için tedarikçilerin sayısı önemlidir. Açık artırmalar ya da eksiltmeler için tasarruf oranı eklenen her ek katılımcı için yaklaşık 1 puan artmaktadır. Davet edilen tedarikçilerin yaklaşık % 60’ı etkinliğe gerçekten katıldığından, etkinliğinize doğru sayıda nitelikli firmatı davet ettiğinizden emin olun. Bunun, açık eksiltme ve açık arttırma  için geçerli olduğunu, ancak Dutch  ve Japon gibi diğer ihale  türlerini kapsamadığını belirtmek önemlidir . 

2. Doğru  ihale biçimini seçin:

E-ihaleler, 1990’ların sonlarında  bu yana uzun bir yol kat etti. Şimdi  Dutch, Japan  ve diğerlerini içeren birçok etkinlik biçimi seçeneğiniz var. Bir örnek olarak, daha az sayıda nitelikli isteklinin bulunması durumunda Japon ve Dutch  açık eksiltmelerini kullanarak, doğru durumlarda duruma göre anlamlı iyileştirilmiş sonuçlar elde edebilirsiniz. Bu nedenle, önceden nitelikli tedarikçileriniz arasındaki rekabetçi durumun   analizini yapmak ve ihale  için doğru stratejiyi tanımlamak ve seçmek için ne kadar aktif katılımcı olacağını bilmek önemlidir .Sonunda bu sizin tasarruf oranınızı etkileyebilir.

3.Tedarikçilerin E-ihale sistemi konusunda bilgilendirilmesi:

Süreç ve teknoloji konsunda bilgisi olan tedarikçiler   daha fazla katılım gösterebilmektedir. Daha faal katılımcıların  sonuçlarını daha iyi bir şekilde yönebildiklerini göstermektedir. Her bir satırdaki tekliflerin sayısı arttıkça, etkinlikten elde edilen toplam tasarruf da artar.İhale sonuçlarını en üst düzeye çıkarmak için tedarikçiyi  önceden hazırlamak ve eğitmek başarlı bir ihale ile için gereken ön şartlardan bir tanesidir.

4. Tedarikçilere doğru hedeflerin verilmesi:

E-ihale sürecinde , zaten teklif sahiplerini belirlediniz   belki de mevcut tedarik tabanınızdan tedarikçileriniz seçtiniz. Tedarikçiler ne kadar çok  satın alma sürecine   hazırlanabilirse,fiyat konusunda daha kesin ve doğru rakamlara ulaşabilirler.

E-ihale tarihinden önce gerekli dökümanların tedarikçilerle paylaşılması,

Tedarikçilere  satın alma ihalesini  detaylarıyla anlatmak,  (telefon görüşmesi veya toplantı gerçekleştirmek)

Tüm teklif sahiplerinin aynı bilgiye,dökümanlara  sahip olmasını sağlamak

Bu uygulamaların çoğu iyi  bir sonuç alabilmek için gereklidir ama firmalarn zaman  ayırmaları gerekmektedir. Bu uygulamalar daha iyi bir e-ihale sürecine katkıda bulunurken, iyi bir e-ihalenin iyi bir tedarikçi bulmak ile başladığını unutmamak önemlidir. Ayrıca detaylı şartnamelere, rekabetçi bir tedarik havuzuna  ve tedarikçi teklifini teşvik edecek özenle seçilmiş bir kategoriye sahip olmalısınız.

Nakliye ve Lojistik alanında E-ihale Kullanımı

E-ihale sisteminin istatistiklerinde  gösterildiği gibi, Nakliye ve lojistik alanında e-ihale hacminin ve tasarrufların arttığı görülüyor.

Nakliye ve lojistik e-ihale için uygun bir kategoridir.

Veri yoğun ihale

Standartlaştırılmış ürün açıklamaları

Büyük ve rekabetçi tedarikçi havuzu

Nakliye ve lojistik   e-ihale  için uygun olmadığının düşünülmesi lojistik kaynakların sıklıkla stratejik satın alma  departmanı tarafından yönetilmemesi ve E-ihale sürecine  daha basit kategorilerle başlamasının istediği gerçeğine dayanmaktadır.

Bununla birlikte, e-ihale platformları ihtiyacınız olan tüm karmaşıklığı halledebilir ve lojistik harcamalarınızı bu şekilde yönetebilirsiniz.

Lojistik harcamaları için , E-satınalmanın  gittikçe artan bir şekilde benimsenmesinin anahtarı, platformun büyük miktarda veriyi işleme kabiliyetine sahip olmasıdır. Lojistik teklifleri doğası gereği birçok gereklilik, kaynak / varış noktası detayları yüzünden karmaşıktır. Büyük miktarda veriyi kolayca toplamak, organize etmek ve değerlendirmek ve kararları desteklemek için kullanabileceğiniz bilgilere dönüştürmenizi sağlar.

Büyük ölçekli çerçeve anlaşmalarının yerine getirilmesi genellikle iyi olsa da, sıklıkla nakliye ihtiyaçlarınızı karşılamak için spot anlaşmalar yapmanız gerekecektir. Müşterilerimizin çoğu, spot müzakereleri yapmak için e-ihale kullanmaktadır.

Bir e-satınalma  platformunun lojistik harcamaları için kullanmanın en önemli avantajlarından biri,  hem spot satın alımlar hem de düzenli olarak planlanan ihtiyaçlar için gerektiği gibi yenilemek ve tekrar etmektir.

Genelde firmaların Nakliye ve lojistik alanında  çok büyük harcama yaptığı göz önüne alındığında, Tasarruflardan yararlanmak için e-ihale sistemini deneyebilirsiniz.

Global or Local Sourcing

Strategic sourcing has become an extremely important element to the growth of any company. In order to stay competitive, companies need to constantly ensure the right level of coordination between innovation, organisational efficiency, price policy and procurement.

There appears to be a growing trend towards global sourcing; companies are constantly seeking to find the next low cost procurement option in order to gain an advantage over its competitors.

However there is a second narrative; local sourcing. Recently, more and more arguments are springing up about the immense benefits associated with sourcing locally. This narrative therefore begs the question; is local sourcing not the better option?

We will take a critical look at both sourcing techniques and see which option will better serve our organization’s procurement needs

Arguments against global sourcing

  1. Transport costs

With transport costs growing and with constantly changing demand patterns, organisations need to find smarter ways to become more responsive to customer needs and in a cost effective manner.

In recent times, oil prices have seen significant rises in price; reaching an all time high of approximately US$147 per in July 2008. While the prices have recently crashed to approximately US$60, the longer term price curve is likely to continue in the upward direction and it is worthy of note that for every one dollar rise in oil, there is a corresponding increase in the costs of transportation.  Therefore, unless there are new discoveries of ways to go around this, prices of things will continue to rise.

  1. Supply chain risk

There are also several risks that are inherent in extended supply chains that are detrimental to the growth of any business. Risks such as;

  • Extended lead times
  • Exchange rate risks which affects products pricing
  • Variable lead times in the supply chain, leading to a high level of uncertainty and inconsistency.
  • Loss of control
  • Reputational risk
  1. Loss of agility

Extended supply lines usually have adverse impacts on both time-to-market for new products and the responsiveness of suppliers to customer demand changes. Organisations are unable to quickly respond to significant changes in the market due to the extended lead times. Likewise these extended lead times tend to make organizations unjustifiably exploit larger economies of scale thereby leading to overstocking of supplies which also affects their response time to market innovations.

  1. Sustainability

Global sourcing’s increased need for transport has also impacted negatively on the world’s carbon footprint. Globalization only ends up exporting domestic carbon footprint to countries elsewhere and at an increased rate

In addition

There is an increased risk in the loss of intellectual property rights as there is often less legislative protection or enforcement in developing countries

The argument for Global Sourcing

The rising trend towards global sourcing is probably an inevitable on due mostly to man’s natural instinct to trade, seek options, explore alternatives and find new ways of doing things. Coupled with recent advances in communications and technology, it appears as if global sourcing practices have only just begun to shape the procurement world.

Some of the arguments for the huge importance of global sourcing practices include;

  1. We need Global sourcing to sustain our way of life

The constant rise in world population and the diminishing rate of resources to cater for this growing population has largely impacted the need for globalization in trade (procurement) and all other aspects of human endeavor. Nations who are in deficit will continue to look to other nations where items to be procured are in surplus and are readily available.

  1. The most sustainable option may not be the obvious one

Local sourcing may appear more sustainable but there are a number of documented cases where global sourcing has been found to have less impact on the environment. Conditions such as favorable weather conditions, vegetation, technology, availability of labor and work ethics might actually have significant positive impacts on manufacturing and production thereby leading to less carbon footprints than when sparsely produced

 

  1. Innovation can provide the solution to issues arising from global trading

It is highly possible to use innovative technology to combat the environmental challenges of global trade. Significant advancements in technology in most industrialized markets have aided the creation of breakthrough energy solutions which offers a new model for bringing lasting energy solutions that are reliable, affordable and doesn’t emit greenhouse gas. This trend has facilitated the growth of global industry.

Today there are thousands of individuals and companies across the globe working hard to harvest different kinds of clean energy in order to change the way we produce goods & services and in many cases, these experiments have been very successful.

  1. Global Sourcing Promotes Peace

There is also an interesting argument that global trade promotes peace among nations. Nations that trade together are unlikely to go to war with each other.

Conclusion

In arriving at a decision on what sourcing strategy to adopt, the points listed above need to be taken into consideration when comparing between global or local sourcing strategies. Whether local or global, neither of the two are inherently right or wrong, it is only a matter of carrying out careful analysis of both sourcing techniques with respect to your company’s procurement needs and selecting that which is more suitable to meet those needs. Wrong sourcing decisions can cost you valuable time and money

E-procurement Tips

E-procurement Tips

E-procurement constantly requires extensive strategizing and figuring out new ways to do more with less amidst intense pressure to always deliver positive results. In light of this, competition is unbelievably fierce; teams are constantly changing, and there’s increasing pressure to constantly have the upper hand.

For your organization to be successful with her e-procurement strategies, it’s helpful to adopt practices that will ensure you are always ahead.

Below are 10 winning tips to consider in order to fundamentally affect in a positive way, the success of your organisation’s e-Procurement strategy:

  1. Team work

A successful e-procurement department must never work alone. Your organisation’s e-procurement department should consist of strong teams consisting employees with defined roles and responsibilities and who will work collaboratively as a unified group towards achieving the organisation’s common objective. Each member of the team should play their individual roles to ensure the success of the team. When and if this happens, success is sure to be achieved in the company’s e-procurement strategy.

  1. Analyze Data

You have to back your strategy with meaningful numbers and data. Procurement professionals must constantly analyze data when strategizing in order to guide the decision of what strategy to adopt. Likewise, the team can also use these numbers to track trends, recognise threats, spot opportunities, alter strategies and optimize opportunities for better performance.

  1. Know Your Competition

Research and Monitor your competition so that you always know who and what you’re up against and what they are always up to.   There are many ways to go about this; follow your competitors on social media, subscribe to their marketing newsletters, and regularly check their websites for company updates. You can also encourage your procurement teams to engage in conferences, webinars and seminars to help them stay ahead of the curve,

  1. 4. Manage Relationships

Good vendor relationship is an important ingredient for sustained success in any organisation’s procurement strategy. As you get to know your vendors, engage with them more and help them participate and deliver better through your procurement chain. Define what your expectations are and give the vendor a chance to explain how it will meet those expectations. Take the time to ask for several references and make sure you understand the amount of training and support that is needed throughout the entire process.

The more complex the product or service, the more important it is to identify the competence and capacity of the vendor. Smaller companies with less complex procurement needs should however not spend too much vetting every single vendor. Gathering useful information about your vendors will help you define your vendor preferences and in the long term, help you streamline your vendor list and simplify your procurement process.

  1. Maximize time and resources

Procurers and vendors alike are extremely busy people with each trying to meet the needs of many at the same time. In order to maximize everyone’s time and resources, preparation is key. Prepare in house before meetings, perform needs assessment analysis and constantly re-evaluate your relationship with your vendors.

Meet with your vendors periodically to review pricing and working conditions to make sure that they are still meeting up with required expectations.

Have someone designated to manage all your vendor issue and keep all vendor contracts, contact information, and related documentation in a single location so that whenever an issue arises, related information is easily accessed and they are resolved quickly.

  1. Save! Save! Save!

In E-procurement, all cost savings are important. Companies are quick to target big dollar spends for e-sourcing and ignore the lower cost items. Summarily, all these costs add up into something significant in the long term and if you must get the best value in your e-sourcing activities, every category of spend must be incorporated into your e-sourcing strategy.

  1. Embrace the change

A new way of doing things can sometimes be intimidating for management and staff of a company, especially when it has the potential to uncover additional savings. E-sourcing process creates a competitive dynamic that is way above the league of traditional sourcing methods and top executive in the organisation need celebrate and promote this new way of doing things. Keeping an open mind and applying e-sourcing techniques and tools in new and creative ways will ensure your program maintains momentum and remains profitable.

  1. Vendor selection should not be based solely on price.

This is very regular practise for most e-procurers and it’s easy to understand why. However, this approach to e-sourcing is surely a recipe for disaster. There are other factors that should be considered when selecting your vendors. Factors like; experience, capacity and track record of vendors providing such services. Identifying a great price should just be one step of the entire process.

   9.  Follow up on quality control.

Make sure your vendors are supplying to specifications. It’s not enough to select the least cost provider with a good reputation on paper and then go to sleep thinking that all is well. Continuous follow up on quality control with your suppliers is key to ensuring that you get what you paid for

   10. Be consistent with your results

Procurement professionals also face a constant need to be consistent. You need to find the right tools and solutions that will work for your organization. By clearly defining the organisation’s procurement objectives, delegating specific roles and responsibilities to members of the procurement teams and making the teams see how the procurement process aligns with those objectives, you’ll be able to deliver consistent results.

 

 

Misconceptions About E-sourcing

E-Auctions are very essential tools in a procurer’s toolbox and is capable of providing extraordinary value if appropriately applied. However, wrong implementation and sourcing strategies and a lack of the necessary expertise needed for a successful execution, oftentimes undermines the potentials and benefits that can accrue from e-sourcing practices.  This sometimes results in having disappointed and disgruntled sourcing teams that become open to myths and misconceptions about the true worth of e sourcing technology.

So with all these tales of woes hovering everywhere in the air and contaminating the minds of optimistic e-sourcing professionals, how then are we to determine what information is true and that which is a myth as far as modern sourcing techniques are concerned.

Listed below are 5 of the most popular of these false facts that are being peddled about e-sourcing

  1. E-sourcing techniques are only useful when opting for the lowest price goods or services.

This is so false! because negotiations don’t begin until at the end of a bidding process. This starts only after expected service offerings, product specifications and terms of contract has been agreed by both parties. Suppliers who then surpass these criteria are invited to participate in the negotiation process where the pricing is finally being considered.  With e-Auction, products, prices, quality and terms of purchase are clearly visible for all to see and suppliers can get involved in open competition. This process captures in a central location all the information that is needed so every player has equal opportunities to consider these factors before making business decisions.

E-Procurement has a lot more to offer than just competitive pricing – With e-sourcing you are able to get the best value that your money can buy.

  1. E-Sourcing is only used when offering commodity items and products, not services.

eSourcing techniques can be applied in numerous categories across the business world, not just with commodities and products. Services such as, cleaning, laundry and waste removal can be sourced online with significant savings to be realised at the end of the day. Sourcing experts can also identifying new online sourcing categories that might be relevant and specific to your business needs and likewise provide guidance on how best to go about it in order to receive great value for you and your business.

  1. Esourcing does not produce as much significant savings as is often described.

Regarding this particular line of thought, I can only say to you; “Why not try it out and see for yourself”. Too many companies these days no longer worry themselves about controlling her indirect spend because it is natural to regard it to be much smaller in size when compared to direct spend. However, you cannot even begin to imagine the huge amount of savings that can be realized in this category of spend, which includes; office supplies, computer equipment, floor mats,  hangers, display racks for retailers e.t.c. and any other item or supplies that your employees would ordinarily be needing. Smart procurement teams have realized this and are literarily not sparing any expense when it comes to all things procurement on behalf of their organizations. It’s time to get more creative with your company’s sourcing needs both in the direct and indirect categories of spend.

  1. eSourcing technology is a “one-size-fits-all.”
    This is so not true. Every organization’s procurement team have their own goals and tasks set out for them, and this is why a one-size-fits-all ranking being applied to all categories of suppliers is a recipe for disaster. Applying generic ratings to all service providers is usually not a fair and realistic strategy to adopt and practice in the world of esourcing technology. Different providers have their different strengths and service offerings even if they are operating in similar line of business. It is therefore important for the procurer to explicitly define expectations in each procurement exercise that he and his organization embark on. .
  1. Collaboration is not necessary when it comes to improving esourcing initiatives

Under normal circumstances, I’m sure we will all agree that collaboration breeds more creativity and innovation. So why should it be any different with esourcing practices? Decision making normally is a collaborative activity and collaboration with your procurement team and other stakeholders can help you gain tremendous insights that can enable you solve problems much faster and better. Opportunities that lie within collaboration are huge from both the supplier’s and the procurer’s end. Apart from the significant cost savings that can be obtained from economies of scale achieved through collaboration, collaborators also stand a good chance improving their current decision making process and sourcing initiatives by sharing ideas and experiences and also exchanging notes on past practices that have worked out well for them and their respective procurement teams.