What is e-procurement?
E-procurement is the process of buying and selling over the internet. This method opens the lines of communication between the supplier and the company. This direct line establishes interaction and facilitation between the two parties for purchase orders, announcements, or even bids.
Why is e-procurement important?
For companies that purchase their stocks from suppliers, doing e-procurement is beneficial to their procurement management. From the financial departments to the logistics department, doing e-procurement easily fits itself to the company as the process itself already has a built-in management to it. Here are some major benefits as to why e-procurement is done.
1. Cost Savings
The built-in monitoring tools in the system help control costs and maximize performance while reducing paperwork and overhead. It also streamline processes which can quicken the creation of order being completed.
Because e-procurement is a system that works hand in hand with the company’s existing
system, all the information is more centralized than ever. From the management team up
to the stakeholders and public, the information are publicly posted and done possible because of the centralization of the process.
3. Inventory Control
The people in charge of buying products from the suppliers have more control over the inventory that they want through e-procurement. This is because the company can easily locate what products are available from the suppliers that they have and also control how much stocks they want.
4. Purchasing Cycle
By implementing e-procurement into the company’s system, it creates a centralized transaction for tracking orders, payments, and other order procedures for both suppliers and companies. Both sides can also ensure that the other party is following the guidelines in the contract. Furthermore, buyers can have access in knowing the latest products, services, and prices of the company from the efficient communication between the supplier and the company.