SUPPLY CHAIN MANAGEMENT INFORMATION SYSTEMS
OVERVIEW OF SUPPLY CHAIN MANAGMENET INFORMATION SYSTEMS
Recently the concepts of supply chain design and management have become a popular operations paradigm. This has intensified with the development of Information and
Communication technologies (ICT) that include electronic data interchange (EDI), the internet and World Wide Web (WWW) to overcome the ever increasing complexity of the systems driving the buyer-supplier relationships.
The complexity of SCM has also forced companies to go for online communication systems. e.g. the internet increases the richness of communications through greater interactivity between the firm and the customer (Watson et al 1998). Graham and Hardaker (2000) highlight the role of the internet in building commercially viable supply chains in order to meet the challenges of virtual enterprises. All these reasons seem to point to the ever increasing importance of e-procurement to both public sector and private sector organizations.
1. Defining E-procurement
According to CIPS, e-procurement is:
“The combined use of electronic information and communications technology (ICT) in order to enhance the links between customer and supplier, and with other value chain partners, and thereby to improve external and internal processes. E-Procurement is a key component of ebusiness and e-commerce.”
E-procurement is the term used to describe the use of electronic methods, typically over the Internet to conduct transactions between awarding authorities and suppliers.
The process of e-procurement covers every stage of purchasing, from the initial identification of a requirement, through the tendering process, to the payment and potentially the contract management
E-procurement (supplier exchange) definition;
E-procurement is the business-to-business purchase and sale of supplies and services over the Internet. An important part of many B2B sites, e-procurement is also sometimes referred to by other terms, such as supplier exchange. Typically, e-procurement Web sites allow qualified and registered users to look for buyers or sellers of goods and services. Depending on the approach, buyers or sellers may specify prices or invite bids. Transactions can be initiated and completed.
Ongoing purchases may qualify customers for volume discounts or special offers.
2. Evolution of E-procurement
The origins of e-procurement begin in the 1980s, with the development of electronic data interchange (EDI). This development, while ancient by today’s standards, was groundbreaking for the time. EDI allowed customers and suppliers to send and receive orders (and invoices as well) using call-forward networks.
In the 1990s, technology, as it tends to do, improved and software companies began to develop electronic catalogues specifically for use by vendors.
Since, e-procurement software has become an amalgam of the two: a platform for sending and receiving orders (as well as myriad other expenses such as travel) and various catalogues.
Marketplaces have also proven to be a popular addition to e-procurement software.
Marketplaces, to borrow CIPS’ definition, are: virtual marketplaces for suppliers, distributors, agents and customers.”
Electronic Data Interchange
May be defined as;
The technique based on agreed standards, which facilitates business transactions in standardized electronic form in an automated manner directly from a computer application from one organization to another.
How EDI works
1. Company A creates a purchase order using its internal business software
2. EDI software translates the order