2.3 - Explain how electronic systems can be used at different stages of the CIPS Procurement Cycle Flashcards
What 2 things do e-procurement consist of
- E-sourcing
- E-purchasing
E-requisitioning
Sending a requisition via electronic methods
E-sourcing
The electronic procurement of products or services using internet-enabled applications and decision support tools. These tools facilitate interactions between buyers and suppliers through the use of online negotiations, online auctions, reverse auctions etc
E-catalogues
Online catalogues
E-tendering
An electronic approach to tendering using emails or portals
E-auctions
Auctions where the bidding takes place on the internet
E-ordering
Using an electronic system to place orders
E-payment
Transferring funds electronically
Name the 10 steps of the e-procurement process
- identify the need and requisition
- Authorise
- Order
- Receive
- Payment
- Knowledge
- Specification
- RFQ/tender
- Negotiation and evaluation
- Contract
Name 7 elements of stages within the CIPS Procurement Cycle that are commonly carried out electronically
- Raising and receipt of requisitions
- Developing the specification, sending RFQs and negotiating with suppliers
- Researching product ranges
- Sending and receiving RFQs, bids and tenders
- Evaluation of bids and contract award
- Placing orders on contract award
- Payment
Intranet
A private network that is only visible to individuals working for an organisation. It may contain company policies, news articles or important company information
Extranet
An external network related to an organisation
Name 5 advantages of e-catalogues
- Information is always available
- Information is always up to date
- In depth details are readily available
- E-catalogues can be viewed at all times
- Environmentally friendly
Name 3 disadvantages of e-catalogies
- If technology fails access is denied
- Lack of relationship building
- May be difficult for buyer to navigate
Reverse auction
An auction where the bidding decreases over time to ensure the buyer gets the lowest price
Name 9 times when reverse auction is ideal for procurement
- Specifications are simple and goods/services can be clearly described
- There is a large and competitive supplier base
- Lead times are relatively long to enable the process to run fairly
- Prices and market forces are stable, so all suppliers can bid fairly
- Buyers are looking for short-term contracts and not collaborative relationships
- There are low costs associated with changing supplier
- The delivery schedule is regular and simple
- The value of the purchase is high, because reverse auctions take time to prepare
- E-auctions are most typically used only to evaluate price
E-tendering
An electronic approach to tendering using emails or portals
E-RFQ / E-ITT
An electronic version of a request for quotation or an invitation to treat
Name 5 pieces of supplier evaluation criteria
- Price, quality and delivery
- Financial stability
- Long-term relationship potential
- Total quality performance and philosophy
- E-commerce capability
Name 3 things included in e-sourcing activities
- developing the e-specification
- Sending e-rfqs/e-itts
- E-negotiation
What electronic systems are involved in contract award and implementation (4)
- E-ordering
- MRP
- Smart contracts
- EDI
What electronic systems are involved in warehouse, logistics and receipt (5)
- ERP
- MRP
- EDI
- RFID
- Order tracking
What electronic systems are involved in contract perfromance and improvement (1)
KPI reporting technologies
What electronic systems are involved in supplier relationship management
E-payment
What electronic systems are involved in asset management (2)
- Spend analytics
- EAM
What are the 2 methods of e-ordering
- A manual input system
- Automated systems
Name 3 ways an e-payment can take place
- Bank transfer
- Debit or credit cards
- Approved e-payment portals
Name 4 advantages of e-payments
- Quick process
- Traceable
- Low risk of money going missing
- High level of control
Name 3 disadvantages of e-payments
- Possibility of online hackers
- If technology fails, the system stops
- No personal relationships
Name 4 transaction benefits of electronic systems
- Increased efficiency through the speed and accuracy of transactions and the elimination of administrative errors
- Increased speed in transactions allowing organisations to be more responsive to customer demands
- Reduced cost in producing purchase orders and supplier administration
- Shared benefit with the supplier through increased transparency of transactions
Name 2 organisation benefits of electronic systems
- An increase in efficiency and visibility of spend
- Ensuring organisation-wide compliance with company procurement standards
