eCommerce--Are
You Ready?
By
Ed Rigsbee, CSP
(615 Words)
Procurement through the Internet has many
industries running for cover. Companies that seek quicker procurement solutions,
especially on basic consumables, are now looking toward the Internet.
E-procurement is essentially changing the buying method. E-procurement allows
your employees to order and receive supplies and services while never leaving
their workstation. E-procurement streamlines the traditional purchasing process
through the use of Web-technology. The result both cost savings and improved
responsiveness from your strategic partnering alliance suppliers.
An issue of Inter@ctiveWeek reported
both Ford Motor and General Motors had moved their $80 billion each purchasing
online. Ford is Partnering with Oracle and GM with Commerce One to build
their systems. “This is the only way we’re going to do business going
forward,” says Harold Kutner, vice president of worldwide purchasing at GM.
“It’s not going to be an option [for GM’s suppliers]; it will be a
requirement.”
In EC World it was stated
that, “Enterprise-wide electronic procure-to-pay solutions truly deliver on
the promise of the Internet to provide streamlined solutions for business.”
“Early adopters of online ordering primarily opt for employees to shop in
virtural megastores such as Office Max or Staples.”
Listed below
are five types of suppliers that can effectively participate with you in
E-procurement, regardless of their size.
1.
Companies currently conducting e-commerce with transactional Web sites.
2.
Suppliers with Web sites for marketing purposes but not for taking
orders.
3.
Suppliers without Web sites who can still support EDI and/or CD-Rom
catalogs.
4.
Merchants without Web sites.
5.
Internal suppliers from within your own company.
ECWorld
talked about Los Angeles County taking the plunge into Internet purchasing.
Chrys Varnes, director of electrical commerce for Los Angeles County’s
Internal Services Department said, “Lead times were too long, agreement prices
were often too high, and the agreements themselves were too hard to find and
use.”
Los Angeles
County is the largest in the United States, overseeing 4,083 square miles,
two-thirds unincorporated. The geography includes packed urban areas, sparsely
populated maintain ranges, 76 miles of coastline and offshore islands. The
County employees a total of 84,000 people and has buyers, working out of 36
different buying locations to serve its 9.5 million residents.
To create the
County’s Acquisition Management Information System (CAMIS), they selected an
Internet-based system that had browser-based access. This allows even the
smallest potential supplier to participate. Commerce One emerged as the winner
with their Commerce Chain Solution. The CAMIS consists a Web-based automated
procurement system and an extranet application that allows real-time links
between the suppliers and the county. Not only does this allow automating order
processing, additionally suppliers can provide product and pricing updates to
their catalogs. At writing, Los Angeles County can select from over five million
items from over 5,000 suppliers. Also buyers are able to compare prices across
suppliers, insuring the best price for individual items.
It cost Los
Angeles County approximately $2 million to implement CAMIS, but it is only less
than one third of one percent of the total purchasing dollars processed in a
single year. Recently, the County’s central warehouse was closed. This
represents savings of nearly $30 million over five years. As paper catalogs
become obsolete no sooner than they are printed, CAMIS is constantly updating.
Now that
I’ve gotten your attention, what are you doing to take advantage of this
trend? If you think the graphic arts supply industry is a safe harbor in which
to weather this cyberstorm, think again. We are in the midst of an incredible
economic revolution. The rules are changing before your eyes. Those who can see
past their nose will receive the rewards, unfortunately that will not be
everybody who reads this column. Will it be you?
#
# #
Copyright 2000
Ed Rigsbee, CSP is the
author of PartnerShift, Developing
Strategic Alliances and The
Art of Partnering. Additionally, he has over 1,500 published articles to his
credit. Ed travels internationally to deliver strategic alliance keynotes
and workshops. He can be reached at +1 (805) 498-5720, ed@rigsbee.com or visit www.rigsbee.com.
To
access helpful additional information from Ed Rigsbee at no charge,
please visit www.rigsbee.com/downloadaccess.htm.
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