We live in a world where almost all types of services and products are sold by aggregator platforms — from groceries, electronics, healthcare, travel, household items, to vehicles.
The evolution of cloud, artificial technology, and IoT has further transformed efficiency and access in a big way.
Gartner has predicted that by 2022, about 50 percent of the existing spend analysis and procurement tools will be replaced by AI-driven, cloud-based purchasing platforms. Hence, it makes perfect sense to use the same technologies to power procurement.
Amidst the COVID-19 pandemic — where the business world had to face disruptions in supply chains due to lockdown and movement restrictions — e-procurement becomes even more important.
There are foundries and manufacturing industries involved in producing critical need materials, who need to proactively source raw materials alongside an emphasis on the quality of the materials. The facility of e-tendering and e-contracting ensures speedy fulfilment of the need.
E-procurement platforms are technology-driven online portals, which are owned and operated by companies, and in some cases, governments.
Businesses register on these platforms and state their requirements, which has a list of registered vendors who digitally bid for the requirements. And as per the company’s considerations, the contract is given to a vendor.
In a pandemic impacted business landscape, the importance of a robust and shock-proof supply chain can’t be overemphasised.
Indian metal manufacturing sector requires a constant supply of quality raw materials for production, and in the conventional approach, there are several risk factors.
For instance, the conventional procurement process requires the purchasing department to hold one-on-one interactions with the vendors, where bids are submitted and evaluated manually. This inherently puts a limit to the number of vendors that can bid for a requirement, and this limitation can impact the quality and reliability of the supply chain.
Through digital procurement, a lot of complicated and cumbersome processes are either eliminated or become simplified. Here are a few examples:
Through e-tendering, companies can make the procurement process simpler for specific raw materials and specialised goods, such as machinery, and can easily procure small or large quantities as required.
For any company that requires a steady flow of supplies and raw materials for its operations, vendor management is a core need. This has to be done with a focus on production excellence, cost control, quality assurance, and risk mitigation. Vendor management enhances value from the vendors and contracting speedier.
Cloud-based supply chain management
There is a need to compile and organise the supply chain data from suppliers. This is essential for cybersecurity purposes and future procurement planning.
The data collection also provides insights about sources and the flexibility of modifying supply chains in instances of remote working. In the wake of the pandemic, cloud-based procurement has become a highly beneficial option for manufacturers.
Data analytics-driven crisis management
Automatic data analysis in the source-to-pay (S2P) process is extremely important for businesses, more so in crisis management situations. A good e-procurement platform allows such desired analytics-driven crisis management, helping you deal with the changes more effectively and speedily.
Production driven procurement
Traditionally, the production process and procurement existed in silos. However, with the advent of technology, there is an opportunity to ensure better harmony and coordination between these two functions.
As per a study, ensuring procurement and production processes’ joint optimisation could result in up to a 25 percent increase in efficiency.
By opting for e-procurement, businesses also derive various benefits and can drive leaner and optimised procurement operations. A company can not only purchase the required raw materials but can also maintain real-time inventory records.
As a business, you can determine the volume of raw materials in stock and required over a specific time. Considering the standard time taken by the procurement and delivery processes, business leaders can proactively manage inventory and place orders for raw materials.
Transparency of operations is another great benefit of e-procurement. At any time, all the information is precisely stacked into various segments, and there is easy access to process timelines.
Records related to a purchase made a year ago can be as easily accessible as the information for the previous week. Thus, there is greater management of revolving credit and payment cycles without any friction with the vendors.
Time is of the utmost essence in the post-COVID scenario, and e-procurement proves to be a great time saver. An organisation can place its requirements online, select from the bids submitted after due analysis, and place the order.
The order fulfilment becomes faster and the invoicing and payments are handled digitally. The cost of time and reliability has never been higher. Imagine if one could have reliable procurement platforms and save millions in interest and working capital costs.
Manufacturing sector players are now familiar with the role e-procurement can play in resolving their problems and eliminating the supply chain bottlenecks.
Advanced AI-driven e-procurement platforms provide constant inputs, analytics and help businesses set parameters for their requirements.
By using such platforms to source raw materials, manufacturers can seamlessly focus on productivity and manufacturing without any production and procurement worries.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)