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What is e-procurement?

Electronic procurement – or e-procurement for short – refers to the electronic purchase of products or services. Paper-based procurement processes are replaced by e-procurement solutions using IT systems. Among other things, this enables the digital exchange of product information and business documents (e.g. order, order confirmation, invoice) between supplier and buyer. Direct transfer not only speeds up the ordering process, but also enables entire process steps to be automated. This greatly simplifies the electronic handling of internal processes, such as approval procedures or reporting. As a result, process costs are reduced for both the purchasing department and the supplier, helping to digitise and optimise procurement processes.

e-Procurement solutions

e-Procurement: Buy-Side vs. Marketplace-Side vs. Sell-Side

There are various Internet-based systems for using e-procurement. In a sell-side solution, known as a supplier system, the supplier provides the catalogue and software, whereas in a buy-side solution, also known as a customer system or procurement system, these are specified by the buyer. The third solution is a type of marketplace provided by third parties as a procurement platform. In these marketplace-side solutions, both suppliers and purchasers need to connect to an external system. The key difference is therefore who operates the portal and in whose system environment the order processing takes place.

Buy-side: in-house e-procurement solutions

Large industrial companies already use complex systems for procurement, production control and inventory management that are perfectly tailored to their business and that efficiently control and monitor the flow of goods. As breaking out of these systems always involves the costs and disadvantages mentioned above, in the B2B sector there is often a requirement for the supplier to adapt and ideally be prepared to create a suitable link to the customer’s system. This allows the customer to order systematically and efficiently through their own system. The benefits of this solution are obvious:

  • All the items the customer needs can be entered.
  • The order triggers work in the familiar system.
  • Order and delivery data can be processed directly in the customer’s system.
  • Suppliers and products are defined and qualified.
  • Controlling of the procurement process is covered by internal tools.
  • Incoming goods inspections are handled automatically.
  • Customised delivery terms can be integrated.
  • Invoice and payment processing is automated.

Marketplace-side: procurement platform as an electronic marketplace

With a marketplace-side solution, responsibility for the system lies neither with the supplier nor the customer. Here, a provider is interposed that acts as an electronic marketplace for several trading partners. With the help of standardised interfaces, several suppliers and buyers can connect to procurement platforms. This solution has both advantages and disadvantages for purchasing companies:

  • Employees can buy from multiple suppliers (multi-supplier catalogue)
  • The supplier is responsible for maintaining the product data
  • Catalogue range can be modified by the supplier if necessary
  • Fees for use and implementation
  • Additional costs may be incurred (transaction costs per business document, additional services)
  • Connectivity often limited to standard interfaces

Sell-side e-procurement: the drawbacks of web stores

Probably the best known e-procurement solution is the supplier-side web store, which is primarily used in B2C procurement, but has a number of hurdles and additional costs in the B2B sector:

  • The web store is limited to a finite product portfolio.
  • The user is forced to leave his own system and log into the supplier’s system.
  • Order data is not automatically transferred to the customer’s system.
  • Maverick buying is likely to occur.
  • Controlling is made more difficult.
  • Considerable effort is required to check incoming goods and quality.
  • Special delivery requirements cannot be accommodated.
  • Invoicing and payment processing is complicated.

AWI Services for e-procurement solutions

e-Procurement

Digitise the procurement process for your C-parts.

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e-Procurement

Automate your electronic data exchange with the help of OCI and/or EDI.

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AWI Eberlein GmbH

Die AWI Eberlein GmbH ist Servicedienstleister im Bereich C-Teile-Management. Wir sind spezialisiert auf die systematische Beschaffung von Hilfs- und Betriebsstoffen sowie deren Auslieferung im Rahmen kundenindividueller Lieferkonzepte. Dabei unterstützen wir mittlere bis große Industrieunternehmen in ganz Europa bei der Optimierung ihres Beschaffungsmanagements. Im Rahmen zahlreicher Projekte stellen wir täglich unsere Liefertreue, Reaktionsschnelligkeit und unsere lösungsorientierte Arbeitsweise unter Beweis.
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