Purchasing Electronically

Going Further

Use this section to find specific ways in which technology can transform your purchasing.

Integrate your systems

If electronic purchasing interacts with other areas of the business, costs can be further reduced. Purchasing is just one part of logistics. There are also the questions of when to buy and in what quantities.

Your accounting system needs to be integrated into purchasing as tightly as possible. Electronic ordering can be linked with electronic payment methods, automated stock control and online ordering. This improves efficiency.

There are a variety of systems for linking process. For example, an integrated business system lets you link and coordinate different business functions. If you don't have the resources to invest in these kinds of systems, you can approach an application service provider (ASP) who can rent you software and the network capacity to go with it.

Quality testing

There are several programmes that allow you to visually check quality over the Internet. With a fast connection and the right software (often free) you can look at digital images to assess what you're buying.

If you are going to use more advanced facilities like this, you'll need a broadband connection. This is more expensive than a normal phone line, but it will greatly improve your ability to make use of the Internet.

Integrate your suppliers

Playing suppliers off against each other is one way of driving the price down. But longer term framework or call-off contracts can give you the same price savings with the additional benefits that come with building established relationships with key suppliers.

These types of contract will act as an incentive for suppliers to help you purchase supplies electronically - from simply taking your orders via e-mail to implementing an e-commerce web site or extranet.

There are a number of benefits in using web sites or extranets for purchasing.

• Order tracking and quality assurance - you can monitor the status of orders via your supplier's web site.
• Swifter delivery - advance electronic orders are factored in sooner and can be processed more quickly.
• Secure online ordering - extranets are password-protected and use EDI links for online ordering. Secure ordering and payment systems are also available across the Internet.
• Closer links - since this is an efficient way of doing business for both supplier and customer, they are encouraged to work together and form a tight supply chain team.
• Automatic restocking - let your suppliers monitor your stock levels via your extranet and replenish when needed.

This information based on information which is Crown Copyright 2003