The Role of e-Procurement in Supply Chains

A procurement system is a vital component of a company's supply chain system. Global firms are optimistic on the level of savings that can be achieved through full implementation of e-procurement strategies. In this paper, the subjects of e-procurement and its applications and benefits to organizations have been studied. Also, its drivers and barriers have been discussed and a framework of supplier selection in an e-procurement environment has been demonstrated. This paper also has addressed critical success factors and performance criteria in adopting e-procurement in supply chains. The results imply that the e-procurement is expected to reduce lead time and therefore to provide agility to supply chains, strategically. The associated benefits could be classified into strategic, operational and opportunity benefits and will vary in emphasis across different organizations, depending on how it has been implemented. The implementation of online procurement systems, has never been easy due to the barriers created by the different hardware/software, diverse corporate culture and varying users' skills of interacting with IS/IT. Additionally, an online procurement system is a very sophisticated system in organizations and employees and managers are the major drivers of the technology. The process of supplier selection in e-procurement requires the problem to be broken down into a hierarchy tree and considering an added sub hierarchy called electronic transaction, which facilitates quantitative decision making. Finally it was found that not all critical success factors are critical in every company. Performance indicators could be classified into three different categories as organizational structures, managerial criteria and key activities, which are closely interconnected.

The Role of e-Procurement in Supply Chains Keywords:

e-Procurement , Supply Chain , Benefits , Drivers , Barriers , Performance