© 2011 Sixhills Consulting LtdPerspectives on B2B eCommerceThe traditional Purchasing cycle contains many inefficiencies. Whilst purchasing is often treated as a single amorphous cycle, there are actually three distinct cycles: Sourcing, Order Management and PaymentsDefining Purchasing1. Traditional Procurement Cycle InefficienciesEmployee NeedSelect ItemMailing the OrderDeliver Product/ServiceRoute to RecipientReceivingPhone PurchaseWriting the order ReceivingChecking Storage in Legacy System Mailing the InvoiceSupplier FulfilmentPoorComplianceRenegadeBuyingSourcesof inefficiencyInefficientVendorManagementLow ValueActivitiesLong CycleTimeSign-offMulti-StageLogisticsNo SeamlessTrack and TraceNeed forThree-wayMatchPaymentLogisticsSign-offHigh ErrorRateOrder PlacementEnd-UserSelectionDelivery Invoice and PaymentApprovalSupplier FulfilmentReceipt ConfirmationPreferred suppliersSourcing teamDefinition of Quality Requirements and Standards PurchaseManagement• Control• MonitoringPrice finding mechanismSelection, enhancement of supplier base Consequent NegotiationsOrder RequestGlobal Agreement DatabaseManage OrdersSourcePayIssue PaymentProcess PaymentOK-to-payReconcileInvoiceNegotiation mechanism2. Purchasing – The Three-Cycle ModelB2B PerspectivesP1
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