E-PROCUREMENT OF DIRECT MATERIALS
In today’s competitive business world, the corporations are continuously looking for IT solutions to
improve the efficiency of their business processes and there by cut cost of operation to improve their
margins. The businesses are under constant pressure to improve their bottom line irrespective of the growth
in top line. They have no choice but to adopt the new e-procurement solutions, to improve time-to-market,
reduce operations cost, avoid costly mistakes to stay on top of competition and avoid risk of extinction
In order to improve the procurement efficiency and realize maximum potential savings, it is necessary that
the entire supply chain must be very efficient. The suppliers and the trading partners, such as shipping
agents, clearing and forwarding agents and finance agents must be as efficient in order to provide the right
materials at the right time at the right place at the right price at the right quality. This is only possible by a
collaborative solution between buyers, suppliers and trading partners. It is important that the e-procurement
solution must focus on collaborative supply chain practices in order to realize the fullest savings.
There are various types of procurement activities in an organization based on direct and indirect materials.
The direct materials are items that are purchased for the production and the indirect materials (MRO items)
are purchased for support of production activities. The features and the specifications of the
e-procurement solutions vary for direct and indirect materials, depending on the procurement process of
different vertical industries. Due to these varied requirements of e-procurement, different e-procurement
providers focus on either different vertical industries or horizontal processes based on their domain
knowledge and expertise.
e-procurement solutions come in different flavors and colors to cater to variety of industry requirements.
Vertical and Horizontal Exchanges
Public exchanges for various vertical m