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What is retail e-procurement?

June 24th, 2010

It no longer surprises this author how many retailers I meet with that ask me; what is e-procurement. So I digress.

In many cases the question might be better phrased as to; what is procurement?

It’s amazing as to the number of companies both large and small that have no internal procurement organization. It is even more amazing how small the groups when companies do have them. In either case due to a of lack of resources, disconnect from information resources, lack of authority and little collaboration an energy sucking power struggle exists that limits the effectiveness of the entire procure to pay process.

I like to think of this process as the procurement lifecycle. In general the lifecycle follows a pretty typical buying pattern, each step of which has its own set of difficulties. The first step which when generalized could be called information gathering. Inforamtion gathering can include collecting and producing product specifications as well as research and locating suppliers that can meet those speciations. While the last item in the list called renewal can include the entire order and fulfillment process as well as contract compliance.

The procurement lifecycle pretty closely follows this process

1. Information gathering
2. Supplier contact
3. Background review
4. Negotiation:
5. Fulfillment
6. Consumption, maintenance, and disposal
7. Renewal

If we cycle back to our original question of what is e-procurement? The answer is pretty simple, it is the electronic or internet based version of the same process much of which has its own unique terminology.

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