Canadian Plastics

Internet sites and business issues relevant to Canadian processors and moldmakers (July 01, 2000)

E-procurement: the next paradigm shiftIn preparation for the slew of dot.com companies I'll be reporting on next month (follow-up the onslaught at NPE), here's a few thoughts on integrating e-procurem...

July 1, 2000   By Cindy Macdonald, Associate Editor



E-procurement: the next paradigm shift

In preparation for the slew of dot.com companies I’ll be reporting on next month (follow-up the onslaught at NPE), here’s a few thoughts on integrating e-procurement into your company. The current buzz among dot.com PR types is that e-commerce is so much more than just buying online, hence the new term e-procurement It encompasses logistics and financing, facilitates accounting by consolidating purchases and invoicing, and generally must worm its way into your purchasing, accounting, receiving, and inventory functions in order to provide maximum benefits.

The following myths and realities about e-procurement are from TechnologyEvaluation.com (1) and forwarded to me by the helpful folks at Commerx, founders of PlasticsNet.com (2) (now known as Commerx PlasticsNet).

Myth: E-procurement systems can be purchased.

Reality: Only some components can be purchased. Failure to create the essential interfaces will bog down the e-procurement process or will create new work for people who must manually transport or transcribe data.

This is a niche for application service providers, who, as I understand, supply a bundle of software products and maintain them for you.

Myth: Purchase price will go down.

Reality: Optimizing the end-to-end process will often lead to higher prices for some items. Reducing the number of invoices, negotiations, payments, receipts and system interfaces will offset higher individual product costs in a well-implemented system.

“E-commerce reduces overall procurement cost,” is the current offensive and defensive spin of the new middlemen.

So even the buyer side of e-commerce is not just point, click, receive. It’s another enterprise-wide, paradigm shift — establish a committee, document current procedures, dream about how it could be so much better and faster using technology, then assess the reality of buying systems and putting a new structure and culture in place that actually uses the technology. I hear echoes of re-engineering, Deming, EDI, ERP.

I was on a re-engineering committee once. We spent a lot of time airing our gripes over management-sponsored pizza. We had buy-in from the highest levels of the company, but immediately after we presented our make-all-your-editors-happy plan, the president was replaced and re-engineering walked out the door with him.

I doubt e-commerce will be so transient; it has more mass behind it.

(1) www.TechnologyEvaluation.com

(2) www.PlasticsNet.com

Plastics portal extends financing options

Plasticscommerce.com (1) has partnered with First International Bank (Hartford, CT) to provide and service 14 types of commercial and cross-border trade loans to facilitate e-commerce transactions on Plasticscommerce.com.

The bank will fund loans up to US$5 million per transaction. First International’s e-CreditMenu product offerings range from basic payment guarantees, working capital lines and equipment loans, to sophisticated international trade, barter and energy financing programs.

(3) www.plasticscommerce.com


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