Question

E-procurement has become a best management practice in modern organizations. Use an organization of your choice to justify how e-procurement is being deployed to achieve massive cost savings and other related benefits.

Answer 1

E-Procurement is the buying and selling of a product and/or services via a web portal and/or other online mediums. This innovative practice was started in the 1980s, when Electronic Data Interchange (E.D.I.) was developed, to streamline and automate transactions among a company, its consumers, and other supply chain stakeholders in order to increase the effectiveness and performance of the procurement processes. The practice of e-Procurement is sometimes also known as electronic procurement or supplier exchange.

An example of the impressive success of Motorola due to the adoption of e-procurement practice could be the best way to understand how e-procurement is being deployed to achieve massive cost savings and other related benefits.

· Motorola has adopted the e-procurement method in Non-Production Procurement (NPP) which has helped it immensely in cost reduction and streamlining its procurement process.

· E-procurement has also helped Motorola in integrating its procurement process globally due to which Motorola gains the advantages of economies of scope.

· Non-Production Procurement (NPP), goods, and/or services necessary to function a business, constitutes approx. one-third expenditure of Motorola has become highly efficient and effective after the adoption of e-procurement by Motorola.

· E-procurement has also helped in saving time which can now be utilized for further production has also helped Motorola to earn more revenue. This is another benefit of e-procurement.

· E-procurement has also helped Motorola in reducing the “renegade purchases”.

· E-procurement has also helped Motorola in leveraging its buying power.

· E-procurement has also benefitted Motorola to reduce production cycle times and process costs.

· E-procurement has also improved process quality and brought information transparency which has helped Motorola in taking effective decisions.

· E-procurement has also helped Motorola in redesigning its products and/or services in a better way.

So these are the benefits that Motorola has got through the adoption of E-procurement practices which justifies the inherent advantages of the e-procurement process.

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