Technology and E-Commerce

Marketing 3860 – PurchasingJuly 14, 2004Kimball Bullington, Ph.D.Associate Professor of Operations ManagementMiddle Tennessee State University

What Items are Candidates for E-Commerce?

Critical 2: Special Situations

Critical 1:Long-term Relationship

Non-Critical 1:Contractual

High

Low High

Ris

k

Annual Spend

Supplier Characterization Matrix

Non-Critical 2:Transactional

80% of $20% of suppliers

Recognition of Need

MRP Order Release Reorder point activated release User issued request Time-based release

Specify / Describe Need

Reference to standard item / service number

Reference to existing item / contract / PO

User specified detailed description

Determine Sourcing Options

System comparison to open, blanket/system, or other contract

System-generated list of qualified sources

Issue e-RFQ or e-RFP

Establish Price & Terms

Reference to open blanket Generate history of past prices paid Reverse e-auction E-marketplace Access supplier’s online catalog

Prepare Purchase Order

System automatically generates Use software within system to fill in

blanks E-procurement system generates

Place Purchase Order

Transmit via EDI Transmit via e-procurement

application

Follow-up on P.O.

System-generated exception reporting for past-due orders

System-generated exception reporting for discrepancies in receiving, quality, quantity, price, etc.

Receive / Inspect

Scan (RFID) bar-coded items received directly into system

Accept entire PO as received if no exceptions

Manually enter receiving, system compares to P.O.

Invoice Approval & Payment

Automatically generate check at appropriate time if no exceptions

Alert of discrepancies between PO and receiving

Electronic funds transfer Electronic bill presentment and

payment

Maintain Records

Purchasing online database

Technology and E-Commerce

Marketing 3860 – PurchasingJuly 14, 2004Kimball Bullington, Ph.D.Associate Professor of Operations ManagementMiddle Tennessee State University