UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC

2. E-SCM and E-procurement, E-reverse auctions

Any forms of business transaction carried outelectronically over public telephone systems.

IBM defines e-business as e-commerce above!The two terms are used synonymously.

Concerned with streamlining and optimizing the wholesupply chain through internal applications with the aim of

ensuring maximum sales growth at the lowest possible cost.

Is using the Internet to operate the transactionalaspects of requisitioning, authorising orders, receiving and

payment process for the required services or products.

Purchasing ProceduresE-commerce, E-business, E-SCM and E-procurement

DefinitionE-commerce

E-business

E-SCM

E-procurement

Purchasing ProceduresE-business/E-commerce tools: E-catalogues

Facilitates real-time effective communication between buyers and sellers

Enables closer relationships

Enables suppliers to respond quickly

Virtual elimination of time lag in purchasing process

Maverick purchasing is reduced

Advantages

Purchasing ProceduresAuctions

Web auctions may be:English bidDutch bidSealed bidReverse bid

Advantages• Better savings than through negotiation• Reduction in acquisition lead time• Access to more suppliers• Global supply place• Enhancement of market knowledge• More efficient RFQs and problems• Anonymity

Disadvantage• Based on win-lose• Adverse shift in relationships• Long-term adverse effects for the buyer & seller

Higher price offers

Start at high price – lower price offers

At tendering

Request: 100 items per 25 €: offers A 100 items/25 €, B 50 items/20 €, C 50 items/15 €.......final result of auction: A failed, B 50 items/20 €, C 50 items/15 € ....next versions

Application of e-procurement?

OK

OK

? ?

Typical reverse auction event

UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC

3. Customer relationship management – Supplier relationship management

Supplier Relationships

Definition of a Relationship

Relationship Marketing

Long-termStrategy

1

Not oneSale ata Time!

2

“A Connection or Association”

Relationship Purchasing

Long-termStrategy

1SecuresMutual

Benefits

2

RequiresFocus

3Not only long-term purchasing! Trust and

understandings

Core competencies

Partnershiprelationship

Arms length

AdversarialPreferred supplier

Single sourcing

Network sourcing

Strategic alliances

Internal contracts – mergers,

acquisitions

A step-ladder of external and internal contractual relationships

Supplier Relationships

Complementary goods and services/medium assets importance

From medium up to relative high strategic importance/ reduction of transaction costs etc.

Costs reduction-tiering level supply chain-mature industries

Joint-ventures?Power equivalence and high level of complimentarity

Delivery schedule

Senior management involvement

Supplier developmentprogrammes

Number of suppliers

Classification of Operational Characteristics

Type of contract

Length of contract

Product service type

Information exchange

Pricing scheme

Categories: a) vendor, b) preferred supplier, c) exclusive supplier, d) partner

Termination – Legal Considerations

Financial consequences – financial conditions are valid for limited time

Confidentiality agreements

Intellectual property rights

Capital assets – f. e. leasing of capital equipment

Security issues – security codes

Signed record of settlement

Employee rights

Supplier Relationships

•Changes in business directions•Product obsolescence•Supplier is unable meet service level•Short-term attitude•Economic factors (too risky)•Merges and acquisitions